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even egress to the Reserve. Though satisfactory as an expedient, this revision did not overcome the defects that crept in on the initial postings, which will now become apparent when the men commence to go to the Reserve. To enable a force to reach a maximum strength of 30,000 by seven annual quotas, an even posting of not less than 4,250 per annum is required. As, however, the men of each quota have to serve seven years, it is obvious that a certain amount of Wastage, due to casualties, &c, must occur, so that the first quota of the seven-years cycle requires to be considerably over 4,250, as it will fall away annually. After the 1915 posting the Territorial Force may be considered as consisting of seven classes, each class representing members born in the same year. Thus, the men of the latest class, 1915, will be eighteen years of age, the next class nineteen years of age, and so on. Taking 5,000 as the approximately correct number for each fresh posting of lads of eighteen, and allowing 5 per cent, for wastage, the Force should at present consist of classes of the following ages and strengths !• — Those of 18 years of age (1915 quota).. .. .. .. .. 5,000 19 „ (1914 quota).. .. .. .. .. 4,750 20 „ (1913 quota).. .. .. .. .. 4,500 21 „ (1912 quota).. .. .. .. .. 4,265 22 „ (1911 quota).. .. .. .. .. 4,035 23 „ (1911 quota).. .. .. .. .. 3,830 24 „ (1911 quota).. .. .. .. .. 3,620 Total .. .. .. .. .. .. 30,000 A return of the numbers at present serving in New Zealand in the Territorial Force according to their ages has been carefully compiled for comparison with the above table, and it will bo the duty of posting committees this year, in addition to posting the annual quota of youths of eighteen, to readjust the present strength of units on this principle. 42. Regulations. The recommendations made by the Inspector-General of the Overseas Forces necessitate considerable revision of the regulations. Amendments arc in course of preparation, and will [shortly be submitted for approval. Revised regulations for the New Zealand Forces Motor Service Corps have been issued. 43. Chaplains. The excellent work performed by Chaplains throughout the year is greatly appreciated both by the Military authorities and the troops themselves. Their duties in annual camps, at the forts when the Coast Defence troops Were mobilized, and in the Expeditionary Force camps were carried out with a zeal and earnestness which undoubtedly proved a large factor in the discipline of the troops. 44. National Reserve. This movement has received a tremendous impetus through the outbreak of War and the consequent creation of a situation the possible results of which it Was designed to meet. From a comparatively small body of enthusiasts Working in the Otago District it has, during the last twelve months, grown into a large organization extending over the whole of the Dominion. As the National Reserve developed it Was found necessary to change the rules and organization upon which the founders Were working in its initial stages, and instructions Were issued early in the year indicating the general lines upon which the Reserve might be worked to the best advantage of the Defence Department. Those instructions defined the object of the Reserve, the manner in which it should be organized and administered, its duties in peace and in time of national emergency, and its relation to the Defence Department. Briefly, the National Reserve consists of those who, though under no obligation for service, still desire to organize and assist in the protection of the Dominion in time of emergency. In order to fit in with the New Zealand Defence scheme, if called up under the terms of the Militia Act, members are organized into platoons, companies, squadrons, batteries, &c, in the area in which they reside. In each military district the affairs of the National Reserve are administered by an executive committee consisting of a President, Vice-President, and ten other members. The Military authorities cannot undertake to drill or train the National Reserve in peace-time, nor can they provide arms or equipment, but they will do all in their power to advise and assist the executive on the lines indicated in the instructions. 45. The Press. I have again to acknowledge the assistance and sympathy extended to the Defence scheme by the Press, and their support during the present emergency.