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instance, to include in the pensum of the Chinese Schools in Class I, which have hitherto been purely Chinese Schools, the teaching of Arithmetic as a Special Subject. There is also a desire, on the part of Managers and Teachers of English Schools, to have certain useful subjects included among the Special Subjects, such as Mensuration, Trigonometry, Freehand Drawing, etc., for which the present Scheme makes no allowance. As regards Building Grants also an alteration has been made in the Rules but not yet included in the Scheme. But all the revision that appears desirable affects only minor details and leaves untouched the leading features of our Grant-in-Aid Scheme, which year by year continues to demonstrate its effectiveness by the increasing soundness and uniformity which is gradually pervading our whole educational system, and in the quiet power which it exercises in the direction of counteracting whatever drawbacks attend the local working of the Cambridge Local Exa- mination system, the healthful stimulus of which continues to produce good results.

18. As regards the other classes of Grant-in-Aid Schools, viz. those which give a European edu- cation, the results of the Annual Examinations are detailed in the Tables appended to this Report, and there are but a few general observations to be added. The unusual amount of sickness, which prevailed throughout the year, affected these Schools also, by diminishing regularity of attendance and conse- quently the quality of the results obtained at the examinations. Nevertheless the Boys Schools did, on the whole, very good work, and several Schools specially distinguished themselves this year by the uniformly excellent results obtained in both ordinary and special subjects. But the Girls Schools appear to be losing ground. Only one Girls School (Victoria English School) attempted special subjects (Algebra and Physical Geography) in the year 1888, whilst the Boys Schools are steadily progressing in this matter, both as regards the thoroughness of the teaching given and the shape of fresh variations judiciously introduced, in which respect the Grammatical Analysis and Book-keeping exercises of St. Joseph's College and the Animal Physiology papers of the Diocesan School stood out most prominently as meritorious examples.

19. The Needle-work Examination produced satisfactory results in the year 1888. Whilst the needle-work of the Italian Convent School stood hitherto unrivalled in neatness and artistic beauty of its work, there are now several other Schools which are coming pretty near the standard of the Convent School, even with respect to Chinese domestic needle-work. There is however some danger, in the commercial value which the needle-work that is being done in some Girls Schools has, viz., the danger of giving too much time to needle-work, such as pays the School directly, at the expense of the less remunerative training of the mind which benefits the scholar. There is indeed no necessity for Girls Schools to take up any Special Subjects such as Algebra, Astronomy, etc., but neither is there any good reason why girls should fail to master Vulgar and Decimal Fractions, and I would rather see less time given to embroidery and similar fancy needle-work and a little more attention paid to the ordinary subjects of the Grant-in-Aid Scheme.

20. I enclose the usual Tables (I. to XVI.), containing the Educational Statistics for the year 1888.

I have the honour to be,

The Honourable F. STEWART, LL.D.,

Colonial Secretary.

Sir,

Your most obedient Servant,

E. J. EITEL, M.A., PH. D.,

Inspector of Schools.