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I propose that the artificers of the Permanent Artillery should be instructed in certain portions of the gunsmiths' work, and that one of these artificers should once a year make a round of inspection of the arms in the district to which he is attached, the cost of any repairs, which he may find necessary, to be made good by the corps having the damaged rifle on charge. In this way we shall have some guarantee that the arms are being cared for and are fit for service. I propose that all the Forces shall be armed with rifles. The Cavalry corps will in the future have to devote themselves to field-work (reconnoitring, outpost, &c.) to a very much greater extent than in the past, and when doing that work should carry rifles. When on purely parade duty they need not carry their rifles. The mounted infantry should most certainly be armed with rifles. The Permanent Forces, Naval Artillery, and field batteries should also be armed with rifles. During war time these latter corps will have work to do other than rifle-shooting, and their weapons will be to some extent a reserve. It will require 4,250 rifles to arm the force which I propose keeping up, and there should be a reserve of at least 1,750 rifles, this reserve to be created from time to time as funds may admit. 14. Small-abm Ammunition. With a small-arm-ammunitioii factory in the colony it will be necessary to keep up a reserve of at least one million rounds in stock, and located in proportion at the four centres, according to the number of men in each centre. Each year this reserve would be drawn on for current expenditure, and replaced by newly-manufactured ammunition. If there is no factory in the colony the reserve should be two and a half million rounds. Prior to my arrival in the colony, Snider ammunition had been bought either through the Home Government, from private firms at Home, or else from the Colonial Ammunition Company at Auckland. That bought through the Home authorities may be put down as satisfactory: it had passed the Government test. That bought from private firms was not to be depended on : sometimes it was good, sometimes bad. That bought from the Colonial Ammunition Company was at first found to be very unreliable, and gave general dissatisfaction. When the company was first called on to manufacture ammunition for the Government it was obliged to meet a very urgent demand produced by a scare. Representations were made that the brass, &c. in the colony was not sufficiently good in quality to meet the demand. At a pinch, inferior stuff was used, and the factory was induced to strain its productive-power, the result being bad ammunition, which has given a bad. name to any material produced by this company. The company acted very unwisely in its own interest in undertaking an order which it could not satisfactorily complete. Since then, arrangements were made by which the company was to make a certain number of rounds annually, the Government importing the powder, the company the other material. The ammunition was tested in a very unsatisfactory way, by simply firing from a man's shoulder. No machine for testing cartridges was in existence. The testing that was carried out was invariably done with rifles well cared for and in good condition, and the ammunition has been passed as satisfactory. When fired from numbers of rifles in possession of the Volunteers a very different tale has been told. These rifles, worn out in barrel and breech, have not given the same results as the good weapons used at the testing. Cartridges returned as unserviceable through misfiring have almost invariably been exploded at the first attempt in the good rifles. Breech-blocks have been blown open and the bases of the cartridges burst in these inefficient weapons when never an accident has occurred at Auckland in testing. At the same time Ido not consider that the factory has at all times turned out satisfactory work. The anvils have been left out in some cartridges. This should certainly have been detected before the ammunition was passed. When I went to Auckland I found matters in this state, and also that the Government had ceased to buy any ammunition from any source, falling back on the reserves to supply the wants of the current year. I went through the Colonial Ammunition Company's works at Auckland, and found their material and general supervision in manufacture to be satisfactory, and, with care, no reason should exist for the company not being able to supply thoroughly reliable ammunition. I told Captain Whitney, the manager, that if things were left to me I should insist on a more thorough testing of the ammunition, and that in the first place I should want a machine put up on the range for proving the cartridges. He at once agreed to this, and I wrote to the Hon. the Defence Minister calling his attention to the very grave danger which was being incurred by depleting the magazines of all reserve ammunition ; that I recommended a colonial company being given orders for supply in preference to the colony being dependent on Home articles very difficult to be obtained on emergency or during war time; and I recommended that general arrangements should be left in my hands, subject to his approval. I believe that an order has been placed with the company, and hope that some improvement has been made in the testing and proving of the ammunition. I regard it as inexpedient that the Government should import powder, the company importing brass and other material. It would be much more politic for the Government to order the ammunition to be supplied, and made with the powder which they desire, the company being rebated in duty for the amount of powder used in the manufacture of the Government ammunition. A considerable amount of friction and of labour in clerking, storage, and other ways would be saved. There is no provision for the supply of ammunition to men in the field, and the pouches worn by the men will only carry ten rounds of ammunition. This is thoroughly and altogether as inefficient an arrangement as could well be imagined, and I can hardly conceive how it could have existed so long. The proper supply carried by the man should be seventy rounds. Means should at once be given him for carrying at least fifty rounds. This will be referred to under " Accoutrements." It will be necessary to provide pack-saddles for the carrying and supply of ammunition in the field. This vital service has hitherto escaped all recognition.