In 1864, the number of flags, ensigns and pendants used in the Navy was reduced considerably by the abolition of Squadronal Colours. In their Memorial to the Queen, the Admiralty stated:
"Under the Regulations established by Your Majesty's Order In Council of the 25th Day of July 1861, for the governance of the Royal Naval Service, the Flag Officers of the Fleet, whether Admirals, Vice Admirals, or Rear Admirals, are classed in Squadrons of the Red, White, and Blue, and are (with the exception of the Admiral of the Fleet) authorized to fly their flags of the colour of the Squadron to which they belong, this regulation necessitating the adoption of ensigns and pendants of a corresponding colour in every ship and vessel employed under their orders, each vessel is therefore supplied with three sets of colours, and the frequent alterations that have to be made when the Fleet is distributed as at present, under the orders of many Flag Officers, is attended with much inconvenience from the uncertainty and expense which the system entails."
"The increased number and size of merchant steam ships render it a matter of importance to distinguish on all occasions men of war from private ships by a distinctive flag; the latter vessels bearing at present the same red ensign as your Majesty's ships when employed under an Admiral of the Red Squadron. It also appears to us to be desirable to grant (under such conditions as we may from time to time impose) the use of a distinguishing flag to such ships of the merchant service as may be employed in the public service, or whose commanding officer (with a given portion of the crew) may belong to the Royal Naval Reserve. We therefore most humbly submit that Your Majesty may be pleased by your Order In Council to prescribe the discontinuance of the division of Flag Officers into the Red, White, and Blue Squadrons and to order and direct that the White Ensign, with its broad and narrow pendants, be henceforward established and recognised as the colours of the Royal Naval Service, reserving the use of the Red and Blue colours for such special occasions as may appear to use or to officers in command of Fleets and Squadrons to require their adoption: the White Flag with a Red St.George's Cross to be borne by Admirals, Vice Admirals, and Rear Admirals, on their respective masts; Commodores of the First Class to carry a White broad pendant at the foretop gallant mast head, Commodores of the second class a similar broad pendant at the foretop gallant mast head. The Blue Ensign and Union Jack, with a White border, to be carried by all vessels employed in the service of any public office; by vessels employed under the Transport Department, and the Civil Departments of the Navy (with the Seal and Badge of the Office to which they belong as at present) and, under our permission, by ships commanded by Officers of the Royal Naval Reserve Force, and fulfilling in other respects the conditions required to entitle them to the privilege. The Red Ensign and Union Jack, with a White border, continuing as at present the national colours for all British Ships, with such conditions in favour of Yachts and other vessels as we may from time to time authorise to bear distinguishing flags."
By Order in Council, July 9th 1864, effective 18 Oct 1864.