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2. In view of your strong recommendation, and the arguments with which it is supported, I am prepared generally to approve of the adoption of both these proposals.

3. Before, however, any definite steps are taken towards the establishment of either school, I shall be glad to be furnished with further and fuller details of the initial and the annual cost of each school, so far as they can be forescen at present. 4. I think that it will be necessary for the Colonial Government to limit the amount of its building grant in the case of the proposed Chinese Higher School. I am very doubtful whether Government could afford to contribute a sum equal· to or not much below $100,000, if so much were raised by private contributions.

5. You will doubtless also consider and report in due course how the estab- lishment of these two new schools will affect the Queen's College, and whether it will be possible to effect any reduction of the expenditure on the latter school.

6. I observe from the account of the system of education in Hongkong, which has been drawn up by Mr. IRVING for the Board of Education, that there is a school for sons of the troops in the Colony. If this is in any way controlled or supported by the military authorities, I presume that it will cease to exist on the opening of a Government School for European Children. I also assume that the British and American pupils at the Befilios Public School are likely to be trans- ferred to the new school.

7. It is of course understood that the new schools will be placed under the supervision of the Inspector of Schools.

I have the honour to be,

Sir,

Your most obedient, humble Servant,

Governor

Sir HENRY A. BLAKE, G.C.M.G.,

&c.,

&L.,

&c.

J. CHAMBERLAIN.

Appendix B.

GOVERNMENT NOTIFICATION, No. 310.

NEW CODE OF REGULATIONS FOR EDUCATIONAL GRANTS-IN-AID.

1893.

Notice is hereby given to Managers of Schools that the New Code of Regula- tions for Educational Grants-in-Aid, as published below, has been approved by the Right Honourable the Secretary of State for the Colonies on the 27th of June last, to come into force six months after date of this Notification.

By Command,

G. T. M. O'BRIEN, Colonial Secretary.

Colonial Secretary's Office, Hongkong, 12th August, 1893.