THE essentials of administration are organization, co-ordination and efficient methods. At the end of the previous administration a beginning was made in consolidating the shops at the navy yards. Under the old system, in existence for many years, each bureau had its own shops and its own workmen. Work is now done for any bureau in general shops. In order that the head of the Navy might be informed and have responsible expert advice, and coordinate the efforts of the bureaus, an organization was put in force December 5th, 1909, with the knowledge and approval of tle President, by which four aids were appointed and the bureaus were grouped in divisions of Operations, Material, Personnel, and Inspections. The Aid for Operations has charge of movements of ships, grouping into fleets and squadrons, and preparation of war pians and strategic studies. The Aid for Material studies the requirements for repairs and alterations and advices the Secretary as to whether the work in the various bureaus is being co-ordinated and expedited. The Aid for Personnel keeps posted as to the officers and men, and is always in touch with conditions at Annapolis and the training stations. The Division of Inspections, reporting direct to the Secretary, co-operates with the Division of :aterial in fnding out the condition of the ships and the necessity for repairs, and advises also as to whether repairs and aLterations requested will be worth the expeuditure of money in final military value. A part of this work was formerly done by the Board on Construction, composed of the individual bureau chiefs. Under this board also came the final determination of the qualities of new ships. In the present organization, the designs and general military characteristics of ships are determined in a more rational and up-to-date manner. The general military features required are recommended by the General Board and are referred to the Bureau of Construction and Repair. In case the general requirements asked for cannot be met, they are modified or changed to suit what may be accomplished on a given displacement. Arter the sketch plans are ready, sea-going officers from the fleet and other sources go over these designs, criticise and suggest improvements The modified requirements go back to the Bureau of Construction and Repair for change in the outline plans, which are again submitted to scrutiny. The whole matter has thus been thoroughly gone over and the objections, criticisms and suggestions of the sea-going officers, and the opinions and knowledge of the technical officers have been assimilated. The final designs represent both the best technical knowledge and the sea-going experience of our expert officers. The best naval advice is now placed in the hands of the designer without his efforts being required to reconcile many conflicting opinions, and at the same time the officer who will have to fight the ship finds that his advice is not ignored. This method has proved an inspiration to the naval architect, and the present designs of blttieships are far in advance of all former attempts. The Department has been for some time studying the new systems of modern management in commercial establishments, both in this country and in England, with a view to introducing such parts or features of it as might be applicable to our navy yards. Civilian experts who visited the vessels of the fleet found that the highest type of scientific management now exists in our battleships, and they have expressed to me the greatest admiration for the progress so far made and the excellent results accomplished. They found the Office of the Director of Target Practice a fine example of a planning office. Some form of central planning will probably be added to the present organization, shop methods will be improved, and better determination of the use of machine tools and the efforts of the individual work- man will be sought. The Department hopes to secure the best features of successful management and adapt them to navy yard requirements, thus cutting out wastes in time and by better methods securing increased production, with mutual benefit to the government and the workmen. If the energy of the workmen is wasted or is not efficiently applied, the elimination of the conditions producing Duch waste of good energy would be beneficial alike to the government and its employees; for both should share in the benefts of increased production. The Division of Operations has drawn up a new organization for the fleet, to consist of 21 battleships, assigning one to the Commander-in-Chief, leaving fve ships in each of the four divisions of the battle fleet. But one ship of each division -will be at a navy yard for general repair, the other ships coming to the yards only for docking or minor emergency repairs twice each year. The efforts to make the ships as self-sustaining as possible have been encouraged, with the result that the work at the navy yards has been reduced. The carrying out of these two business-like features in handling the fleet will show more clearly the wisdom of recommendations made last faU that we give up a number of our smaller and unrequired navy yards. One of the chief causes of great expenditures in the Navy is the excessive number of navy yards. We have on the Atlantic Coast nine navy yards, where in several instances, money has been expended lavishly, which would not have been the