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who entered by competitive examination were required to pass a further examination before their salaries could be increased beyond £200. Many of the temporary officers became permanent when they were drawing salaries higher than that amount, and the curious result was that officers who had shown special qualifications were often barred while others were allowed to proceed to higher positions. This appears to have been the main source of discontent in the Service during recent years, and has resulted in many anomalies. To meet the case of a number of officers who were suffering stoppage through no fault of their own, it was provided in the recently issued regulations that the bar should be raised from £200 to £260, while provision was made for other examinations, such as the Accountants' Examination, being regarded as the equivalent of the Civil Service Senior Examination. While many of the temporary officers who became permanent would be a credit to any Service, there is no denying the fact that many of them were not clerks of the first class, and this has not added to the equanimity of young men of exceptional ability who have had to regard as seniors men who became permanent after the appointment of the former. There is no possibility of mending the matter now, but as the Public Service Act and the regulations provide for special consideration in the matter of promotion to officers of merit and suitability, it is hoped that it will not be long before all anomalies right themselves. The last of the automatic appointments has now been made. The passing of the 1907 Act appears to have awakened Departments to the fact that the time had arrived to endeavour to build up the Service from below by employing cadets only. While this has been done to a large extent, it is found that Departments which were exempt from the provisions of the Civil Service Acts succeeded in obtaining the appointment of a number of men and women otherwise than from the Civil Service Examination list. As, under the Public Service Act, the Departments referred to have been shorn of this doubtful privilege, there is now every prospect of building the Service up from the foundation. It is only fair to say that the change which has come over the staff during the last six years has, on the whole, been a marked one. There was, however, an unfortunate provision in the 1907 Act under which clerks and others could be continued in temporary employment for practically an unlimited time, and this has been taken advantage of to such an extent as to again leave a number of temporary officers in the Service whose term of employment has been sufficiently long to render it necessary to consider whether such officers, provided they are well reported upon, should not be appointed under conditions which would do no injustice to officers who joined the Service by competitive examination before them. As regards the efficiency of officers, it is sufficient to state here that out of all the reports received many were described as " Very good," and very few indeed were described as on a lower grade than " Fair." Wherever possible, the Commissioners have considered the general conduct of officers. The question will, in some respects, require to be gone into more thoroughly. I hope, however, that sufficient has been done at present to materially alter the official outlook of indifferent officers. Whenever it has been shown that an officer is addicted to over indulgence in alcoholic liquor action has been taken, which it is hoped will have a lasting effect. It is to be feared that there has been too much consideration given in the past to undeserving officers. A frequent condonation of bad conduct has a demoralizing effect on the offending officer, and leads to discontent on the part of his deserving colleagues. Staffing of Departments. It is necessary to remember that in New Zealand the range of Government business—including, as it does, such commercial institutions as the Government Insurance Department, the State Fire Insurance Department, the Public Trust Office, the State Coal Office, besides special Departments which have assumed larger proportions in this Dominion than they have done elsewhere—is very great. There are also many small Departments which, as already mentioned, have been allowed to obtain an independent existence, instead of being mere sections of larger Departments. The training of officers in commercial Departments is widely different to that of officers in revenue-collecting or recording Departments, so that