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of the next lower grade (151 to 200) is altogether inadequate. This glaring anomaly should at once be removed by a substantial increase being made to the salary attached to the last-mentioned position. The salary schedule claims to be a graduated scale of payments, but this example alone shows that it is far from perfect in this respect and a remedy should at once be applied, otherwise it is certain that the service will suffer. Scholarships.—On the 16th December last and following days the annual examination for scholarships was held. In all, 42 candidates were present, 17 being reckoned as belonging to the town, and 25 as belonging to the country. Of those sitting for the examination, 14—all of whom were country candidates—made over 60 per cent, of the total marks obtainable, to the first 7 of whom non-resident scholarships, tenable for two years, and of the annual value of £35 were awarded—the percentage of marks gained ranging from 75 to 65. For the examination for two extension scholarships there were four candidates. The Inspectors express the opinion that the indifferent quality of the work done by the town candidates is no doubt the natural consequence of the withdrawal of an incentive to work by the institution of free places in the secondary schools, and of the diverting of pupils' attention from scholarship subjects to handwork and physical and military drill, and suggest that handwork, in the form of drawing, should be substituted for history in this examination. During the now current year a revision of the scholarship regulations is contemplated. This is necessary in view of the anomaly produced by the separate regulations for "free-place " candidates and scholarship-holders for admission to the high schools. It is reasonable to suppose that.all winners of scholarships (the age being under fourteen) would be entitled to " free places " at the high school, and in respect of their attendance the High Schools Board would be entitled to claim from the Department capitation grant at the rate of £6 per annum. This being so, it is evident that the board could greatly extend the advantages Which the possession of a scholarship confers were its successful candidates admitted to free places in the secondary school. There were at the end of the year seventeen scholarship-holders, in respect of whom a sum of £170 per annum was paid to the High School Board as tuition fees. Were all these admitted to " free places," a sum ultimately sufficient to make provision for four or five extra country scholarships would be set free. The amount paid to scholarship-holders for the year, inclusive of tuition fees, was £534 55., the expenses of the examination amounting to £17 3s. 9d. District High Schools. —In this district, under the regulations issued in the year 1902, district high schools have been constituted at Gore, Riverton, and Winton respectively. In the first-mentioned district the experiment has been eminently successful. During the year as many as seventy-two pupils have been in attendance in the secondary department. At Riverton, while the success achieved has not been so pronounced, there were thirty-six secondary pupils on the roll at the close of the year. At Winton, however, the attendance so far has not been sufficient to justify the expenditure incurred in making the appointment of a qualified special assistant for secondary work. Though the District High School Regulations make fairly liberal provision for the support of such institutions, it is only by numbers that financial success can be secured. This statement is well illustrated by the fact that at Gore the available funds are ample, with a small surplus, to enable the Board to provide for payment of an efficient staff of special assistants for purely secondary work; while at Winton, owing partly to sparseness of population, and partly, no doubt, to its proximity to Invercargill, adequate provision cannot be made from the special revenue available for the efficient staffing of the secondary department. Moreover, it appears that the regulation governing district high schools makes no provision for utilising the surplus which may arise from the working of one district high school to meet the deficiency arising from limited attendance at another school of the same class. From this cause, the Boards ordinary finance suffered during the last two years to the extent of £54 16s. Id. The Board sees no reason why the general principle—the strong assisting the weak—which has governed the administration of the education system since its inception, should not also control the financial administration of district high schools. Manual and Technical Instruction.—lt is unnecessary that any lengthy reference should here be made to the work of manual and technical instruction as carried on under the Board's control, seeing that the Director of Technical Instruction will furnish a special report dealing with this subject. It will be sufficient to state that substantial progress has been made during the year in the various forms of work introduced under the provisions of the Manual and Technical Instruction Act and Regulations, and that the financial results of the year's operations, as shown in the Director's balance-sheet, have been quite satisfactory. In the early part of the year the Board undertook the erection of the first section of the proposed new Technical School—rooms for cookery and woodwork classes—at a cost of £557, such amount being received from the Government as a first instalment of the special vote promised for this purpose. The completion of the building will be amongst the most important works to be undertaken during the coming year. Sewing, Teaching of. —Taking advantage of the provisions of section 26 (e) of regulations made under the Manual and Technical Instruction Acts of 1900 and 1902, the Board early in the year made arrangements for the teaching of sewing in all schools where the average attendance did not exceed forty by the appointment of a sewing-mistress in cases where the school was in charge of a male teacher. Though in most instances the amount of fees to be earned (10s. per pupil in average attendance per annum) was not very enticing, still the Board succeeded in securing the services of fairly competent instructors for nearly all the positions advertised. There were during the year forty-three sewing-teachers employed, and to these the sum of £215 10s. 9d. was paid by

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