E (PD) (37) 7 (extract) LONDON, 26 May 1937
IMPERIAL DEFENCE: DEPENDENCE ON SEA POWER
SIR SAMUEL HOARE expressed his regret at having been unable to attend the two previous Meetings at which defence matters were discussed. He then proceeded to make the following statement.
'1. The Minister for Co-ordination  has dealt in his opening speech with the more general aspects of the problems of Imperial defence and the Chiefs of Staff have circulated a full and detailed appreciation of our position to the members of the Conference. 
2. I need not, therefore, return to the ground that they have covered. Rather is it my task, as First Lord of the Admiralty, to concentrate upon the naval questions at issue.
3. To obtain a clear perspective it is necessary to say once again that the British Commonwealth of Nations is a world-wide Empire which was founded by sea power and is, to this day, dependent on sea power for its existence.
4. I cannot put this aspect of Imperial defence more clearly than by quoting the words of Sir Archdale Parkhill, Minister of Defence in Australia, if he will forgive my quoting him in his presence.
The speech was made on the Australian Defence Estimates, 1936-37.
He said, "The backbone of the defence of the British Commonwealth is still essentially naval, and will remain so as long as oceans link the shores of its members. "
5. Just so long as we are in a position to control the sea communications of the world, so long is every member of the British Commonwealth of Nations assured of safety and security against invasion.
6. If we ceased to be in a position to control sea communications in any part of the world, then those parts of the British Empire where our control is successfully resisted become open to invasion, and our Imperial highways would be cut.
7. I state this basic fact at the beginning of my speech. I do so on purpose, for, during the past months, doubts have been expressed, and have been expressed publicly, as to our ability, in the face of our European commitments, to despatch a fleet to the Far East if Japan determined to force matters to a trial of strength with us.
8. Let me assume for one moment that these doubts are well- founded, and that Japan, determined on aggression, is free to exercise her sea power in the Far East unopposed by the British Fleet. Let me assume that, in these circumstances, Japan decides to invade Australia and launches an expedition covered by the full strength of her naval forces and her naval air forces.
9. I am convinced that, if this act of aggression took place, no measures of local defence, no Army and no Air Force which the Commonwealth of Australia could conceivably maintain could save her from invasion and defeat at the hands of the Japanese. The Dominion of New Zealand would be exposed to exactly the same danger, and every word I have said about Australia is equally applicable to New Zealand.
10. With Australia and New Zealand dominated by the Japanese and the Indian Ocean under the control of Japanese sea power, where would be the security of the Union of South Africa and of the India Empire? Or let me suppose that Japan casts her eyes eastward across the Pacific, what is to deter her from action against the Dominion of Canada? 11. Finally, what of the United Kingdom interests in the Far East, the British Colonial possessions, our immense trade in the Pacific and Indian Oceans? All these would lie at the mercy of the Japanese.
12. I have said enough to make it clear that we believe that the very existence of the British Commonwealth of Nations as now constituted rests on our ability to send our fleet to the Far East, should the need arise.
13. Moreover, by our action in building, developing and equipping the Naval Base at Singapore, we have advertised to the world generally and to Japan in particular our intention to maintain Imperial interests in the Pacific. This great project undertaken at a time when our financial resources were restricted by the years of the depression is now happily approaching the date of completion.
14. It may, therefore, be said that our intentions are obvious. I must now turn to the question of our ability to put our intentions into practice.
This involves the consideration of our naval strength and the ultimate factor in naval strength, it should be remembered, is the capital ship.
15. We can appreciate the situation as it exists at the present time, and, since a capital ship takes some three to four years to build in this and all other countries, we can forecast the situation up to a period some four years ahead.
16. At the present moment we are satisfied that our naval strength would allow us to despatch an adequate fleet to the Far East whilst retaining sufficient strength in Home Waters to cover our European commitments.
