H.~ 30a.

After conferring with the Treasury and Audit Departments a suitable method of canteen accounting has been instituted which will greatly facilitate the financial control of operations at individual canteens, and, in addition, the Audit Department has arranged for a continuous audit of accounts. Now that the process of installing and equipping canteens has been achieved, the work of the Section as a whole has settled down and the canteen organization is functioning successfully and to the satisfaction of the Services concerned. The profits from the canteens, in accordance with the decision of the Government, are being distributed among the various units of the New Zealand armed Forces. The canteen service has been well patronized by the men in camp, and it appears that the facilities have been fully appreciated. PUKCHASING SUCTION. On the outbreak of war it became necessary to ensure close co-operation between the officers responsible for food control and the officers handling the purchase of foodstuffs on behalf of the Government. This resulted in the inauguration of the Purchasing Section by the transfer to the Internal Marketing Division on 11th September, 1939, of the officers of the Railways Refreshment Branch who had, up to the outbreak of war, been actively engaged in the purchase and supply of foodstuffs to governmental institutions. The Section as a whole, in performing the allotted functions, has effected to its fullest capacity those economies which the activities controlled by the Government Stores Control Board were originally inaugurated to attain. The very large increase in the personnel of the defence Services, both for home defence and overseas purposes; has necessitated new methods of purchasing being evolved and more direct avenues of supply to be exploited. This has been brought about principally by the shortage of certain imported l'<>< >d stuffs. Increasing difficulty has been experienced in obtaining adequate supplies of many food commodities, but a diligent searching of all available sources of supply has resulted in sufficient (though in many instances much reduced) quantities for dietary purposes being supplied. Whenever possible, New Zealand made or produced goods are substituted for imported lines, and institutions have been appealed to (from tinie to time) to reduce the use of imported foodstuffs to the lowest possible minimum consistent with dietary requirements. The responsibility for the ordering of goods is the care of the Departments concerned, and only where it is considered that economies could be effected or a greater use made of locally produced foodstuffs are suggestions made by the Division's purchasing officer. ' I The utmost endeavour is made to supply in full the demands of such institutions as mental hospitals, St. Helens Hospitals, tourist hostels, also the requirements of the armed Services. The protection of institutions, &c, as regards the quality and freshness of supply of items supplied under contract, such as milk, bread, ham, bacon, meat, and fish, has received constant care and supervision. In so far as the armed Services are concerned, arrangements have been made with the Departments of Health, Agriculture, and Marine for inspecting officers to examine relevant supplies regularly and, where the quality or condition of any supply is in doubt, to advise the supply officer of the camp concerned as to whether the goods should be rejected or not. These precautions have proved to be both necessary and effective, as in many instances unsatisfactory supplies have been rejected at the time of delivery. In extreme cases contracts have been summarily determined, and in others contracture h.iw been warned that a further complaint in respect of goods supplied would lead to the cancellation of the contract. These measures have been effective, and all contracts are now being fulfilled to the satisfaction of the institutions or Services concerned. Criticisms of the quality of the foodstuffs supplied to .Defence camps have appeared in the press from time to time, but upon investigation the reports were proved in every instance to be founded on information which was contrary to fact. As anticipated, the co-ordination of food control and Government purchasing activities has proved a great advantage to the Government and has ensured the most economical use of available supplies. It has also assisted several Government Departments by relieving them of the detailed arrangement of purchasing contracts. In its operations the Purchasing Section has derived considerable benefit from the work of other sections of the Internal Marketing Division concerned with the local distribution of food products such as butter, cheese, eggs, and fruit. FOOD CONTROL. Early in September the Director of Internal Marketing Division, Mr. F. R. Picot was appointed to the position of Food Controller under the Emergency Regulations, and all matters in regard to food control have since been dealt with by the Head Office of the Division under the direction of the Ministry of Supply. Arrangements were immediately made for the systematic collection of information concerning stocks of foodstuffs, and weekly returns have since been prepared of a selected list of twenty-seven important items, including tea, coffee, salt, bakers' supplies, preserved fruits, tinned fish, and imported cereal foodstuffs. Throughout the first three months of the War there was a tendency for householders to stock foodstuffs in excess of normal requirements, and this led to considerable difficulty on the part of the wholesale and retail trades in their endeavour to maintain continuous supplies. This difficulty gradually disappeared as people realized that most imported foodstuffs would continue to come to hand from overseas despite war conditions.

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