In December, 1886, the Chancellor of the Exchequer, Lord Randolph Churchill, suddenly resigned. He afterwards explained that his resignation was a protest against extravagance and waste in the administration of the Services. There were extravagance and waste; but, in my view, which I represented to Lord Randolph, it would take several years to reform the administration, and it was far more important to set right our defences, even if their administration cost more in the meantime. I recall these things because they serve to illustrate the trend of events. On the one side were the Government and their official advisers at the Admiralty, convinced that all was very well as it was. On the other side, were the rapid development of the fighting ship in all countries, which owing to Mr. W. H. White, was particularly marked in this country; the greatly increased public interest in naval affairs; and the constant representations of a number of naval officers, myself among them, to the effect that great reforms were urgently required. We believed that there existed at the Board of Admiralty no system of direct responsibility; that Parliament and the nation had no means either of ascertaining upon what principle the money was expended upon our defences or of affixing responsibility whether it were expended ill or well; that there existed no plan of campaign at the Admiralty; that the Navy and the Army had no arrangement for working together in the event of war; and that, in point of fact, the Navy was dangerously inadequate. And in attempting to achieve reform, we were confronted {353} by a solid breastwork, as though built of bales of wool, of official immovability. Had it been a hard obstacle, we might have smashed it. Towards the end of 1887, the Admiralty did a very foolish thing. They decided to cut down the salaries of the officers of the new Intelligence Department by £950. In my view, this proceeding both involved a breach of faith with the officers concerned, and would be highly injurious to the efficiency of the department for whose success I felt peculiarly responsible. My protests were, however, disregarded; the First Lord asserted his supreme authority; and the thing was done. The efficiency of the whole Service was, in my view, bound up with the efficiency of the Intelligence Department; because that department was created for the express purpose of estimating and reporting what was required to enable the Navy to fulfil its duties. It was in view of the main question of the necessity of strengthening the Fleet, that I decided to resign my position upon the Board of Admiralty, and to declare publicly my reasons for so doing. On the 9th January, 1888, I sent my resignation to Lord Salisbury; who, courteously expressing his regret, accepted it on 18th January.