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stitution should be modified by giving a larger voice than hitherto to the professors, who are in reality the persons chiefly responsible for the maintenance of a high standard of academic work. A Bill having this object in view will shortly be introduced for the consideration of honourable members. When the Act of last session and the proposals in the Bill already submitted to Parliament are in full operation the increases will amount under the former to £41,000, and under the latter to £62,000—a total of £103,000. A further increase of £47,000 will have to be provided when the powers of the Act of 1908 regarding regulations for increases of staff are fully availed of, making a grand total of £150,000. Special Schools. It was announced in the last Financial Statement that works were to be set in hand at Otekaike immediately to enable girls to be received there for the present, and at the same time to increase the limited accommodation for boys. Unexpected difficulties have, however, been encountered with regard to the clearing of the site for the new buildings ; but these have now been overcome, and it is anticipated that the erection of the additional cottage homes required will be commenced almost at once, and that some, if not all, of the buildings will be available for occupation at the beginning of next year. Medical Inspection and Physical Education. The work of the Medical Inspectors was, unfortunately, interrupted for a part of the year by the urgent necessity of diverting their services for some months to the task of stamping out the epidemic of smallpox, which seriously threatened the children attending Native schools in the North Island. Although the number of Medical Inspectors at present employed is insufficient to completely carry out the plan the Department has set before it, enough has been done to show the great value to the Dominion of the medical inspection of schools and school-children. The number of schools visited during the year was 333 ; the number of children examined was 12,307. Courses of lectures on medical inspection and school hygiene were also given to teachers and to students in the training colleges. Most of the defects discovered could be cured by medical or dental treatment, wh : ch it is generally within the power of parents to secure. Many of them, it may safely be said, will be cured, in some cases altogether prevented, by the spread of sound physical education. Good progress has been made in the establishment of the new system of physical training in schools. The result of the work up to date (July, 1914) is that over 2,200 teachers have been trained ; the system has been introduced into 1,172 schools, and the work in 531 of these schools has been inspected. The system is now in operation amongst 80,000 children. The actual expenditure to the 31st March last was £8,092, or about £2,860 below the estimate. TOURIST AND HEALTH RESORTS. In spite of the smallpox epidemic and the consequent check to both local and Australian tourist traffic during the early part of the season, it is satisfctory to note that the revenue derived by the Tourist Department showed a small increase over the previous year. A new and thoroughly equipped hostel has been erected at Mount Cook, greatly increasing the accommodation, and it is anticipated that there will be a corresponding increase of traffic at this resort in consequence. It is intended this year to make extensive additions to the hostel at Waitomo Caves. The present accommodation has proved inadequate to meet the increasing popularity of this resort. The Rotorua bath-buildings have been equipped with thoroughly up-to-date medical apparatusjfpurchased by the Balneologist, who recently visited English and Continental spas for the purpose of studying advanced methods of treatment. The system of booking tourists throughout New Zealand has proved most successful, and the year just passed shows a substantial increase in the business,