17. Looking ahead we appreciate that there will be a period, from the Spring of 1938 to the Summer of 1939, when we could only retain forces in Home Waters barely adequate to meet the naval forces of Germany and must rely on being assisted by the French Navy, We could still send to the Far East a Fleet, but it would be, from a purely material point of view, slightly inferior to the full Japanese naval strength. By the adoption of a defensive policy and, relying on the superior fighting qualities of the British race, this Fleet should achieve its object of assuring the Dominions from serious aggression.
18. But let us look further ahead and contemplate the time when the battleships now building in other European countries have been completed. A study of comparative numbers at once shows that after 1940, or thereabouts, from the standpoint of Capital ships alone, the despatch of a fleet to the Far East would be a most hazardous undertaking unless our battleship strength is increased above the number of 15 ships. The problem of maintaining the standard necessary in the years beyond 1940 is one therefore that will call for effort and expenditure of unprecedented magnitude.
19. These forecasts are based on our own new construction programmes and on the present known intentions of Germany. Thanks to the Anglo-German Naval Agreement of 1935, whereby Germany voluntarily restricted herself to a limit of 35 per cent. of British naval strength, we can face the future, as far as the German Navy is concerned, with equanimity. Japanese intentions are, on the other hand, still shrouded in oriental mystery.
NAVAL CONSTRUCTION PROGRAMMES
20. In our 1936 and 1937 programmes we have 5 capital ships, 4 aircraft carriers, 7 large cruisers and 7 fleet cruisers under construction. Our 1937 Naval Estimates reached the enormous figure of 105,000,000. This colossal burden has been imposed on us by the needs of the situation as it exists to-day.
21. For the future the one thing that can be prophesied with some assurance is that Japan will undertake the construction of new capital ships. This will demand further capital ship construction by the British Commonwealth of Nations. When all the other burdens on the taxpayer of the United Kingdom, involved in our rearmament programme, are taken into account it is impossible to foretell whether we, in the United Kingdom, will be able to face, almost single-handed, the immense financial strain that will be involved.
Let me put to you this question in a single sentence. Shall we in the United Kingdom in peace time be able to support on the top of our huge expenditure upon the social services and the other branches of defence a permanent charge of more than 100 millions a year for the new required Fleet? 22. I must emphasise again that a large proportion of this expenditure is required to meet our Imperial obligations in the Far East and that the safety and security of all the Dominions is dependent on our ability to meet these obligations. In these circumstances I feel sure that the Dominions will appreciate the dangers with which the whole of the British Commonwealth of Nations is now faced.
DOMINION CONTRIBUTION TO IMPERIAL NAVAL DEFENCE
23. I turn now to the question of the best form which Dominion contribution to Imperial Naval Defence can take. And here I would draw your attention to the Naval Appendix to the Chiefs of Staff Review. 
This paper has been prepared in the Admiralty for the information of the Delegates attending the Conference.
24. The Appendix starts by quoting the advice formerly given and agreed to in previous Imperial Conferences. This advice culminated in the recommendation that Dominion Naval building programmes should comprise the construction of cruisers and sloops, the latter now being known as "Escort Vessels."
25. With the lapse of the treaties of quantitative limitation the opportunity has been taken to review this advice in the light of the situation as it exists to-day and in Part II of the Appendix will be found the Admiralty's recommendations for Dominion naval construction to-day. It will be seen that the Admiralty now recommends to the Dominions that they should consider carefully whether they are in a position to build and maintain capital ships.
26. Before making such a recommendation the Admiralty have fully weighed its financial implications. It has been found that, taking every calculable factor into consideration, the total over-all cost of a capital ship only slightly exceeds the cost of 2 modem large cruisers. The value of one capital ship, as a contribution to Imperial Defence, greatly exceeds the value of two cruisers.
