Enclosure

Statement and Enclosure

n.d. [3 June 1938

CAPITAL SHIP FOR AUSTRALIA

A modern Battleship costs about 8 3/4 million, and could probably
be completed late in 1943. By this time the AUSTRALIA and CANBERRA
would be 15 years old and as a rough estimate it would probably be
possible to allow the Australian Government about 1 1/2 million
pounds in part exchange for these two ships. The net cost of
Australia's Battleship would therefore be about 7 1/4 million
pounds.

In paragraph 30 of the Chiefs of Staff Memorandum-Australian co-
operation in Imperial Defence'-it was stated that the cost of a
Capital Ship was estimated at 8 million pounds. The increase of
about 3/4 million is due to the recent necessity of increasing
the size from 35,000 to 40,000 tons.

The attached table shows in considerable detail how the relative
costs of various types of ships given in paragraph 28 of the
Memorandum are arrived at.

The actual figures are, of course, subject to certain
fluctuations, but the relative costs remain fairly constant.

In paragraph 31 of Chiefs of Staff Memorandum it was stated that a
new ship might become available in 1941. This date was given
because it was thought that it might be possible to let Australia
have one of our later KING GEORGE V Class ships, instead of having
to wait for a new ship to be built or for one of our 1938
programme ships.

A recent review of our Capital Ship position vis-a-vis Germany and
Japan shows however that we are unlikely to be able to afford to
let Australia have one of our KING GEORGE V Class ships, which are
specifically required to counter German ships in home waters.

We should be prepared therefore to provide Australia with either a
new ship or one of our 1938 programme ships in 1943.

ESTIMATED DIRECT COST OF PRINCIPAL CLASSES OF SHIP EXPRESSED AS A
YEARLY AMOUNT

Maintenance Annual Large
Ship Costs Aircraft Replacement Repairs Total
(a) (b) (c) (d)

Capital Ship 310,000 34,500 307,500 54,800
706,800
(NELSON Class) (100%)
Cruiser, Large 187,000 23,000 93,600 20,000
323,600
(45.7%)
Cruiser, Small 130,000 23,000 57,500 14,900
225,400
(31.8%)
Aircraft Carrier 255,000 414,000 202,500 22,500
894,000
(36 A/C) (126.5%)
Aircraft Carrier 160,000 172,500 162,500 19,500
514,500
(15 A/C) (72.7%)
Destroyer Flotilla 332,000 - 181,800 14,500
528,300
(J. Class-8 Vessels) (75%)
Submarine (1000 tons) 39,800 - 25,700 (e) 65,500
(9.25%)

NOTES
(a) Maintenance covers the pay, victualling and miscellaneous
expenses of the personnel, naval stores, fuel and armament stores
consumed, and the cost of annual docking and repair.

(b) The figure for aircraft covers cost of replacing equipment
(assumed life-5 years) plus annual cost of maintenance of
personnel and material chargeable to Vote 4. It has been assumed
that Capital Ships would carry 3 aircraft and Cruisers 2 aircraft.

(c) This figure represents the capital cost of building the ship
divided by its 'life'. The lives assumed are:-

Capital Ships 26 years
Carriers 20 years
Cruisers 23 1/2 years
Destroyers 22 years
Submarines 14 years
(d) Large repairs take place about the ninth year of the ship's
life. In the case of a Capital Ship, a second large repair takes
place about the eighteenth year. The figure taken for this column
represents the aggregate cost of large repair(s) divided by the
vessel's life as scheduled under (c). The actual cost of large
repair is, for the most part, conjectural as little or no
experience has been gained of these vessels.

(e) Submarines are not subjected to 'Large Repairs'. The average
annual cost of all repairs and of periodic renewal of batteries is
reflected in column (a).

GENERAL
The 'Maintenance Costs' make no allowance for the non-effective
liability of the personnel borne, which does not mature until
years later. But if, as should be the case, it may be assumed that
the reduction of any particular vessel enables a consequent
reduction to be made in Vote A, there would be an eventual saving
to the non-effective votes.

[AA : A1608, N51/1/6]

1 Not printed.