- Nicholls, Bob
- Ship design and development, History - Between the wars
- RAN Ships
- None noted.
- June 2011 edition of the Naval Historical Review (all rights reserved)
The worldwide Global Financial Crisis which originated in the United States in 2007 and the Australian reaction to it is still fresh in most peoples’ minds. The description of the Great Depression of the late 1920s and early 1930s and its impact on the materiel and personnel fortunes of Royal Australian Navy (RAN) which follows may then serve to indicate the extent to which our society has changed in the last 80 years. Before doing so though a brief description of the status of the Squadron (the term ‘Fleet’ had been dropped earlier because of the strength of the Navy) may serve to illustrate the size of the problem which was to emerge.
By early 1929 the seagoing forces were two modern ‘County’ class cruisers in (reduced) peace-time commission, a seaplane carrier and two destroyers, in partial commission and used as tenders for training duties for the Schools at Flinders Naval Base. Two recently-acquired modern submarines were in limbo with skeleton crews. There was a reserve fleet of two coal-fired obsolete light cruisers, a number of equally obsolete destroyers and a gaggle of worn out sloops in varying states of preparedness for service (none of them very high). Personnel strength hovered around 4000 officers and ratings, which, even with each of the cruisers’ crews of around 700 and the seaplane carrier with a complement of 400, does seem to be somewhat excessive. The current naval Estimates were in the region of £2,000,000.
The ratings (the androgynous term ‘sailor’ was a product of the late 20th century) were, for the most part men (only) who had signed on for twelve years service.
All the work that had taken place over the previous ten years in forming the RAN into a small, comparatively modern and reasonably efficient force came to an abrupt halt by the onset of the Great Depression.
The Naval Board seems to have been taken by surprise by the emerging situation. An examination of the archives of the era had until then certainly exuded an air of confidence for the future. There are two explanations for this; either the Board’s ignorance of the economic facts of life or the judgement that somehow the Navy would be immune to any financial problems. Either way they were soon to be disabused.
Trimming the Sails
The Australian government was so concerned with the country’s financial situation that in mid-1929 they ordered a £500,000 reduction in the Defence budget. Of this the Navy was instructed to prune £320,000. This led to measures which included a reduction of 600 men, i.e. 15 per cent.
The country went to the polls in October 1929. The Labor Party won office, with the Prime Minister, Stanley Bruce, losing office and his seat into the bargain, an achievement incidentally not to be repeated for another 78 years. The week after, Wall Street crashed, deepening the crisis
Over the following weeks the Board revised their proposals to put to the Government.
Their first reaction was a suggestion that the Royal Navy (RN) take over the two submarines that had only just completed an overhaul and their triennial refit.
When this report arrived in London the Admiralty initially didn’t care at all for the suggestion that Australia off-loaded the submarines they’d only just bought. As the Secretary, Sir Oswyn Murray minuted:
‘On the question [of returning the submarines] I would point out that the action taken by Australia appears to have been taken to meet the pressure of a serious, but it is to be hoped, a temporary financial situation. It is unlikely therefore that she will be attracted by any arrangement under which she will take on any other naval expenditure in lieu.
On the other hand we are in no position this year to take on such an extra burden as the maintenance of two additional submarines, nor, I suggest, would it be good policy to give the Dominions the impression that they can, when it suits them, throw back on to this country the naval responsibilities which they have deliberately undertaken.’
Fortunately this rather unhelpful line from the Admiralty’s senior civil servant was not reflected in the First Sea Lords’ view, particularly when it was pointed out to him that it had been on Admiralty advice that Australia had acquired the boats in the first place. In the end it was decided that if the Australian Prime Minister offered to transfer them to the RN as a gift, they would accept.
The Deteriorating Financial Position
Meanwhile the country’s economic situation had deteriorated to such an extent as to make further drastic cuts in expenditure imperative. The Navy would have to take an additional 15½ per cent cut in their budget. Between April and June 1930 the Naval Board decided on measures which included a freeze on imported stores and no replenishment for those consumed without Ministerial permission. Civilian staffs at Navy Office and shore establishments were to be reduced, a clear indication that times were tough.
These steps were minor when compared to further cuts in uniformed personnel with the naval staff calculating that the difference in the numbers actually borne on 1 April 1930 (4,150), and the numbers required for the Squadron and its support was about 900, of which 50 were officers and 850 were ratings, in all around 25 per cent. All would have to go.
Officers Of the officers, half, i.e. 25, would come from the Military/Executive Branch and the balance from the Engineer, Doctor, Dentist and Accountant Branches. On the assumption that there would be insufficient numbers of volunteers, (which, given the economic conditions prevailing outside the Navy was a reasonable one) the scheme suggested that all officers should be categorised by the Navy’s senior officers into four categories:
A Officers of undoubted ability who would unquestionably be recommended for promotion.
B1 Average officers, who are unlikely to obtain promotion but whose retention was desirable.
B2 Average officers, who would be of no particular loss to the Service if reduced (sic).
C Officers below standard either in conduct, efficiency, or physically.
