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2. Since writing your despatch under acknowledgment you will have received my despatch No. 300 of the 12th September last, dealing with the Committee's recommendations. Some of the objections put forward in the Managers' letter are disposed of by that despatch; in particular those numbered III (i) in regard to the principle that may be described as education by race ".

3. Many of the other objections can be best dealt with in framing the new Code and I understand that Mr. IRVING intends to consult the Managers of the Grant-in-Aid Schools before submitting his final draft of the Code to Government.

4. I may add, however, that the arguments urged in paragraph I (e) in favour of maintaining in full the system of payment by the results of the individual examination of each scholar hardly carry conviction to my mind; and I am disposed to think that the present system might with advantage be gradually modified.

I have, &c.,

[No. 161.]

No. 9.

J. CHAMBERLAIN.

Governor to Secretary of State for the Colonies.

GOVERNMENT HOUSE, HONGKONG, 30th March, 1903.

SIR.I have the honour to acknowledge the receipt of your despatch No. 300 of the 12th of September last, on the subject of Education in this Colony.

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3. I enclose for your consideration and approval a statement, in the form of a supplementary estimate, of the expenditure which I have authorised during the current year out of the lump sum of $20,000 voted on the Estimates for improvements in Education. I have included in the statement the salaries of the new masters who have been added to the Department, but a separate vote will be taken in the Legislative Council for their salaries in accordance with your in- structions in Mr. WILLIAMS' case.

4. I share the views which you have expressed on the recommendation of the Committee that children of British parentage should be educated by them- selves and not side by side with children of other nationalities or races, and I have noted your decision in the matter.

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The Inspector of Schools, however, holds such strong opinion on the subject that I enclose copy of a minute of his on this point. In my opinion the difficulty be surmounted by arranging that Chinese boys -hall not be taught English in the same class as non-Chinese boys until it is found that they have acquired a sufficient knowledge of English to understand the teaching given to the Class in that language. This will prevent the English boys being retarded, without violating the principle that education shall be given equally and indiscriminately to all races.

5. Premises have been rented at Yaumati for an Anglo-Chinese School there and the School has been opened under Mr. CURWEN, concerning whose appoint- ment I have already addressed you separately.

Plans and estimate are being prepared for a permanent School with a view to provision being made for it in the Estimates for next year,

6. The Reformatory Ordinance confers on the Magistrate some useful powers in regard to the boarding out of children which can be exercised in the absence of a Reformatory. I would instance sections 5 (concluding portion) and 7 of the Ordinance. I do not think, therefore, that it should be repealed.

7. With reference to paragraphs 7, 8 and 9 of your despatch the recommend- ations of the Committee on Education may, I think, be fairly stated as follows: For the reasons stated in the last para. of their report they advocated that the limited pecuniary assistance which Government is able to render should

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