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The staff has increased in number during the year from 111 civil and military clerks, of whom 31 were women, to 160, of whom 62 are women. There are now 63 military clerks. No clerks who are eligible for active service are now employed at Base Records. As the result of experience and co-ordination with other Departments, considerable improvements have been effected during the year in the system of record, the object being to ensure accurate information and to make it readily available. The Somme offensive, in which the New-Zealanders took such a prominent part, caused the casualty lists during the months of September, October, and November to be exceptionally heavy. They were, however, dealt with in a very expeditious manner, and all next-of-kin notified by urgent telegrams within a few hours after receipt of cabled lists. During the year a number of complaints were received of the scarcity of hospital and progress reports for soldiers reported wounded during the latter months of 1916. The London authorities were requested to amplify their reports, and as from the 1st November it was arranged for hospital admissions and discharges to be fully reported. The progress of serious cases is also reported once a fortnight. The system is now working in a satisfactory maimer. Owing to Base Records having to cheok the wounded soldiers' messages sent through the New Zealand Inquiry Bureau, it was considered advisable to transfer this work entirely to Base Records. This arrangement took effect as from the 1st March, 1917. The Military Service Act has thrown additional work on Base Records, as the cards of all those drawn in the ballot have to be checked by the Base Records staff to ascertain if by accident or misdescription the names of any men who have left with the Expeditionary Force are included. In the new buildings a large room has been provided for the voluntary staff, to whom the office is greatly indebted for much valuable work performed during the year. 36. Recruiting. On the 25th September, 1916, all matters connected with recruiting for the New Zealand Expeditionary Force were taken over by a directorate created in the Department of the AdjutantGeneral to the Forces. At this time the procedure relating to attestation was varied, recruits being attested on enlistment, instead of in camp, as formerly. The effect of this change is that whereas previously recruits did not become soldiers until they arrived in camp, they are now under military authority from the time they enlist and are attested. Formerly a number of the men who registered failed to parade for the purpose of proceeding to camp, but the new system has gone far to eliminate this wastage. The first ballot under the Military Service Act of 1916 was taken on the 23rd November, 1916. Since that date the compulsory system, which is effected by the Military Service Act, has run concurrently with voluntary recruiting, and ballots are taken at intervals of four weeks. The gross numbers drawn in the ballot have suffered reduction in every case by the striking-off of those men who had previously enlisted and were serving with the Expeditionary Force abroad, or who had attested as volunteers and were awaiting orders to proceed to camp, &c. The Military Service Act affords every man drawn in the ballot a right of appeal. The machinery for dealing with such appeals consisted in the first instance of four Military Service Boards—one in each of the four military districts. Experience, however, proved that this establishment was inadequate, and at the present time nine Military Service Boards are in operation. At the commencement ballot men who appealed were not medically examined until after their appeals had been decided. This system was found to be too slow; and now, with some few exceptions, the medical examination of all men is carried out in rotation and before appeal, arrangements for this being made by Headquarters of the military districts concerned. In the capacity of counsel for the Department a military officer was appointed as Military Representative on each Board, and m every case the result justified the appointment. In providing the machinery for the medical examination of recruits every endeavour has been made to safeguard the interests of the community, and to secure as unbiased and strict a medical examination as possible. Special District Medical Boards were created, members of which were appointed to districts foreign to those m which they had their civil practices. A District Attesting Officer and the necessary staff to cope with the work of attestation is attached to each Medical Board Originally four Medical Boards were appointed—one for each military district— but, as in the case of the Military Service Boards, this was found quite inadequate, and there are now nine of these Boards. A number of men called up in the ballots have failed to present themselves when called upon to attend for medical examination and attestation. The names of such defaulters have been gazetted, and many warrants for arrest have been issued; and, although a considerable number have evaded the efforts of the police to arrest them, there is little doubt that thev will eventually be secured and dealt with. The results of the medical examinations of the men called up prove that up to and including the fourth ballot approximately 47 per cent, were passed as fit for foreign service. Of those classed fit for foreign service a considerable number were appellants whose appeals were either allowed or adjourned As far as the adjourned cases are concerned, the services of these men should be available before the Second Division is called up. It having become necessary to discharge many men from camp after a short period of training, it became obvious that the standard of medical examination was not sufficiently high. A conference of the members of the Medical Boards was held at the end of March, and it was decided to raise the standard of fitness required. lie result was that m he first ballot under the new standard the proportion of men passed as fit tell considerably : of these many were appellants, and this ballot necessarily produced considerably fewer men than any of those preceding it. To meet the situation thus created the sixth ballot was drawn to a proportion of four to one instead of three to one, and the proportion was eventually raised to five to one in the seventh ballot.