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17. The Area System. The area system, as recommended by Field-Marshal Viscount Kitchener, has been adopted in the Dominion, and details of the division of the country into areas, and of the appointment of permanent officers and N.C.O.s to the areas, will be found in Appendix C and in the Army List. 18. Registration. The registration of all youths available for service has been completed, with the following result, up to 17th July: Territorials, 21,838 ; Senior Cadets, 29,991. To arrive at the numbers available for training, these must be added to the Territorials now serving, as follows : Under twenty-one years of age, 6,309 ; those over age desirous of and peimitted to continue service, 2,862 : making a total of 31,009 —practically just the strength required for the new Army establishment of 30,CC0 men. A certain percentage of these (it is impossible to say how many) will be eliminated by the results of the medical examination, which is now proceeding. We can, however, well afford to he below our full establishment at first. The details of the method in which the registration was conducted will be found in Appendices C and D. 19. Medical Examination. The training is to be as far as possible universal, and it is hoped that, in the Cadet stages, many weaklings will derive benefit from it. The standard of rejection will therefore be a light one, and only those likely to be injured in any way by the training they have to undergo will be rejected. 20. Exemptions. The only exemptions permitted are those who are physically unfit as above, and those who are employed, under the Education Department, in a military capacity as Instructors for Junior Cadets. Special Railway and Post and Telegraph Corps are being foimed for Railway and Post Office men. These Railway and Post Office Corps will he of great value to the Army. A few sparsely inhabited areas have been exempted from training for the present (vide New Zealand Gazette notice of July 28th). But, with the exception of those living in these areas, all males between the ages of fourteen and twentyone will be posted to units for training, however far they may he from towns or railways. Villages, farms, &c, will be visited by officers aid N.C.O.s of the Peimanent Stati for the purpose of carrying out the necessary drills, and all will be assembled for regimental drills and battalion camps. (For further details see Appendix E.) 21. Conditions of Service and Training of the New Forces. The paper, which gives complete information on the subject (Appendix F) was prepared and issued by the General Staff. Every possible publicity was given to this pamphlet, which has been widely distributed. I have personally visited all districts in the Dominion, and by meeting employers of labour, citizens, farmers, and, as far as possible, all classes of the community, have, I hope, succeeded in removing and allaying misunderstandings and misapprehensions on the subject. Wherever I have been I have received the most cordial support from all with whom I have come in contact. 22. Old Volunteers. During my tour I have inspected a considerable number of the old Volunteers and Senior Cadets, and have been very much struck with the excellence of the material which they represent, and with the spirit in which they are entering into the new scheme. lam glad to say that many of the officers, N.C.O.s, and men of the old Volunteer Forces are remaining in the new Citizen Army, and I feel sure that they will prove a valuable nucleus to the Force. 23. Boy Scouts. The situation as regards the relationship between the Boy Scouts and the Senior Cadets is most satisfactory, and arrangements have been made for the Boy Scouts who are incorporated into the Senior Cadets to wear their distinctive uniform, and to do their Senior Cadet training as far as possible in Boy Scout units. In future Boy Scout uniforms for these units will be provided by the Government. 24. Musketry. The standard of military rifle shooting in the Dominion is somewhat behind the times, but with the promised co-operation of the executive of the Dominion Rifle Association and of presidents of Rifle Clubs, and the experience that will have been gained by the Bisley team which has gone Home this year, I have no doubt that we shall soon be able to make it more up-to-date. lam unable to report yet on the adequacy of the rifle ranges in the Dominion, but the matter will have my early attention. 25. Dominion Rifle Association. The Defence Department, in conjunction with the existing staff of the Association, has undertaken its futuie management. The programme for next year will be drawn up on up-to-date lines, and I am glad to be able to report that Colonel Collins, C.M.G., 1.5.0., v.d., A.D.C., who has hitherto been the chief Executive Officer, has kindly consented to continue to assist the Department in that capacity. No expenditure will be incurred by the Department in connection with the meeting, which will not have a definite military value. 26. Rifle Clubs. It is hoped that all men, after they have completed their Territorial service at the age of twentyfive, or their service in the Reserve at the age of thirty, will join a Rifle Club and remain in it till the age of fifty-five. By this means, a second voluntary Reserve will be formed from the Rifle Clubs, who will undertake, in return for certain concessions granted by the Government, to carry out an annual course of musketry prescribed by the military authorities, and to be called up for service in time of emergency.