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5. In anticipation of the early transfer to Victoria College, several changes were made at the beginning of 1888. The school fees were, with the permission of His Excellency the Governor, raised from 12 dollars per annum, to 24 dollars for Class I. and 18 dollars for Classes II. and III. The whole Upper School was also exempted from the study of Chinese, to afford them opportunity for the preparation of the extra class subjects. To suit the arrangement of the new building, the style of the classes was altered throughout the school, as instead of eleven classes, there will be five classes sub- divided into three sections, while the three upper classes will consist of two sections each. In com- parative reference to past years this is liable to cause confusion, in the table therefore supplied to the Inspector of Schools, I have put a parallel column, containing the old numbers of the same classes.

STAFF.

6. In June last, the School suffered a severe loss through the sudden death from heart disease of the Second Master, Mr. ALEXANDER FALCONER, who had nearly completed twenty years of service. With a natural aptitude for the duties of his profession, aided by zealous application to such studies as should render his services the more valuable to the school, Mr. FALCONER had become a model Second Master. By his skilful and patient treatment of the various characters of his scholars Chinese and others, and by his devotion of time and labour to further the interests of the school, he afforded a sterling though unpretentious example to junior masters. Of his relations to myself I can speak in the heartiest terms, and his loyalty to the late Head Master, Dr. STEWART, is well known in the Colony. The term professor is not so generally used in English as in American schools, otherwise Mr. FALCONER might have accurately been termed the Professor of English Grammar and Composition, for his skill in imparting these subjects was unapproachable, and it will naturally take some time for his place to be, in this respect, adequately filled. An In Memoriam article in the China Review bears testimony to his scholarship.

7. Mr. A. J. MAY, Senior Assistant Master, was appointed Second Master, and application was made to fill up the vacant Assistant Mastership. As however the new master has not yet arrived we have, as above stated, been for over six months shorthanded.

8. The staff of masters has sustained its established character for thoroughness and activity. The facts connected with each case justify me in particularising three masters.

Mr. JAMESON SUC- ceeded in raising the boys of Class IIIA to such a degree, that in spite of their coming from lower classes than usual, and having extra subjects on their time-table, 100 p.c. passed intelligently. Mr. LUK-KING-FO obtained from Class V. (VII. last year) as good results as were obtained from Class V. last year, the examination papers in Arithmetic and Grammar being of very much the same standard. Mr. CHEUNG TSOI a pupil teacher, Acting Assistant, not only maintained good discipline in a class of 73 boys, but paid such judicious attention to the dull and idle boys, that his results in Reading, Dictation and Arithmetic were admirable.

CAMBRIDGE LOCAL EXAMINATIONS.

9. In December, 1887, we sent up six Junior candidates, four of these passed, viz.: WONG FAN, ABDOOL HOOSEN, HO MAN-YING and WAN TSUNG-IU, the two last being over the age of 17 could not receive University Certificates, but have been provided by the Local Committee with statements of their success in the Examination as recorded in the Tables published by the Syndicate. By private advice from the Secretary to the Syndicate, I am informed that WONG FAN was placed in the higher division of the Pass List and received the mark distinguished for Algebra and Geography, HOOSEN obtaining the same mark for Arithmetic. Of our two Senior candidates one failed badly, the other CHEUNG TSOI was again checked in Scripture, passing in Old Testament, but failing in the Gospel.

OXFORD LOCAL EXAMINATIONS.

10. This examination was held in the Colony for the first time in July last. I introduced it as an experiment to afford our Pupil Teachers the opportunity of obtaining the quasi-degree of Associate in Arts. Six candidates were presented for the Senior examination. Three obtained certificates; WONG FAN, aged 16, and FRANCISCO HYNDMAN, aged 17, were declared Associates in Arts of the University of Oxford, but CHEUNG TSOI the third candidate being over 19 was not eligible for this further dis- tinction. We therefore now have two Pupil Teachers, shortly to become Chinese Assistants in the College, whose attainments have received the imprimatur of Oxford University.

11. To Victoria College, consisting of boys many of whom are older than is usually the case in schools, considerable advantages are offered by the Oxford practice which is to give pass certificates irrespective of age, to all candidates who satisfy the Examiners appointed by the Delegates; reserving on the other hand all distinctions to such as pass before they attain a certain limit of age, 16 for Juniors and 19 for Seniors. It is moreover interesting to observe from the results obtained by WONG FAN and CHEUNG TSor in both examinations that the standard of the Oxford and Cambridge Local Exami- nations is identical; and further that the standard of excellence at this school corresponds with both, for CHEUNG TSOI was Morrison Scholar in 1887; WONG FAN in 1888; and ABDOOL HOOSEN, with HYNDMAN as proxime accessit, in 1889.