In 1932 Carr was appointed Director of Naval Medical Services (DNMS) with the rank of surgeon-captain. The RAN at this time had been drastically cut back following the London Naval Treaty and the spending cuts during the Great Depression. Nevertheless, Carr was able to build up a system of naval medical training and facilities that proved to be effective when the RAN began to expand again in the late 1930s. During World War II Carr oversaw an extensive network of RAN medical facilities across the South-West Pacific theatre, and from 1943 was also in charge of the Royal Navy's medical services in the Pacific. His status was recognised by his appointment as an honorary aide de camp to the Governor of Victoria, and as an honorary surgeon to King George VI in 1944.