Finally, the RAN College at Jervis Bay was forced to discharge 25 percent of their Cadet Midshipmen and, in May 1930 move to FND. There was to be no entry at all in 1931.
Ratings An announcement that applications for free discharge would be accepted had already been made and Commanding Officers had also been directed to submit lists of men who were below standard. It was anticipated, not surprisingly over optimistically, that up to 500 of the 850 required to be made redundant would take advantage of the free discharge offer, coupled with the retrenchment and with the balance accounted for by natural attrition, which was calculated at about 30 men each month. When the cessation of recruiting was taken into account, the goal would therefore be reached until about June 1931.
The freeze in recruiting, which was to last for a little over two years, would result in a shortage of middle to senior experienced ratings five or six years later, in the late 1930s when they would be needed. In the meantime several hundred would have to be sacked.
Nothing official has survived of the Navy’s methods to reduce the numbers of ratings to be made redundant but the following anecdotal account has a ring of authenticity.
The task of selecting those men to be made redundant fell, as was usually the case when something unpleasant was involved, on individual Divisional Officers. For example, if a particular Division had to be cut by three men in ten, the Divisional Officer would assemble his men, outline the problem and ask for more volunteers to take their free discharge. If enough men then raised their hands the problem was solved. Other Divisional Officers would get their men to write their names on slips of paper and place them in a hat, (making sure that the right name was on the slip,) then draw the names of those to be made redundant from the hat. Another method was to select men on the ‘last in, first out’ principle. Finally, the Divisional Officer might examine his men’s Service Certificates, their employment, character and work skills record, and himself choose those he considered the Service could do without. The methods described were not universally adopted throughout Divisions in the same ship and, although appearing haphazard were probably the best that could be used in fairness and less disruptive to the Service as a whole.
So far as the as the then unheard of subject of any resettlement was concerned, it appears that the Naval Staff was far more concerned about arranging the conditions for officers than for the men. With the exception of their minute deferred pay, it does not appear that ratings were provided for and this does not appear to have aroused concern in the higher ranks. On the other hand strenuous efforts were made to secure employment, in the public service, for officers. Those officers were additionally placed on half pay for the period before they were employed. This is a rare documented example of bias levelled for officers as opposed to ratings and did not, it is safe to assume, go unnoticed by the lower deck. Neither, it is suspected, did the comparatively small numbers of naval public servants made redundant.
(Any introduction of redundancy pay, or pension, would have to wait until the 1950s. Deferred pay was a (very) modest amount taken from an officer’s or rating’s pay and paid to him on completion of his service. For an AB his deferred pay it would amount to about £25 for every year served.)
Finally, the Navy’s pay.
The RAN’s Wages
The Government eventually introduced the Financial Emergency Act, to reduce the total Government deficit from £40 million to £10 million in 1931-1932. One of the provisions was the reduction of salaries for all its employees, including the RAN. The reduction here was between 22½ percent and 25 per cent. Officers’ pay was reduced by about this amount but it was the ratings, with much less pay to start with, who bore the brunt of the cuts.
An unmarried Able Seaman’s pay before the cuts was £2/5/0 a week or £127/8/0 per annum – a rate, incidentally, which had not changed for over a decade. Under the new legislation this was reduced to £1/19/8 per week or £103/12/8 per annum. This was before allowances were taken into account. These were 8p a day Kit (Uniform) Upkeep Allowance, 1/4p per day Ration Allowance and 1/5p a day Deferred Pay, all of which were also cut. The RAN’s publicised rate of pay for its ratings included these allowances, making an official total of £3/3/7 per week. This did not compare too well with civilian occupations; the Basic Wage in the same period was £3/17/0 or £200/4/0 per annum. An assistant plumber earned £3/17/6, a shop assistant £4/10/0, a truck driver £6/10/0 while professionals such as a telegraphist could earn £5/12/6.
At this stage the reader may be forgiven for assessing that the future of the RAN was all doom and gloom. So it may well have appeared at the time. However, the only people who may have been very adversely affected were those who had been retrenched as opposed to having taken voluntary retirement.
As always happens, the Great Depression passed, although it would take some time for the RAN to recover.
When it did, it is now clear that the RAN emerged in a much healthier state that it had been previously. The useless ships – the River class destroyers, their replacement flotilla of destroyers and sloops presented by the British in the immediate post-War period had been all consigned to the marine equivalent to the knackers’ yard. The encumbrance of the two ‘O’ class submarines had been lifted by their return to the British. (The RAN was not to dabble with these craft again for another ¼ century)
In return the RAN was eventually to receive a few replacement destroyers of later WWI vintage on loan and the recommendation that it undertook to replace the balance of their WWI light cruisers, which were by now quite obsolete and worn out. This was to be accomplished by the purchase of three British light cruisers during the 1930s. Finally, in 1935 Australia made a start on building a number of sloops locally.
These moves were to ensure that when war erupted less than a decade later Australia’s navy was in a far higher level of preparedness than would have been the case had the Great Depression not occurred.
This article is an edited extract from Bob Nicholls’ latest book ‘War to War – Australia’s Navy 1919-1939’ due to be published later in the year by Australian Military History Publications.