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"As the mark system, with a very liberal allowance for mistakes, has been adopted with the new work, there'are now, as was expected, far fewer failures than under the old plan of carrying out the examinations. For the foreign-going candidates the percentage of passes so far has been 76 per cent., against only 44 per cent, oi passes for those who presented themselves for examination during the first half of the year under the old system of examination. " There have, however, been fewer candidates for examination ; so far no candidates have presented, themselves for examination for a foreign-going certificate at either Lyttelton or Dunedin, only three in Auckland, and seventeen in Wellington. Now, however, that candidates have had time to find out about and to study the new subjects they are beginning to come up more freely ; six out of seventeen in Wellington having presented themselves for examination in May of this year. " Under the new regulations examinations are held once a month instead of. every week for foreign-going candidates, and fortnightly for the home-trade, river-steamer, and fishing-boat masters. " Captain Whiteford, who went to England to study the new methods and system of examination, has since his return devoted most of his time to examination work, and it has been arranged for him to conduct the examinations in future at Lyttelton and Dunedin, as well as in. Wellington. Captain Dykes will still conduct the examinations in Auckland. The home-trade and other local examinations have also been brought under the mark system, and a little more practical knowledge in connection with the navigation of ships is now required of candidates for home-trade certificates. " A first mate is required to have some knowledge of the use of a station pointer, to set a compass course to counteract the effect of a current, to correct a sounding taken by the lead-line for the state of the tide, and to be able to observe an altitude with the sextant, and read the angle either " on " or " off " the arc. " A master is required to be able to correct his compass by an amplitude of the sun with the aid of an amplitude table, and also by the aid of star inspection azimuth and reduction tables ; to be able to correct the compass error and find the position of ship by one ex-meridian star combined with a bearing of the land, or by two ex-meridian stars within the limits of of the best star reduction and azimuth tables. " Candidates now usually pass very well in the speed test for Morse and semaphore signalling, which was made compulsory in our examinations in September, 1917. "No candidate has passed for extra master during the last year. Two candidates passed for the voluntary compass syllabus examination. " The time service required for second mate, home trade, has been reduced from four to three years, but so far no candidate has presented himself for examination, notwithstanding that there has been a great difficulty in obtaining second mates for the ships which arc required by law to carry them. Probably the reason is that the A.B.s frequently earn more money than the second mates without any responsibility." A statement showing the names of persons to whom certificates of competency have been issued during the year, and the grades of the certificates granted, is appended. Registration of Shipping. Returns are appended showing the vessels registered in the Dominion on the 31st December last. There were then on the register 178 sailing-vessels of 23,158 tons register, and 379 steamers of 65,388 tons register. At the end of the previous year there were 184 sailing-vessels of 22,404 tons, and 376 steamers of 65,092 tons. The number of seamen and boys employed on board was 3,395, as compared with 3,562 at the end of 1917. Survey of Ships. Certificates have been granted to 286 steamers, 476 oil-engine vessels, and 61 sailing-vessels,- as compared with 246 steamers, 404 oil-engine vessels, and 66 sailing-vessels in the previous year. The alterations and repairs carried out to the vessels are described in the appended report of the Chief Surveyor. Frequent inspections of cargo gear are made by Surveyors appointed for the purpose at Auckland and Wellington, and by the ordinary Surveyors at Lyttelton, Dunedin, and Port Chalmers. As a result of the Commission which was set up last year to inquire and report as to the action necessary to prevent accidents to waterside workers, regulations have been made providing, among other things, for the inspection by Inspectors of Machinery of all machinery, as distinguished from running-gear, used for loading and discharging cargo ; for the. inspection by Surveyors of Ships of all running-gear and all subsidiary appliances, whether used in ships or not, used for shipping or discharging cargo, including coal ; for the inspection of every winch used on a ship for working cargo ; and for seeing that proper and efficient bridles are provided for secure attachment to the ends of the fore-and-aft hatch-beams, so that they may be shipped and unshipped without danger to the men who are doing the work. Attached is a return of the vessels to which certificates have been issued. Proceedings were taken by the Department for breaches of the law in connection with the survey of ships as follows: The master of the s.s. " Mana," for having the load-line submerged—fined £5 and costs ; the master of the s.s. " Waipori," for breach of regulations for prevention of accidents— convicted and ordered to pay costs;' F. Lane, owner of a launch, for running boat without lightsfined 10s. and costs ; W. C. Wright, owner of a launch, for running without survey certificate—fined £1 and costs; W. Clark, owner of a launch, for running without survey certificate—fined £1 and costs ; master of " Indianic," for breach of regulations for protection of life on ship—fined £5 and costs ; E. Ogle, owner of a launch, for running without lights—fined 10s. and costs ; master of launch " Almora," for carrying more passengers than allowed by certificate—convicted and ordered to pay costs ; master of launch " Flirt," for carrying more passengers than allowed by certificate—convicted and ordered to pay costs ; master of launch " Sea Queen," for running without certificate—fined £2