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Coast, Middle Island, and the Lake District, Otago, all those who were still drawing the extra Is. per diem as goldfields allowance ; and, as none of these men had been shifted for several years, it was considered that the constables themselves, as well as their subdistricts, would be benefited by judicious changes. When the labour troubles occurred on the West Coast coalfields it was found necessary to reinforce the police at those localities, and, in order to save expense and unnecessary hardship, single men were sent to the Coast. When the labour troubles ceased, it was thought advisable, on the score of economy, that the men who had been sent as reinforcements should be retained, and those who from their length of service on the Coast it was deemed desirable to remove should be sent to Wellington and elsewhere until suitable stations to give them charge of became vacant. Previous to these transfers a considerable amount of discontent existed on the Coast, in consequence of the old hands receiving Is. per diem goldfields allowance, in which the younger hands did not participate ; while constant complaints were being received that sly grog-selling was being carried on in these districts with impunity. Even the older hands drawing the goldfields allowance made no secret of their discontent at having to live where provisions were so expensive, and where there were no openings for employment for their families as they grew up; but when ordered to shift they at once brought all the political and other influence at their command to bear on the head of the department to have the removals cancelled. While on the subject of these West Coast changes, I may report that during the past year in the Nelson and Westland District sixteen persons have been convicted of sly grogselling, and fines amounting to £292 10s. have been inflicted. The cost of these removals was about £700. On taking charge of the department I found that Inspectors in charge of districts had assumed the right of transferring constables from one station to another within the district without any reference to this office, and doubtless in this way unnecessary changes have been made ; but that practice has now ceased, and all transfers must be sanctioned from head-quarters. The attention of all concerned has recently been called to the necessity of special and more stringent supervision being exercised by the police in the matter of the Licensing Act, more especially as regards Sunday trading and the closing of houses nightly at the stipulated hours, and directing that transgressors, when discovered, are invariably to be summoned to answer for their conduct. Similar instructions have also been issued with reference to any infringement of the provisions of the Adulteration of Food Act; and it is believed there will be fewer complaints under these headings in future. Though virtually no promotions have been made since I took charge, it is an open secret that much discontent prevailed in the Force owing to the system, or, rather, want of system, which hitherto had been adopted in selecting men for promotion and charge of stations, together with an entire absence of classification of stations and subdistricts. At the present time, in all parts of the colony, there are to be found third-class constables in charge of important stations, while firstclass constables are kept on street duty and compelled to pay house-rent, while their juniors have the lighter duties to perform and get Government quarters provided. Rewards also appear to have been indiscriminately distributed, while cases really deserving of both remuneration and mention in merit-sheets appear to have been entirely overlooked. All these circumstances have tended considerably to bring about uneasiness and discontent. A better feeling has, I am glad to say, already been established, and, though promotion has been blocked, the disappointment is less acute than if juniors had been promoted over the heads of their seniors for no greater qualifications or recommendations than political or local influences. The system of examination which was in force last year was found to be useless, expensive, and harassing. Many members of the Force who at small stations are also Clerks of Court had an unfair advantage over the hard-worked town constables, inasmuch as the former had access to the statutes, with spare time to study them, with the constant experience to be derived from attending Courts, so that had the examination test continued it would have been found at no distant date that the majority of those qualified for promotion had served most of their time as Clerks of Courts in small stations, and would probably, from want of experience, be quite unfit for the duties of a non-commissioned officer at the larger places. Moreover candidates had to leave their stations and travel long distances at the public expense to present themselves at these examinations without the department deriving any compensating benefit. In the English Police and the Royal Irish Constabulary these examinations have been found unnecessary, and they have now been discontinued in New Zealand. It has been pointed out that the gratuity of one year's pay on discharge is quite an inadequate reward to a man w Tell advanced in years, after perhaps twenty or five and twenty years' faithful service in the police; but it must be recollected that besides the cost of this one year's pay on retirement the Government has to expend £6,000 per annum in long-service pay, A superannuation scheme was framed on the lines of the Government taking this long-service pay, together with the one year's pay allowed, as compensation, and investing them in insurance to secure every man a lump sum of £400, or an allowance of little more than £1 a week if not taken in a lump sum, on attaining the age of sixty-five years ; but on referring the matter to the Force I found the majority were against giving up the long-service pay, and I could not see my way to recommend the Government to grant both long-service pay while serving and a large superannuation allowance on retirement. The opinion seemed to pervade the Force generally that a liberal scale of pension should be granted; but, as pensions are discontinued in all other branches of the service, the idea could not be entertained, and the whole question of superannuation allowances had to be abandoned for the present, but I do not intend to lose sight of it. The criminal statistics for the year ending the 31st December, 1890, show an increase of 170 in the gross total of offences, the North Island showing a decrease of 50 and the South Island an increase of 220. Drunkenness has increased by 246 in the former and 176 in the latter Island.

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