case if the strategic and economic pOint of view only had been considered. Last year, as a beginning, it was recommended to Congress that several stations be abolished, which w{uld have brought about a saving, irrespective of the price which the government might have obtained for these properties, of an annual maintenance expense of $1,600,000. Criticism has been made for my not having recommended the abolishment of a:y of the Eastern yards; but the reason was that, for the present, the dry docks in the Eastern yards are a necessity to the fleet. The Eastern yards are located at Portsmouth, Boston, New York, Philadelphia and Norfolk, and it might be weH to include Charleston. It has been sometimes stated that not more than three or four of these navy yards will be actually necessary, preserving, however, the use of all the large docks for government purposes. The question as to which of these yards should be maintained and which abolished is so important that it should be thoroughly considered by an unbiased board of experts, having in mind not local interests but only those of the fleet; as the yards exist for the feet and not the fleet for the yards. As navy yards have no defensive facilities, the army must be consulted as to their protection and defense; consequently, the consideration as to which of these six yards are necessary to the navy from an economic and Itrategic point of view has been left to a joint Army and Navy Board to determine. On their report will be based my recommendations to the President as to the necessity of these yards, and as to which should be developed and continued. When the Panama Canal opens, and the fleet spends probably an equal amount of time in each ocean, the work for the Atlantic yards will be much reduced and it will be even more evident that fewer will be needed. By a proper reduction in navy yards, there would be a vast saving of money in maintenance, probably three to four millions a year, and a realization of funds from the sale of real estate. If this is not done Congress, must assume Ithe responsibility. The great importance of the Caribbean Sea as a base of future naval operations, consequent on the completion of the Panama Canal, is now weI! realized. It is the plan of the department to have a naval base in the accessible and suitable harbor of Guantanamo, Cuba, on the direct route to Panama, which is some 700 miles from the Canal, and capable of harboring a feet of 50 or more men-of-war. With a fortified entrance to the canal, a reasonably strong base at Guant:mamo, and a torpedo base at Key West, our fleet will be able to utilize its full strength for attack or defense in the Caribbean, and the Gulf of Mexico will be as safe as an inland lake. It is important, during battle maneuvers in peace, or a period of real hostilities, that a vessel should not be called upon to return thousands of miles in order to effect urgent repairs. These can be more easily and economically done by the development of Guantanamo as a limited docking and repajr station. It is the intention to develop Pearl Harbor, San Francisco Bay, and Puget Sound in order that the entire fleet may be maintained at times on the Pacific Coast. The Department has been working for some time with the President's Commission on Economy and Efficiency toward introducing better business methods in correspondence, purchases and other details within the Department itself. The introduction of more economical methods in the departments and at navy yards will he facilitated by the new system of accounting which has been established within the last year in the Department and at the navy yards. It is now possible to get accurate trial balances, follow the cost of work, and determine with a larger degree of accuracy just what the navy's money is being spent for. It is proposed, also, to reduce to the Emallest limits the number of articles manufactured in navy yards, and to buy in open competition, whenever possible, all articles which can be properly and more cheaply made by commercial establishments. Naval specifications have recently been simplified and conform more to commercial usage, thus resulting in increased [ompetition and lower prices to the Navy. The occasional building of a battleship or vessel of a special class in a government yard, in order to demonstrate cost, is valuable and instructive, but should be avoided when a large saving ($1,500,000 on a single battleship) can be made. On account of the restriction made by Congress in the Naval Act of June 24th, 1910, by which it was provided that one of the battleships therein authorized must be constructed in a goveIment yard, this saving 'can not be effected. The question of docks for our larger vessels has been, until lately, a serious one. It looked for some time as if our latest ships, such as the “Arkansas” and “Wyoming,” would be finished before any dock would be available to clean their bottoms and have them ready for their trial trips. To provide against this, vigorous adion was necessary and was taken. Dry Dock No. 4, at the Brooklyn Navy Yard, will now be completed in January, 1912, and Dry Dock No. 3, at Norfolk, lengthened to 700 feet, was finished in September, 1911. The Pearl Harbor dock and the .large dock at Puget Sound, which will accommodate ships of the “Wyoming” dass, are being pushed, and the latter is expected to be ready in March, 1912. (Continued on page 517.)