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troops, which would fit them for the higher commands in this colony. At present, and under present conditions, officers to command districts could not be obtained, and where such vacancies in these appointments occur before the foregoing interchange has been established, I strongly recommend Imperial officers be applied for to fill them. No one realises more than do the Volunteers the necessity for officers who hold the higher commands being thoroughly competent. Opportunity has been given by the Imperial authorities for an officer from the colony to pass through a course of instruction at the Staff College, and the name of an officer it is proposed should go through this course has been submitted. The terms for earning capitation are not satisfactory. Proposals regarding this are embodied in my scheme for reorganization, and even if the present regulations regarding training are to be continued, an alteration is this respect should be made. Payment for daylight parades, too, should be granted where the numbers present admit of useful work being done. It is unfair on those present to withhold payment because, owing to other men stopping away, the number required by present regulations are not on parade. The Government grant to each district for rifle-shooting has been increased by £50, the extra £50 being earmarked for competitions restricted to Volunteers. A grant of £5 per annum has been approved for officers' and non-commissioned officers' clubs. As regards Instructors, the pay formerly granted to Instructors of the Permanent Force should be restored to them. This point has been dealt with among my recommendations for the reorganization of the Permanent Force. The system of obtaining Instructors for Mounted Rifles and Infantry from the Permanent Force is not satisfactory. These men cannot be expected to be conversant with the work of these branches of the service, and know little or nothing of Imperial military habits or customs, and are unable to answer questions which they are frequently asked by the Volunteers on such points. There are plenty of excellent ex-non-commissioned officers of the Imperial service residing in the colony and available for this work, and their services should be utilised as opportunity occurs. Judging-distance practice is now compulsory, but the carrying-out of this most important part of a Volunteer's training still leaves a good deal to be desired. I have frequently stated that in my opinion every English-speaking boy should be trained as a cadet. Cadets, too, should continue their service in adult corps until fit to take their place in the ranks should occasion demand. Where cadets have been well trained two, or, at the most, three years with an adult corps should suffice. I have before referred to the very unsatisfactory state as regards the relationship of the Under-Secretary for Defence's section to the Commandant's section of the Defence Department; a vast amount of extra correspondence and very considerable friction is the inevitable result. The officer dealing directly with units, as regards pay, &c, should be under the Commandant, as in the Imperial service, and all questions relating thereto should be dealt with by the Commandant under the direction where necessary of the Hon. Minister of Defence. The duties of a financial secretary should be kept apart. The extreme centralisation and its consequent evils, to which I have also frequently referred, still continues. If officers are to carry out their duties they must, from the Commandant downwards, be accorded the responsibility and authority pertaining to their appointments. In war this would have to be done whether rules and regulations permitted it or not, but the most pernicious results of the present system would be then only too apparent, and confusion and disaster would be the result. Given the machine and the means for fashioning it, the method of doing so should be left to those who will have to control it on service. The system of having what represents the ordnance department under the Under-Secretary for Defence is also wrong, and could not be continued in war-time. Pebmanent Force. The Permanent Force is, as I have before reported, composed of a highly educated, welltrained body of men. The efficiency of the Force is much impaired in that, comparatively, a large number of men take their discharge to serve with the Police Force, tramway service, &c, where their prospects are improved. In my proposals for the reorganization of the Permanent Force all such points were carefully considered. The discipline of the Force has improved, but so long as so many men are allowed to marry and no married quarters exist, discipline can never be entirely satisfactory. The Defence Act as regards the discipline of the Permanent Force requires amendment on some points. For instance, a non-commissioned officer drunk on duty must under the existing Act be discharged, no matter what his length of service or previous conduct may have been The system of clothing the Force is unsatisfactory, and no matter what trouble the men take they cannot turn out as smart as they might otherwise do. The R.N.Z.A. turn out as well as circumstances admit, but the R.N.Z.E. do not. Pending the decision as to whether mine defence is to be intrusted to the Royal Navy as is now done in the Imperial service, the application for an officer to superintend this branch has been withheld, and in its present condition the mine defence could not be relied on. It is to be hoped a definite conclusion on this important point may shortly be arrived at. Men from the R.N.Z.E. are now to replace the civilian captain and engineer on the "Lady Roberts," and similar action as regards the " Janie Seddon " is under consideration. A considerable saving is effected thereby, and the course is that carried out in the Imperial service. The regulations regarding age-retirement should be carried out; it is only a useless expense to the country retaining men who have passed the age where they are physically fit Such men should have preference as regards employment as messengers, &c, and, with the establishment of a provident fund such as I have suggested, their future would be secured. Lieutenants Duigan and Mickle have proceeded to England to undergo courses of instruction. Lieutenant Chesney, who went Home in 190_, is shortly returning to the colony.