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Annual Report Form. A new system of annual reporting on officers was brought into use during the year. The new form of personal report was designed with a view to obtaining a more uniform standard. Descriptive words and phrases replaced the system of marking by numbers. The simplicity of the new form is one of its greatest advantages ; it can be prepared quickly as well as efficiently. No doubt modification and slight alteration will have to be introduced when the result of the new system is known, as the form at the present stage is more or less of an experiment and constitutes almost wholly a departure from the practice of many years. APPEAL BOARD. The Post and Telegraph Appeal Board, under the chairmanship of Mr. E. C. Cutten, the senior Stipendiary Magistrate at Auckland, sat on two occasions during the year. Six hundred and fifty-five appeals, lodged by 314- officers, were heard. Twenty officers were successful in winning their appeals. The remaining appeals were disallowed or were withdrawn. The large increase in the appeals for the year is attributable to the quinquennial regrading of the Service. The greater number of the appeals dealt with were those arising from promotions as a result of reclassification, while a number were classification appeals lodged by officers in an endeavour to establish a higher grading for the positions held by them. Sittings of the Board were held in Auckland, Wanganui, Palmerston North, Napier, Wellington, Christchurch, Timaru, and Dunedin. This proved an economical measure in minimizing expense and reducing the length of absence of officers from their stations. Travelling as it did, the Board was in many cases given the advantage of having within easy call many of the controlling officers who, by their knowledge, were able to explain in evidence some of the more obscure points and generally bring about enlightenment that would otherwise have been more difficult to obtain. The work of the Board, owing to the volume, was of a more strenuous and exacting nature than is usual, but it was handled expeditiously and a careful hearing was accorded each case. It has been suggested that some change in the working and constitution of the Board should be made, but at the moment it cannot be seen that a change is either necessary or expedient. The Board, as at present constituted, has borne the test of time and meets all the requirements of the Service in the best way. Being judicial in effect and free from any administrative functions, the Board is set in the best possible position. Service representation together with departmental representation and an independent Chairman —a Magistrate —are not easily improved upon. SUGGESTIONS BOARD. The Department encourages officers to make suggestions for improving the working of the Department. The response is most gratifying. The number of suggestions received during the year was 425, and, in the case of seventeen of these, awards totalling £56 10s. were made. In every case officers are commended or thanked for the interest displayed, and informed by communications addressed to them personally of the decision arrived at on the suggestion. In the case of suggestions which are declined reasons are given when this seems necessary. DEPARTMENTAL CORRESPONDENCE SCHOOL. No fewer than 1,411 officers enrolled during the year in the Departmental Correspondence School, as compared with 1,280 last year. Before an officer can progress far in the Service he is required to furnish evidence of his efficiency by passing a departmental examination, and at a later stage an examination aimed at testing an officer's suitability for promotion to a controlling position requires to be passed. The school provides tuition by correspondence for officers in the subjects which they are required to take in their examinations. Twenty-one separate instructional courses are available to officers. The staff of the school comprises an instructor and twelve assistants. The cost in salaries of the staff is considerable, while the fees charged for tuition arq nominal —10s. to £2 25., according to the nature of the fruition desired —but the Department is convinced that the cost is more than counterbalanced by the increased efficiency of officers generally. EXAMINATIONS. The number of officers who entered for departmental efficiency examinations held during the year was 2,328. The candidates who were either wholly or partially successful numbered 1,146. ESTABLISHMENT OF COMMERCIAL BRANCH. An important step in the history of the Department has been taken during the year by the setting up of a Commercial Branch. At the outset the activities of the new branch are being directed principally to establishing personal contact with existing and prospective telephone-exchange subscribers, the objects being to ensure that telephone-users obtain the class of service most suited to their individual requirements, and to promote a healthy and well-balanced development of the service. In the past the Department's activities have been largely conducted upon the " ordertaking " system. Under the new scheme this method will be supplemented by a specialized system of salesmanship. When it is remembered that during the last five years the capital value of telephoneexchange plant and equipment has increased from £5,097,939 to approximately £7,912,000, and that during last year working-expenses, depreciation, and interest on capital value amounted to approximately £1,190,000, it will be realized that the continuance of this important service as a self-supporting unit of the Department is dependent very largely upon the application of progressive and businesslike methods.