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be devoted in much larger measure to Anglo-Chinese than to Vernacular Schools. They recognised that the existing Vernacular Schools could not be disestablished. They proposed therefore to endeavour to improve such of them as were capable of improvement and to utilise them where possible as Preparatory Schools for some of the Anglo-Chinese Schools, but they apparently did not con- template assisting any new Vernacular Schools.

I agree in the view which you seem to hold that Government assistance should not be withheld from Vernacular Education, and after very careful consideration I am of opinion that it will be better to keep the Vernacular Schools quite distinct from the Anglo-Chinese Schools and not to provide for the teaching of English in them. At the same time I consider that every endeavour should be made to improve the Vernacular Schools especially in their method of teaching the Chinese language. Chinese text books by the use of which the children may at the same time acquire some Western knowledge should also be introduced in them. The Committee have laid stress on the fact that it is essential that students should have a good working knowledge of their own language.

8. The principles which should, therefore, be laid down as those on which educational work will be carried on are, in my opinion, the following, and I may say that they commend themselves to all those interested in Education in the Colony :-

1. Government to continue to support Vernacular Schools provided they attain a reasonable standard of efficiency. The method of teach- ing the Chinese language in these schools to be improved, and Western knowledge spread by the use of Chinese text books written in that behalf.

2. No English to be taught in Vernacular Schools.

3. No candidate to be admitted to a Government Anglo-Chinese School, that is a school in which Chinese study English, until he passes an examination in the Chinese language. The Educational ladder in Hongkong will then he graded as follows:-

1. English Schools, which are divided into :-

(a.) Seventh Standard Schools.

(b.) Lower Standard Schools.

By English Schools is meant (1) Schools in which non-Chinese Scholars are getting an English education; (2) Schools in which Chinese boys are getting an English and Chinese education; (3) Schools in which both these classes of scholars are studying side by side. Note.-It is to be understood that Chinese boys in English Schools must be instructed in the Chinese language.

2. Vernacular Schools which are likewise divided into :—

(a.) Seventh Standard Schools.

(b.) Lower Standard Schools.

In the new Code which I shall forward in a short time the distinction between Seventh Standard and Lower Standard Schools is marked by a higher grant to those which can teach the Seventh Standard, since it is generally recognised that save in exceptional cases, when, for instance, a Chinese educated abroad is employed, it requires an English Master to teach that Standard. There are two Vernacular Grant Schools at present which employ English teachers though it is not likely that this class of School will increase in numbers.

9. Regarding the appointment of a Normal Master the question is under the consideration of the Governing Body of the Queen's College.

10. The Governing Body of the Queen's College is also considering the ques- tion of the restoration of the Chinese Classes in the College. The matter is one that presents no little difficulty if the teaching of the Chinese language is to be con- ducted on rational principles. I shall report further on this matter when I have received recommendations of the Governing Body. I note your decision that when the Headmastership of the College falls vacant the College shall be placed under the Inspector of Schools.

11. As regards the re-establishment of a Hongkong Scholarship I am of opinion that in view of the enormous demand among the Chinese for education in

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