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sites were inspected in various localities from North Auckland to Canterbury, and a suitable site has been selected. No development work has, however, been undertaken as yet, for until the Australian Government establishes a inooring-tower base in one of the eastern States it would not be a commercial proposition for an airship service to be extended from that country to New Zealand. At present the Commonwealth Government has only made provision for the acquisition of a site in Western Australia. (f) Civil Aviation. In April the Government announced its intention of encouraging flying by offering assistance to approved flying clubs. This announcement has aroused keen interest throughout the Dominion, and steps have been taken in several cities and towns to form clubs. Altogether four clubs have actually been formed, and several others are being organized. During the current financial year it is proposed to assist two clubs. The number is being so limited in order that the available funds may be concentrated and the clubs given every opportunity of becoming firmly established before an attempt is made to assist others. Four D.H. 60 G Moth aeroplanes are now on order for issue on loan to the approved clubs. Standard conditions governing the conditions under which assistance may be afforded to clubs by the Department have been drawn up and issued for general information. Under these conditions " approved " clubs are issued with two aeroplanes and offered a bonus of £25 for each pilot qualifying for his ticket (Pilot's License A) up to a maximum of twenty pilots per club in one financial year. The club is required to provide for and guarantee the proper care and maintenance of aircraft, and for the observance of Aviation Regulations. In the event of clubs finding that the original issue of aircraft is not sufficient for their requirements the Department undertakes to issue machines, with the proviso that the club also furnishes a similar quota at its own expense. The Air Staff of the Department will supervise the activities of the club, and give its services free of charge for the purposes of making periodical inspections of plant to ensure its being airworthy. The Blenheim Borough Council has set aside a portion of the Omaka Domain for use as a municipal aerodrome. This excellent example of foresight is one that could, with much benefit to aviation, be followed by other Councils and public bodies. In the selection of landing-grounds great assistance can be given to the departmental officers by local bodies and citizens reporting possible sites, stating dimensions, quality of surface, general location with regard to physical features, and freedom from obstacles. By this means it would be possible to avoid unnecessary expense and waste of time visiting localities to inspect areas which are obviously unsuitable. 4. The Territorial Force. (a) Commands. During the year officers have been transferred to the reserve after completing their term in command of units as follows :— Lieut.-Colonel G. R. Mitchell, D.5.0., the Otago Mounted Rifles. Lieut.-Colonel E. J. Hulbert, D.5.0., the Manawatu Mounted Rifles. Lieut.-Colonel E. G. Fraser, Y.D., the Auckland Regiment. Also the command of the 3rd Mounted Rifles Brigade has been rendered vacant by the death of Colonel P. M. Acton-Adams, D.5.0., V.D. The following have been appointed to command units : — Major F. Waite, D.5.0., the Otago Mounted Rifles. Lieut.-Colonel R. C. Wickins, D.5.0., the Southern Command Artillery Group. Lieut.-Colonel T. H. Dawson, C.M.G., C.8.E., the Auckland Regiment. Lieut.-Colonel A. S. Wilder, D.5.0., M.G., the Manawatu Mounted Rifles. Lieut.-Colonel J. Armstrong, the Wellington East Coast Mounted Rifles. Lieut.-Colonel C. J. W. Lockie, the North Auckland Regiment. (b) General: Training and Progress. With the steady increase in the population of this Dominion it is inevitable that the strength of the Territorial Force has been correspondingly increasing. The present strength of the Territorial Force is shown in Appendix I, and it will be seen that notwithstanding the higher physical standard required at the last annual posting, and which has to some extent retarded the normal rate of increase, the total strength of the Territorial Field Force is at present considerably above its prescribed peace establishment. As stated in my last report, the only sound way of providing for the additional numbers coming forward each year for Territorial service is the formation of new units. The question of finance renders it impossible to form these, and therefore the only way to keep existing units within their peace establishment is by raising the physical standard of the Territorial Force. It is most undesirable that units should exceed their normal establishment, as, quite apart from the limited drill-hall accommodation available and consequent congestion during training, the excessive number present on parade and in the annual training-camps interfers very seriously with efficient control and instruction, and furthermore the heavy additional administrative work throughout the year and in camp overtakes the staff available. Many of the larger units, particularly the Infantry battalions in Auckland, Wellington, Christchurch, and Dunedin, are becoming unwieldy, and therefore if their efficiency is to be maintained it is essential that their excessive numbers should be reduced. To ensure that the Territorial Force shall be brought down to its peace establishment during the coming training-year it has been decided to adopt the following procedure at the next annual posting.

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