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of the building and its inmates, and of all the surroundings; to satisfy himself as to the suitableness of all the arrangements in connection with food, clothing, bedding, cleanliness, instruction, &c.; to examine the entries in the visitors' book, the admission record, and other registers since his previous visit; to peruse the correspondence with the children who have been placed out, and with the parents, friends, and others with whom children have been placed, and also with those who may have applied for children; and to confer with the master and matron with regard to any matter out of the ordinary course on which they may want advice. Mr. Macandrew made it a rule that no warrant or license for the placing-out or the discharge of any child should be presented to him for his signature as Superintendent unless previously indorsed by the Honorary Inspector ; and no authority for any extraordinary expenditure on the school was ever sanctioned without the Inspector's recommendation. The same rule has been strictly adhered to by the department in "Wellington, and no warrant or license is submitted to His Excellency for his signature, and no requisition for supplies is sanctioned, unless accompanied with the Honorary Inspector's approval in writing. I venture to recommend, as an additional security, that in future the master of every industrial school be directed to forward with every proposal for the placing-out of any child a statement of particulars, showing the child's age and degree of education, the name, calling, and circumstances of the person in whose charge the child is proposed to be placed, the reasons for the proposal, and the conditions agreed upon as regards the child's school instruction in any case where the required standard of proficiency has not been reached. The Placing-out of Children. It is very difficult to lay down any inflexible rule with regard to the placing-out of the children. It is necessary that each case should be dealt with on its merits. In some instances a boy or a girl is wanted only for service. In such a case the boy or girl must be of sufficient age and strength, and of fair education. The contracting party must engage to pay reasonable wages, and to provide sufficiently for clothing, board, and lodging. The wages are paid to the master of the school, who places the amount, as received, in the Post Office Savings Bank to the credit of the person who earned them. It is understood that all such earnings, with the accumulated interest, will be paid to the young people when they reach majority or settle in life, good conduct being in every case a condition of such payment. Several interesting letters from children who had been placed out at service, from members of the constabulary force, and also from employers, are printed in my report on the school for 1873-74, a copy of which is attached.* A very large number of letters equally interesting and gratifying have since been received by the master of the school. I perused several of these of quite a recent date when on a visit to the school last March. It is no unusual thing for a married couple without children of their own to apply for a young orphan boy or girl with a view to his or her adoption. lam acquainted with some very pleasing cases of this nature. In such cases the children are licensed to the party in terms of the Act, and, if the child should be improperly treated, or if the party's conduct should prove unsatisfactory, the child is recalled to the school. Again, in numerous instances the relations or friends of the children, and sometimes their own parents, make earnest application to have such children intrusted to their care. Many of these applications have to be refused, but not unfrequently they are granted for reasons which are believed to be well founded. I have had many painful interviews with the mothers of children who had been committed to the school, to whose pitiful pleadings for the restoration of their little ones I have been compelled to turn a deaf ear. But even long before the expiry of the term for which the children have been committed it sometimes happens that the conduct of the parents has so much improved, and they express so strong a desire to have their little ones restored to them, that it is deemed advisable to place their children out with them. Of course the children remain under the legal control of the institution, and the parents, knowing this, are put upon their good behaviour, and are usually exceedingly careful to avoid such a course of conduct as would lead to the forfeiture of the custody of the children. It is a fact perfectly well known to the master of the school and myself that instances have occurred of a reformation to all appearance having taken place in the conduct and habits of the parents of children who had been committed to the Industrial School. It might be unsafe to offer any positive opinion as to the cause or causes which may have brought about such reformation. Perhaps the visible improvement effected through the instrumentality of the institution upon the conduct and condition of their children may have exercised a powerful reflex influence upon the parents, even to such an extent as to stir up in them a strong yearning after good, and thus have brought about that amendment of life so manifestly exhibited by them. It is not improbable that the shock produced upon the minds of the parents by the forcible removal of their children from their control may have in some instances contributed towards the results referred to. My report for 1874, already referred to, mentions some instances of this nature. Of course in no case should a child be permitted to remain with its parents or other persons whose conduct is known to be so bad as to render them unfit to have the charge of children. Assistance rendered by Police. The members of the constabulary force have, from the very outset, rendered most valuable service in connection with the school. The master has permission from the Constabulary Department to hold direct communication with the officers in charge of the different police districts with reference to the Industrial School children resident within their bounds. By this means a kindly and quiet watch is kept over a considerable number of the children who arc placed out at service or intrusted to the charge of friends and relatives. I know for certain that a good deal of correspondence goes on between the master of the school and the officers in charge of districts, and that the latter have ever shown themselves most willing to render all the assistance in their power.

* See Otago Provincial Council Votes and Proceedings, Session XXXIII., 1874, jp. 32-39,