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14. DEPARTMENTAL DISTRICT SCHOOLS.-The number of the Departmental Schools (outside Victoria College and the Girls' Central School) has been reduced, in the year 1893, from 35 to 24 Schools, by the substitution of Grant-in-Aid Schools for those Government Schools the average attendance of which was persistently at a very low level. The closing of such ineffective but expensive Schools has exercised a stimulating influence on the remaining Government Schools. The Anglo- Chinese Schools at Saiyingpun, Wantsai and Wongnaichung have shown very fair results and are greatly appreciated by the people. But at Stanley and particularly at Yaumati, where the people care more for Chinese than for English teaching, there is but little progress visible. The main difficulties, however, under which all these Schools labour consist in the insufficiency or unsuitability of the accommodation and in the almost total absence of properly trained teachers.

15. GRANT-IN-AID SCHOOLS. For some years past it was felt that the Grant-in-Aid Schools had outgrown in many respects the Code of 1873, revised in 1879 and 1883. An annually increasing demand had arisen for the addition of a seventh standard both in the Chinese and in the English Schools. In the former, there was further also a desire for the addition of Arithmetic (as well as Geography) to the ordinary pensums of a purely Chinese curriculum. In the interest of the English Schools, pressed as they were of late by a growing demand for the teaching of subjects trenching upon the sphere of secondary education, it was deemed necessary to enlarge the scope of the elementary side of the Scheme. It was felt desirable that the gradation from the lowest to the highest standard should be made more even, particularly with regard to Arithmetic and Geography. Elementary science lessons, naturally included in the reading books and in sundry-class subjects of the lower standards, had to be specially included among the examination subjects of the seventh standard. The regula tions concerning special subjects also appeared to require revision so as to enlarge the range of the subjects open for selection whilst limiting the number of subjects to be taken up by each individual scholar. At the same time, however, financial considerations demanded that the increase of expendi- ture, particularly involved in the addition of a seventh standard of the English Schools, should be balanced by a corresponding reduction of the values of passes and of the capitation grants in the case of the comparatively inexpensive Chinese Schools. After due consultation with Managers and Head- masters, I drafted a revised Code, combining the above mentioned points. This new Code of Regula- tions for Educational Grants-in-Aid (1893), having received the approval of the Government (Gazette of 19th August, 1893), will come into force on 1st January, 1894. Elementary education having thus been dealt with, the next step will be the endeavour to promote secondary education, the need for which, though not felt by the mass of the Chinese population at all, presses from year to year more heavily on the resident European families. The practice hitherto obtaining, of sending children for purposes of secondary education to Europe, has of late become a more and more expensive, and in many cases impossible, luxury. Hence the felt need of special provision to be made for the peculiar wants of the education of European children.

16. LOCAL EXAMINATIONS.-The local Examinations held, in Hongkong, for the College of Preceptors, (January, 1893), resulted in a diploma of Association and Membership being granted to a Master of Victoria College (Mr. W. MACHELL). A London Matriculation Examination was also held here (June, 1893), and a certificate has since been issued to the successful candidate (Miss BERGER), an assistant teacher in a local Grant-in-Aid School. The results of the annual Oxford Local Examinations, held in Hongkong in July 1893, were as under:-I. Junior Division.-Honours List, none. Pass List.-Diocesan School, 4 passes; Victoria English School, 4 passes; Victoria College, 3 passes. Candidates who, having exceeded the age of 16 years, satisfied the Examiners,--Diocesan School, 3 passes; Victoria College, 3 passes; Victoria English Girls School, 1 pass. Successful candidates who obtain distinction,-in religious knowledge, Diocesan School, 1; Victoria English School, 1; in English, Diocesan School, 3. Details of examination results of Junior Division: presented 37; examined 32; passed in preliminary subjects, 24; passed in religious knowledge, fully 19, partly 2; passed in English, fully 27, partly 4; passed in mathematics 12; passed in drawing 4. Total of certificates issued to candidates of proper age, 11; to candidates beyond the limit of age, 9. II. Senior Division.-Honours List, none. Pass List,-Victoria College, 4 passes; Diocesan School, 2 passes; High School, 1 pass. Successful candidates who, having exceeded the limit of age (19 years), satisfied the examiners, Victoria College, 3. Successful candidates who obtained distinction- in religious knowledge,-Diocesan School, 1; in English, Diocesan School, 1. Details of examina- tion results of Senior Division:-presented, 14; examined, 14; passed in preliminary subjects, 14; passed in religious knowledge, 4; passed in English, 13; passed in mathematics, 10; passed in natural science, 1. Total of certificates issued to candidates of proper age, 8; to candidates beyond the limit of age, 3. The foregoing results may be summarized thus:-Victoria College, 13 passes, no distinction; Diocesan School, 9 passes and 6 distinctions; Victoria English School, 5 passes and 1 distinction; High School, 1 pass.

17. BELILIOS MEDAL AND PRIZE EXAMINATIONS.--At the annual competitive examinations for Belilios Medals and Prizes (December, 1893), 40 picked scholars from the principal Schools of the Colony entered the lists, viz.-11 European and Chinese boys, 11 European girls and 18 Chinese girls. These scholars represented the élite of the following Schools:-St. Joseph's College, Diocesan School, St. Paul's School, Victoria English School, Italian Convent, Belilios Public School, Berlin