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With regard to the Territorials and Cadets in town areas, all districts are unanimous that the Territorial camps this year have shown an increased standard of both discipline and efficiency. This has been attributable to the fact that— (1.) The Territorial Force is now almost entirely- composed of youths of eighteen and nineteen years of age. The majority of these have passed through, four years of progressive training in the Cadet Forces, and are imbued with a higher appreciation of the necessity for military training than the Territorial recruits of the past. (2.) The majority of units are now very reduced in numbers, owing to the fact that all their eligible members have proceeded to the front. This year it was decided to concentrate the available instructional staff in each district and to bring units into concentration camps. The, system has proved infinitely superior to the past system of unit camps, and is considered the most economical and productive method. (3.) At the outbreak of war a considerable number of temporary appointments to the training staff were made in the Dominion. A. large number of these temporary instructors were deficient in experience and partially ignorant of their duties. During the past four years every endeavour has been made by the General Staff to improve the efficiency of these instructors by means of district courses of instruction, with the result that the majority are now efficient. This efficiency is largely responsible for tho increased results of the past year. The same applies to temporary and reserve officers of units, who have also benefited by instructional courses during the past four years. (4.) Annually some seven to eight thousand Territorials arrive at military age for service with the Expeditionary Force. This knowledge, and the fact that the Territorial has now been taught to appreciate the value of good discipline and' individual efficiency, has undoubtedly bad a considerable effect on the improvement that has been made. Although the number of Territorials and Cadets in training has been diminished, the standard of training has shown a marked improvement, and the work performed in the annual camps of 1918 has been more satisfactory than in any previous year of the war. The Director of Military Training, Officers Commanding Districts, and those commanding the Territorial camps have expressed their satisfaction with the increased discipline and individual efficiency of those attending. In cases where undue hardship was proved exemption from military training has been granted, and to facilitate this special arrangements were made to place the power of exemption in the hands of senior officers, from whom exemption is obtainable in all genuine cases with a minimum amount of delay or inconvenience. Tho wisdom of having retained the training of the Territorial and Cadet Forces throughout the war is borne out by the following extract from the Defence Expenditure Commission's report: " The testimony of witnesses whose opinion is well worthy of consideration agreed that more was due to the work done in the Territorial Force in the short time, of its existence before the war than was at present understood, and that it was most desirable, in spite of present manifold distractions, to keep the machine moving even at a slow gait, for if it were allowed to stop the task of starting it again would be huge." 2. Territorial Camps. (a.) In accordance with instructions issued by the General Staff, sufficient camps were held in each district to provide for the training of those Territorials able to enter camp. These camps have been chosen with regard to the following : — (1.) To permit the concentration of Territorials with, the least possible delay and inconvenience to those attending : (2.) Adjacent to rifle ranges or other suitable training-ground : (3.) The most economical sites. In the majority of cases the camps were held in suitable localities which fulfilled all the above conditions, although in certain camps range accommodation was either limited or entirely absent. In such cases the, requirements of economy and proximity to Territorials attending outweighed the necessity for range accommodation, and in these cases it was generally recognized that musketry could be performed during other portions of the year. The use of show and race grounds for the purpose of these concentration camps effected a considerable saving in tentage, and permitted instruction in wet weather. With the exception of Canterbury District these concentration camps were under the command of the senior Territorial officers, all of whom performed this duty most creditably. Every endeavour was made to place the minimum strain on both the employer and employee engaged in essential industries. Elaborate arrangements ensured that as few employees as possible from any particular firm or industry attended camp at any one time Liberal exemption from training was granted, and arrangements were made to ensure genuine cases of hardship obtaining exemption with the minimum amount of trouble. Unit, camps were suspended, and district concentration camps held in their stead. These camps were held at suitable centres throughout each district and allowed the concentration of the most expert instructors, who after finishing one camp passed on to the next. This afforded all attending an excellent opportunity of benefiting to the maximum extent by tho instruction given, while permitting the strength of the instructional staff to be reduced to a minimum. This system, while imposing a heavy strain on the instructional staff for a prolonged period, resulted in a very considerable improvement in both, discipline and individual efficiency. Thanks to the spirit and energy with which the training staff worked, all difficulties were surmounted and good results obtained. The outstanding feature of the 1917-18 Territorial camps was the presence of a large percentage of recruits who had