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which, if it fails to financially justify its existence, becomes a charge on the general public. All capital indebtedness in connection therewith, whether local body or Government, combines in general public indebtedness. To meet that indebtedness, direct charges on users and goods are, or should be, imposed to their economic limit. Any shortage must still be provided by means of indirect taxation. The particular object of this discussion of a matter which I believe to be of primary importance is to urge that each harbour-work proposed should be the subject of close investigation with a view to determining, before it is authorized, either by poll of ratepayers, special Act, or the Governor-General in Council, whether (a) a harbour-work is essentia], transport of goods being not otherwise economically possible ; (b) it is sound from the navigational and engineering points of view ; (c) if other means of transport exist, whether the provision of an additional means of transport is justifiable ; and (d) whether immediately, or within a reasonable period, the harbour-work will be of such advantage as to be self-supporting without recourse to special rating. There is a marked tendency at present to indulge in heavy expenditure on harbours of secondary and tertiary importance to provide accommodation for overseas vessels. While this may give direct benefit in one direction, yet in others disadvantages follow. Such expenditure generally results in the application of rating-powers, and when these become objectionable or burdensome'to the district concerned, appeal to the Government for financial assistance. It is unquestionable that increased freights are demanded by overseas shipping companies to compensate them for the expenditure involved in spending a very considerable period of time picking up cargo at several ports round the coast. It follows, therefore, that what is gained in one way is lost in others. Examination op Marine Engineers. Hitherto all Inspectors of Machinery have held appointment as Examiners of Marine Engineers. We have thus at the present time thirty-three possible Examiners. Part of the examination is written and part oral. With so many Examiners it follows almost naturally that there can. be little real uniformity of standard of marking throughout the Dominion. To obtain the best results and standards, and in order to keep fully abreast of the times, an Examiner should be in constant association with this class of work, and not, as at present, simply take it up for a few days at long intervals. Furthermore, with examinations in so many hands, there is always a possibility, remote though it may be, of the integrity of examination being attacked. Arrangements are being made to adopt the same system as has been in operation for some years in connection with examination of Masters and Mates, whereby the whole of the examinations throughout the Dominion will be conducted by two specially selected officers who will work in close association with one another and under more direct supervision by the Chief Examiner. By this means uniformity of standard will be attained, and responsibility for integrity of examination will be confined to the narrowest possible limit. During the year 211 candidates passed their examinations and 105 failed. Of those who passed, eighty-four were engineers of sea-going ships, twelve were engineers of steamers plying within restricted limits, thirty were engineers of sea-going motor-propelled ships, and eighty-five were engineers of such boats plying within restricted limits. The number of motor-vessels is increasing every year, and a higher standard of examination is now required for motor engineers. The Department issues first- and second-class certificates to engineers of sea-going motor-ships, but these certificates are not of equal validity to similar certificates issued by the Board of Trade. Amendments to the Shipping and Seamen Act and to the regulations governing examinations will be necessary before the standard of the examinations can be raised to that set by the; Board of Trade. It is important that the Department should obtain from the Board of Trade the same recognition for the motor certificate that has been granted the steam certificate. Inspection of Machinery Act. 'A considerable section of the general public—the owners of boilers and machinery—which is concerned equally with the Department in complying with the requirements of the Inspection of Machinery Act, appears to regard its legal obligations as optional. A number of prosecutions have been instituted and successfully carried through in order to impress on certain owners the fact that the law exists and must be observed. In certain glaring cases where accidents have occurred through neglect to comply with its requirements heavy penalties have been asked for and obtained ; in other cases lesser penalties, according to the nature of the offence, have been asked for. If the warning conveyed by these prosecutions is not observed, maximum penalties will be asked for in every case. The Department has no desire to adopt a pin-pricking policy, but it cannot allow requirements observed by the groat majority to be ignored by others, nor can it allow owners to disregard the necessity, legal and humanitarian, to satisfactorily safeguard human life by providing adequate protection for machinery-operators. Inspection and Adjustment of Ships' Compasses. The adjustment of compasses on home-trade and foreign-going vessels has been performed by compass-adjusters who are licensed by this Department, when and where necessary, and in accordance with the existing Compass Regulations ; and the results of all compass-adjustments have; been investigated at the Nautical Adviser's office. The majority of adjustments were found to have been performed in a skilful manner, and on the whole were satisfactory. The majority of vessels have their compassess adjusted by persons who are licensed for that purpose by this Department ; whilst a few vessels have their compasses adjusted by their own masters in eases where the latter possess qualifications enabling them to do this.