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The equipment of all corps is not yet complete, but steps are, I understand, being taken to remedy this. The belts and ammunition-pouches now worn by some corps should, as they become unserviceable, be replaced by bandoliers. The waste of ammunition with the pouch equipment in South Africa was enormous. No extra expense would be incurred by this. A proportion of entrenching-tools should be supplied to corps. On service this is a very important matter. "Unifokms. Part of the clothing of a Volunteer should consist of a great-coat; he should also have a waterproof sheet. lam informed there are great coats in store which can be obtained on payment, and the question of waterproof sheets is under consideration. I have under consideration the question as to whether both trouble and expense would not be saved by Government supplying the necessary uniforms, and readjusting the capitation grants proportionately. The New Zealand Forces are now uniformed in practically a universal workingdress, which would assist also to a settlement of this matter. I hope it will be found that such an arrangement would be cheaper for the Government, and the corps themselves. Imperial Beseeve. The question of Imperial Reserve is now one that is occupying some attention at Home. The points that should be observed are, that it should at all times be a reality and not a paper force, and be thoroughly fit for service anywhere. School of Insteuction. Good results may be looked for from this institution. The aim of all training should be to render units, &c, independent of " external " assistance, and this can only be arrived at by the training of their officers and non-commissioned officers. Classes are now held in each district, and the work is continuous throughout the year. Signalling. The value of signalling on service is so great that earnest attention should be given to it in peace-time. Helios should be provided. The training of officers and men for this work does not merely consist in their being able to send and read messages correctly, and much practice is required in maintaining a proper state of efficiency. Deill-halls and Eifle Eanges. In many cases the terms on which drill-halls and rifle ranges are held are unsatisfactory and insecure. The existence of a corps depends on there being a rifle range and drill-hall available for its use. I shall shortly have completed a schedule showing the terms on which these drill-halls and rifle ranges now in existence are held, with suggestions, in cases where their tenure is precarious, as to the most economic and ready means of securing the same. As regards drill-halls, in some cases the sale of the existing unsatisfactory buildings would more than pay for the acquisition ■of suitable ones. During the past year Penrose Eifle Eange has been acquired for the use of the Auckland 'Volunteers. Improvements at Trentham Eange are being gradually carried out by the Permanent Force, .and an excellent camping-ground and range now exists there. Ammunition. It is unfortunate that the price of small-arm ammunition remains so high. The quality of the ammunition supplied by the Colonial Ammunition Company is good. The output of this company, however, is small, and in the event of war, under the existing circumstances, the supply would fall very short of the demand. No factories for the supply of gun-ammunition exist in New Zealand. I have recommended that an adequate reserve of ammunition, both gun and small-arm, be procured forthwith, and always maintained. Conclusion. I have, owing to the despatch of contingents, not made as extended an inspection of corps since my arrival in New Zealand as I otherwise should have done. I have, however, inspected the existing harbour defences of the colony, 17 Mounted Eifle and 34 Infantry corps, together with 1 bearer corps, 1 cycle corps, and 5 cadet corps. There exists throughout, as I have mentioned elsewhere, the necessity for a more thorough trainin" of the lower ranks and smaller units. I am led to the conclusion, too, that the use of instructors has been somewhat misapplied, and that they have in many cases aimed at training the men, instead of assisting in the training of officers and non-commissioned officers of corps. Officers commanding districts are too tied down to their offices at present to carry out inspections as frequently as they should do. It is only by such, and by helping corps to acquire knowledge in their work by pointing out the weak points, that efficiency will be arrived at. An excellent spirit pervades all ranks. Officers and men are anxious to learn and to do things the right way. Better material for soldiers would be hard to find. The training of such men should be carried out in a manner that will, while it inculcates knowledge, and perfection in the use of their arms, preserve at the same time the very valuable quality of individuality. True and sound discipline can only be acquired in military life, as in any other profession, by knowledge on the part of superiors, and by their gaining by this, and by their action in all things, the respect and confidence of those who serve under them. I have, &c, J. M. Babington, Major-General, Commandant of the Forces of New Zealand. The Hon. the Minister of Defence.

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