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given was of necessity very short, and the syllabus at first sight appeared rather alarming. These two factors account for the fact that only fifteen candidates presented themselves for examination, and of these only eight reached a standard sufficiently high to warrant their being sent to the college; the remaining two vacancies were filled by nomination. These Cadets proceeded to Australia on 16th June, and notification has been received that they have arrived and are now at work. The next examination for a similar number of candidates will be held in December, 1911, in connection with the Matriculation Examination. The syllabus and results of the last examination have now been widely circulated, and it is hoped that a large number of candidates will be forthcoming. Our thanks are due to the University of New Zealand for holding the last examination at short notice, and for undertaking the next. 6. Appointments and Promotions of Officers. Appointments as Territorial officers will go to the most suitable and most deserving from the ranks. or to those who show most promise as Senior Cadets. Every recommendation for a commission will be made in the first instance by the officer commanding the unit or corps in which the officer is to serve. No officers will be promoted, even provisionally, unless they have passed the prescribed examination for the next higher rank. The promotion examinations will in future be held on exactly the same lines as at Home. 7. Officers' Training Corps. It was decided that the formation of Officers' Training Corps should not be proceeded with, as it was not considered that the officers of a Citizen Army should necessarily be drawn from any particular corps or class of the community. The Officers' Training Corps was an organization primarily designed to supply a want in a voluntary system, and has no place now that this Dominion has accepted the principle of universal obligation for military sendee. 8. Further Training of Officers. One officer of the New Zealand Staff Corps is now at the Staff College at Camberley, and I am glad to be able to report that for the first time there are candidates in the Dominion for the examination for entrance to the Staff College. Four officers sat at the examination held this month. One vacancy is promised for the Staff College at Camberley, and it is hoped that another may possibly be obtained. Six officers of the New Zealand Staff Corps have been sent Home for a year's training, and application has been made for four officers to be sent for six months' training to India. Arrangements arc also in progress for sending a certain number of Citizen officers to India for training, and for the exchange of officers of the New Zealand Staff Corps with a corresponding number of permanent officers from Canada and Australia. 9. Courses of Instruction. In the future I think it is imperative that the officers and N.C.O.s of the New Zealand Staff Corps and the Permanent Staff should be assembled annually, to brush up their military knowledge, as was done at the beginning of this year at the camp at Tauherenikau. The nature of the duties of these officers and N.C.O.s under the new scheme, and their isolated positions in the areas, makes it very difficult for them to keep themselves up to date or to exchange ideas on military subjects. The same applies to the senior officers of the Territorial Forces, and I think that an annual assembly in camp, not only of the officers and N.C.O.s of the Permanent Staff, but also of the Territorial Brigadiers and Commanding Officers, should be held. Similarly, the 100 officers, N.C.O.s, and men of the R.N.Z.F.A., who will be scattered in the various cadres of the Territorial field batteries throughout the Dominion, should be assembled annually and trained as a battery. Classes of instruction for junior Territorial officers and N.C.O.s have been started in districts, and will be held regularly, and I hope shortly to make proposals for the establishment of a School of Musketry. 10. Retirements. „ I wish to call your particular attention to the ages for retirement for officers both of the New Zealand Staff Corps and the Territorial Forces as laid down by the Regulations. These must be most strictly enforced, if the proper efficiency of the body of officers is to be maintained. In the past it has been a great discouragement to junior officers to find that their chances of promotion and advancement were blocked by the retention of officers beyond a reasonable age-limit. 11. Harbour-defences. I have inspected all the harbour-defences of the Dominion, and, though exception may be taken in some cases to the siting of the forts, I am of opinion that the existing defences are in excellent order and aie sufficient for our present needs. The new works at Wellington and Auckland have been practically completed during the year. The works and armament are very well kept and cared for by the Royal New Zealand Artillery; the personnel of the 'Territorial Garrison Artillery is excellent, and will be able to efficiently man these defences ; and I do not recommend that at present any considerable expenditure should be undertaken with regard to the harbour-defences. I consider that we should rely for the defence of the country upon an efficient mobile force rather than upon fixed defences, and that our energies and money should be devoted first and foremost to the creation of an efficient mobile Territorial army. What is required, rather than guns of position, is an efficient mobile Artillery which can be sent to meet a possible invader who might land anywhere round the coast. It is impossible to attempt to defend all the innumerable ports and harbours in the country, and our besi chance of dealing effectively with an invader is to go to meet him while he is landing or after he has landed.

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