162 REPORT—1868. 
Here, again, though these divisions were imperative for his purpose, it does not 
by any means follow that they were the best for an ordinary account. 
He had already completed with Mr. Seely a special system of accounts for the 
7 Home and 15 Foreign Dockyards and their 150 different manufactories; and 
with the view of getting it introduced, Mr. Seely early in 1867 obtained a Com- 
mittee of the House of Commons to inquire into Admiralty monies and accounts, - 
and finding on inquiry from the Accountant General that an Official Committee 
(which had been appointed directly Mr. Seely gave notice that he should move for 
a Committee of the House) had no forms or schemes to propose, and could come to 
no agreement or conclusion amongst themselves, Mr. Fellows gave and explained the 
new scheme of accounts to Mr. Beeby (the Accountant General), Mr. Walker, and 
Mr, Brady, of the Admiralty, before Easter. Mr. Seely’s Committee finally recom- 
mended the adoption of this scheme in its entirety, with certain minor modifi- 
cations that had been jointly agreed upon between the Admiralty officials and 
Mr. Fellows at their interviews before Easter [see Report, Admiralty Monies and 
Accounts, 27th July 1868, No. 469, p. iv, par. 10; p. v, par. 13; pp. xv, xvi, pp- 805 
to 822; p. 362. Q. 5761; and on p. 370. & 5899; and Appendix, pp. 598 to 603]. 
This scheme is now being introduced into the Admiralty. it reverses the previous 
system of Admiralty accounts. The practice had been to treat the whole 22 Dock- 
yards, with their 150 manufactories, as one great establishment, so that articles 
made for ship-building or timber or materials converted, say, at Devonport, costin 
on an ayerage 20 per cent. below the average of the other yards, were yet Rie 
to Devonport’s ships at the average cost of all yards; and articles &c. costing, say, 
at Portsmouth, 20 per cent. more, were similarly charged; so that, though there 
might be a difierence of 40 per cent. between the cost of articles &e. at Devonport 
and Portsmouth, yet these articles &c. were charged at the same prices to ae 
built at both places. 
Respecting the 150 manufactories and the saw-mills and saw-pits in which are 
made or converted the articles or materials used in the construction or repair of 
ships at each yard, he found that the so-called cost of timber converted or articles made 
excluded many items forming part of their real cost; as, for instance, the timber as 
charged to ships did not include the cost of freight, measuring, receiving into and 
issuing from store, the expenses or labour in taking it to or from the saw-mills or 
saw-pits, or to the ships where used (these items in 1865-66 being about £200,000) ; 
nor the wages of converters of timber, measurers, foremen, and clerks connected 
with the timber conversions, though he found that in one yard he examined the 
omitted salaries amounted to a larger annual sum than all the wages paid for the 
sawing and conversion of the timber itself, this latter being the only item for labour 
of any kind charged to the timber when converted; in fact it only included part 
of the cost of labour, and really only part of the cost of material, since freight &c. 
really adds to such cost. The same remarks will also apply to all the manufactories 
and factories; the only items reckoned and included in the cost of their articles 
being part, and part only, of the cost of labour and material, all charges for fore- 
mens’ wages and supervision and indirect expenditure being omitted altogether 
from such cost. 
The new Scheme reversed all this, and was based on the principle that each 
manufactory should he treated as if it were the only manufactory carried on by the 
Admiralty ; that all items of expenditure connected with it, direct or indirect, should 
be charged to its products, and the thus properly enhanced price should be the 
price at which the articles should be issued and charged to ships; that all indirect 
charges in each dockyard that could not be appropriated and charged to the pro- 
ducts of any manufactory in any yard should finally be distributed on the ships 
built and repaired in the yard where such expenses were incurred. Lastly, it esta- 
blished a connexion between the Navy Estimates [ which give the money to be voted | 
with all the succeeding accounts, by which the money as voted by the House could 
be readily traced and checked in all of them. Thisintroduced anew principle into 
both what may be called the parliamentary accounts and the departmental accounts 
or detailed accounts of expenditure, such as cost of ships, articles made at the manu- 
factories, &e. By it a unity was created which did not exist before between the 
parliamentary and the departmental accounts. This Mr, Fellows considered one of 
