2nd. After giving credit for the value of plant and stores received from the Company, a sum of 65,534L. 4s. has been paid to the Elswick Ordnance Company as compensation for terminating the contract.

3rd. The outstanding liabilities of the War Office to the Elswick Ordnance Company, for articles ordered, amounted on the 7th May last to the sum of 37,143L. 2s. l0d. The whole of these payments and liabilities amounts to the sum of 1,067,794L. 16s. 5d.

4th. The sum of 1,471,753L. 1s. 3d. has been expended in the three manufacturing departments at Woolwich on the Armstrong guns, ammunition, and carriages, making altogether a grand total of 2,539,547L. l7s. 8d.

On May 4th, 1862, Sir William Armstrong was examined by the Select Committee on Ordnance, on which occasion the Right Hon. William Monsell occupied the chair; in reply to his question, No. 3163, Sir William Armstrong gave a somewhat lengthy description of his system of making guns of coiled iron tubes, etc. He also gave his reasons for not using steel instead of iron, which he admitted was too soft for that purpose.

The reason which Sir William Armstrong gave to the Ordnance Committee for not using the superior metal quite astounded me when I saw the printed report of his evidence before that Committee. I read it over and over again, each time with increasing astonishment; a feeling which will, I doubt not, be shared by every person who has read the preceding pages.

The three quotations herewith reproduced are part of Sir William Armstrong's evidence, as printed in the Report of the Select Committee of the House of Commons, 1863.

From the very first I saw, and I still feel, that steel is the proper metal for the barrel of a gun, if it can be obtained, and my only reason for not persevering in the use of steel was the difficulty of getting it of suitable quality. There can be no question that wrought iron is too soft, and that brass is still more objectionable than wrought iron, and if we can only obtain, with certainty and uniformity, steel of the proper quality, there can be no question as to the expediency of using it.

5004. Then, in speaking in the answer to which I have referred you, of "the gun with the barrel of steel," you did not intend, to rely on that as the difference between the two guns? -- I merely stated it as the fact. We could not get steel suitable for the barrels; the steel was not to be had; I would have used it without hesitation if I could have got it. I am quite sure that no patent Captain Blakeley held would have been adequate to prevent my using steel.

5007. Then am I right in inferring, that your system of construction "as it was then and is now," involved an internal lining of steel, with twisted cylinders of wrought-iron tightly contracted? When the steel is to be obtained. I do not think I can possibly be more explicit than I have been already; I have stated that if the steel can be obtained, it is unquestionably the best material, and it is the proper mode of construction; but if steel cannot be obtained, the alternative is to use coils for the barrels.

It was only natural that I should be astonished at such a declaration, for I could not forget the numerous proofs of the fitness of Bessemer mild steel, which I had given to Sir William Armstrong's immediate predecessor, Colonel Wilmot, at Woolwich; nor could I forget the display I had made of crushed gun- tubes, the malleable iron gun produced, in one piece without weld or joint, and other examples of steel, on the occasion of the reading of my Paper on the manufacture of iron and steel, at the Institution of Civil Engineers; to say nothing of the indisputable proofs of the suitability of Bessemer mild steel for the manufacture of ordnance, brought before the Institution of Mechanical Engineers at their meeting at Sheffield, on July 31st, 1861.

With regard to the reasons assigned by Sir William Armstrong, in his evidence before the Ordnance Select Committee, for persisting in the use of welded-iron gun-tubes, I must remain absolutely silent; such admissions and declarations as he there made do not admit of discussion, and hence I dismiss for ever