27. The construction of cruisers is also recommended. It can safely be said that we can never have too many cruisers. Finally, the review concludes with a recommendation that destroyers should be built. The latter recommendation is a departure from Admiralty advice during the Treaty period. The factors justifying this change of policy are fully discussed in the Appendix. Briefly, the Admiralty consider that whilst destroyers are primarily fleet units and, as such, should be employed whenever possible in flotillas working with a Main Fleet, yet their value, both in the training they afford and in their benefit to morale, outweighs other considerations and justifies their construction.
28. I hope I have made it abundantly clear that in my opinion it is upon our Imperial sea power in both hemispheres that the security of the British Commonwealth of Nations primarily depends.
I am fully aware that there is a school of thought in the world to-day which believes that the advent of air power has rendered Navies obsolete. The truth is, of course, that air power and sea power are complementary parts of a single defence problem. But so long as we are dependent on sea-borne trade and our sea communications, I am convinced that we are as dependent on sea power to-day as we have always been in the past.
36. In conclusion, allow me to summarise the situation as I see it to-day. The Royal Navy is undergoing a process of modernisation and expansion from which, when the programme is completed, it should emerge as well fitted to deal with possible enemies in any part of the world as ever before throughout its long history. This result, however, can only be achieved at immense cost, which, taken in conjunction with other essentials of our national re- armament, is placing on the taxpayer of the United Kingdom an almost intolerable burden.
37. A great proportion of the expenditure on Naval defence is required to meet our Imperial, as distinct from our United Kingdom, obligations. The question must occur to all of us whether this small island can continue to shoulder the financial strain involved in maintaining to so great an extent, the requisite standard of naval strength to ensure our Imperial security. It may well be that the safety of the British Commonwealth of Nations will depend on increased naval support from the Dominions.
38. I have no wish to propose, far less to dictate a programme or a policy to our sister States. They are as free as we are to make their choice, and to make it without lectures from us or anyone else. I am conscious of the increased efforts that they are making to play their part. I am grateful for them. I ask rather the representatives here present to consider carefully and dispassionately the facts that I have put before them, and to give us their advice and their help in securing the vital high roads without which our Commonwealth cannot maintain its corporate existence.'
VIEWS OF THE AUSTRALIAN DELEGATION
SIR ARCHDALE PARKHILL said he had intended to make some observations on the Review of the Chiefs of Staff, but in view of the very important statement by Sir Samuel Hoare and the fact that further discussions on defence questions were to be held later, he did not propose now to say very much. He was sure that all present were most grateful to Sir Thomas Inskip and the three Service Ministers for their statements.
The Australian Government had been very glad to see that the Chiefs of Staff in their Review referred to the vital importance in Imperial defence of the despatch of the Fleet to Singapore.
This question had been a matter of great controversy in Australia, where one school of thought opposed naval expenditure on the grounds that it was doubtful whether, in fact, the British Navy would move out to the Far East to assist the Dominions in the Pacific within a reasonable time. He quoted from paragraphs 79 to 81 of the Chiefs of Staff Review, where it is expressly stated that 'in a world war the security of the United Kingdom and the security of Singapore would be the keystone on which the survival of the British Commonwealth of Nations would depend'; and 'this situation demands the recognition of the principle that no anxieties or risks connected with our interests in the Mediterranean can be allowed to interfere with the despatch of a fleet to the Far East.'
The Chiefs of Staff had suggested that one of the ways in which Dominions might co-operate in Imperial defence was by contributing land and air forces as part of the garrison of Singapore. The Australian Delegation would like to have time to consider the very important statement made by Sir Samuel Hoare before making any reply to this suggestion. He remarked that in this connection there was still much to be done on the large-scale programme for the modernisation of the coast defences of Australia. The defences proposed for Darwin alone, in order to make it fit for an operational naval base, were estimated to cost over 5,000,000.
With regard to naval construction in Australia, his Government had received much varied advice in the past. He would prefer, however, to discuss this matter in detail at a later stage.
He would say no more for the present. Sir Samuel Hoare's statement had been most impressive and it was impossible to discuss it without deep consideration.