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12. The question of "exemptions will arise, when it is suggested by the Field-Marshal—(a) That the welfare of the family should not be prejudiced ; (b) that the State should get the best men available. Factor (a) points to the exemption of those who are the sole or main support of their family, such as the only or eldest son of a widow, or of a man who is himself incapable of earning a livelihood for those dependent on him. Factor (6) demands the exclusion from the (citizen) Force of all criminals, and should restrict the selection of annual quota to those males who are physically the fittest of their year, and therefore the most eligible for the honour of serving their country. 13. Division op the Dominion into Subdivisions or Arkas. As the Territorial Force becomes organized on the new establishments, each of the twenty-eight regiments and battalions (seven in each district) is to have a permanent Adjutant and N.C.O. 14. For recruiting purposes, each district is accordingly being subdivided into four Infantry battalion recruiting siibdivisions, to also supply its quota of other branches of the Territorial Force, the permanent staff in these subdivisions also assisting in the registration and local training of senior cadets. 15. The thirty permanent officers and the thirty-four staff N.C.O. instructors at present employed on the permanent staff of headquarters and districts will be maintained, in addition to which at least twenty-eight officers as Adjutants and twenty-eight N.C.O. instructors are required, one each for each regiment and battalion, the other branches of the Force being supplied with permanent staff as per establishment, Schedule 111. 16. The four battalion subdivisions in each district to be further subdivided into two areas, making eight areas in each district (thirty-two in all the Dominion (see Schedule IV)), with one staff N.C.O. to each provided for above, whose duty will be registration, recruiting, assist in training the senior cadets and Territorial Force, these to work in conjunction with the permanent staff of the regiments and battalions as regards registration, until the compulsory clauses would become automatic by the recordbook system. 17. The senior Adjutant in the battalion subdivisions before referred to to be the senior subdivision officer, the N.C.O.s allotted to the two areas in each battalion subdivision working under his direction, the Officer Commanding the District controlling and directing the whole. This will admit that at any time the number of areas can be increased in a battalion subdivision by the appointment of additional officers and N.C.O.s, without interference with the general organization, to meet any expansion of the system which might become necessary. 18. Field-Marshal Lord Kitchener, in his covering letter to New Zealand, recommends, say, thirty areas in the North Island, and twenty-five areas in the South Island, or, say, fifty-five areas for the Dominion. To meet this it will only be necessary to further divide the battalion subdivisions already mentioned —in the South Island into three areas instead of two, making twenty-four areas in the South Island ; in the North Island into four areas instead of two, making thirty-two areas in the North Island ; or fifty-six areas in the Dominion (see Schedule IV). 19. The organization into battalion subdivisions and thirty-two areas for the Dominion will be pill into effect during the present year, and next year the additional officers and N.C.O.s should be provided for, and the areas extended to fifty-six, thus eventually reaching the area, organization, and working recommended by Field-Marshal Lord Kitchener. Duties oj<' Permanent Okbtceks and N.C.O.s jn Oharg-e op Subdivisions or Abbas. (Extract from Memorandum on the Defense of Australia by Field-Marshal Lord Kitchener.) 20. The duties of the officer in charge of an area would include, — (a.) The inspection of the junior cadets training in the schools. (/;.) The organization and training of the senior cadets. (c.) The enrolment, equipment, and training of the adult from eighteen to nineteen years of age. (</.) The equipment, organization, and training of the trained man from nineteen to twentyfive years of age. («.) The supervision of the registration of all male inhabitants. (/.) The maintenance of all lists of males twenty-five to twenty-six years of age who have just completed training. (</.) Communication to other areas of all changes of residence of men under training, with particular's of their military efficiency. (//.) Information regarding the numbers, residence, and classification of the Reserve men in the areas ; and the organization and maintenance of rifle clubs. {i.) A thorough acquaintance with the inhabitants of his area. In all these matters, except registration and enrolment, he would be assisted by the officers of the Citizen Force of the area.

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