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Schooner " Ngaru." —Six new planks were put in the port bow where the worm was in evidence, and two new planks were put in the starboard bow where they had been fractured by the anchor. Seven pairs of angle-irons were fitted and bolted from the deck-beams under the deck where they were fractured. They were tied together with 9 in. by 4 in. timber, and bolted. All struts on the sides were replaced by new ones where required. The centreboard was refastened, and new sheaves and bolts for the hoisting-gear were fitted. New hoisting-gear was supplied for the after end. Scow " Onerahi." —This is a wooden vessel, built in New Zealand, launched during the year, and of the following dimensions : length, 73-2 ft.; breadth, 21-5 ft. ; depth, 445 ft. The tonnage is 47 gross and 25 register. The drawings and specifications of the hull were submitted for approval and passed by the Department. The material of the hull is all heart of kauri. The vessel is engaged carrying cargo in the home trade. Schooner " Rangi." —When the sheathing was removed from the stern under the starboard quarter several worm-eaten planks were taken out. New planks have been put in, caulked, and pitted, and covered with new totara sheathing. New totara sheathing has also been placed on about one-fourth of the bottom of the vessel. The donkey-boiler was cleaned out, and the mountings overhauled. A new pressure-gauge was fitted. • Gutter " The Lee." —This cutter has been surveyed twice during the year, and has had extensive repairs to her hull. A new iron bark false keel, 7 in. by 3 in., has been fitted to whole length of keel, and other renewals are : keelson, 9 in. by 7 in., several planks in bottom, port side, five bottom frames, ceiling of hold and stiffening timbers on each side fore and aft at turn of bilge. Several repairs were made to the rudder, and the tiller has been replaced by a new steering-wheel, spindle, blocks, ropes, &c. The windlass was also overhauled. Districts and Inspectors. Mr. Philip J. Carman, who filled the position of Senior Inspector of Machinery and Senior Surveyor of Ships in the Canterbury District, retired from the service on the 31st December, 1912, having reached the age-limit. He had been connected with the Department since the Ist April, 1893. He was attached to the Wellington District until the Ist April, 1895, and ever since then he has been in the Canterbury District. During the whole of his service he displayed great tact and judgment in dealing with both the inspection of machinery and the survey of ships, and has always had the entire confidence of the Department, shipowners, and machinery-owners. I trust that he will be long spared to enjoy his well-earned retirement. Mr. Bethune was transferred from Otago to fill the position vacated by Mr. Carman in the Canterbury District; Mr. Williamson was transferred from Timaru to take up the senior position as Inspector of Machinery and Surveyor of Ships in Otago vacated by Mr. Bethune ; and Mr. A. McKenzie, who had been stationed at Christchurch for some years, was transferred to Timaru to succeed Mr. Williamson ; Mr. Knowles, of the Otago District, was transferred to Christchurch to take up Mr. McKenzie's duties ; and Mr. Cooper, of the Head Office staff, was transferred to Dunedin to succeed Mr. Knowles. The following additions to the technical staff have been made during the year : Mr. John H. Knowles, appointed to Otago District on the 24th April, 1912 ; Mr. A. C. Reid, appointed to the Auckland District on the 31st July, 1912 ; and Mr. J. W. Townsend, appointed to the Head Office staff, Wellington, on the 24th October, 1912. Eeturns. The following are the returns in detail, numbered 1 to 21 : — 1. Number and class of boilers inspected, and fees payable thereon ; the machinery inspected, and the fees payable ; and the classes and numbers of engine-drivers' and electric-tram drivers' certificates issued, and the fees payable therefor. 2. Return of defects found on inspection of boilers. 3. Return of notices given to repair boilers. 4. Return of notices given to fence dangerous parts of machinery. 5. Return of accidents which were not fatal. 6. Return of accidents which proved fatal. 7-15. Names of persons to whom land stationary, winding, locomotive and traction engine, and electric-tram drivers' certificates of competency and service have been granted during the year. 16. List of persons who were examined and passed for marine engineers' certificates of competency. 17. Return of steamers and oil-engined vessels surveyed during the year. 18. Return of sailing-vessels surveyed during the year. 19. Return of vessels surveyed for seaworthiness, &c, during the year. 20. Return showing sums earned or received and amount spent during the financial year for inspection of machinery, examination of engineers, engine-drivers, and electric-tram drivers, and surveys of steamers and sailing-vessels. 21. Return showing the names of owners of additional boilers and transfers which require to be in charge of certificated engine-drivers. I have, &c, Robert Duncan, Chief Inspector of Machinery, Chief Surveyor of Ships, and Chief Examiner of Marine Engineers, Land Engineers, and Engine-drivers. The Hon. the Minister in Charge of the Inspection of Machinery Department.