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11. At the end of last year there remained 74 males and 2 females undergoing sentences of penal servitude, a decrease of 18 on the previous year. 12. During the last year 463 males and 47 females were acquitted or discharged after remands, as against 389 males and 51 females in the previous year, an increase of 74 males and a decrease of 4 females. 13. From the figures given under Table B it will be seen that the prisoners were maintained last year at a gross cost per head of £47 18s. 3d., as against £45 Is. 7d., and at a net cost of £30 15s. 4d., as against £27 18s. 10d, in 1898. The gross totals are made up as follows : Staff supervision, £31 ss. Bd., as against £28 14s. 5d.; maintenance, £13 ss. 5d., as against £12 15s. lid; and incidentals, £3 7s. 2d., as against £3 11s. 3d. This increase in the gross cost per head is accounted for by the large decrease in the daily average number of prisoners. The cause is supplemented by an increase in the price of provisions, with a corresponding increase in the price of necessaries ; while the staff supervision is increased in consequence of the classification pay scheme introduced on the Ist January, 1899. Of the incidentals £405 2s. 6d. is recouped to the Government—viz., Railway Department, £304 11s. 6d.; and Post and Telegraph, £100 11s. 14. As regards the educational attainments of prisoners, a reference to Table C shows that, out of a total of 3,163 males and 611 females received during the year, 32 males and 3 females were of superior education, 2,764 males and 522 females were able to read and write, 81 males and 32 females could read only, whilst 286 males and 54 females could neither read nor write. It must be recollected that in this calculation the same individual, appears several times over. 15. It is interesting to notice from Table F that a comparison of the previously convicted prisoners sentenced during the past year with those sentenced five years ago—viz., 1895 —shows in those once convicted an increase of 47 males, with a decrease of 13 females; in those twice convicted, an increase of 2 males, with a decrease of 2 females; and in those thrice or oftener convicted, an increase of 159 males, with a decrease of 10 females. In making this calculation the same individual appears several times. It is believed that these reconvictions would be considerably reduced if every prisoner were provided with a separate cell (except perhaps in special, cases, where, on medical grounds, it may be expedient to have the prisoners in association, but any such are exceptional cases), but owing to want of accommodation it is at present impossible to carry out the cellular system. It is generally admitted by those well versed in criminal matters that the surest way of stamping out vagrancy and larrikinism is to place such offenders in cells by themselves; and the same remark is applicable to the hardened criminal, who is only too glad to get hold of a student in criminal art who is younger and less experienced than himself. .16. It is often stated, by those probably who have not sufficiently studied the matter, that our prisons are neither deterrent nor reformatory; but against any such argument it must be recollected that for many years past we have had a steadily increasing population, with a steady decrease in the percentage of prisoners to population,- which still continues, notwithstanding the drawbacks of want of accommodation, and a very much larger decrease in this percentage would be found if a stop were put to sending persons who are in no way criminals, or have not been guilty of any crime, to prisons for medical treatment. It is much to be regretted that those persons who so freely give their opinions on the treatment of the prisoners in the colony do not take the trouble to visit the prisons and see for themselves. No restrictions are placed on any such visitors ; on the contrary, the officials are only too willing to show them round and give information. 17. A reference to Table D shows that four children under ten years of age were confined in the smaller or police gaols of the colony during the past year, while there were no such infants imprisoned in 1898. In those aged from ten to fifteen years there were 36, as against 38 in 1898, while in those aged from fifteen to twenty years there were 273, as against 225 in the previous year, a total increase of 50 in those under twenty years of age. 18. In dealing with these youthful offenders a uniform system of diet, discipline, and punishment is adopted in all the prisons, and the younger ones are kept entirely separate and are never brought into contact with the older prisoners ; but to properly isolate these juvenile offenders more cell-accommodation is required in the larger prisons. The four infants referred to as under ten years of age were detained for the night when on transit to an industrial school, but I am of ■opinion that keeping children in such places even for twelve hours is a grave mistake. 19. A reference to Table X shows that there was a decrease of 47 prison punishments—viz., 200, as against 247 in 1898. Of these, 190 were minor punishments inflicted by the Visiting Justices, while 10 were more serious or aggravated prison offences, and after first being investigated by Visiting Justices were adjudicated upon in open Court, Many of the Gaolers were somewhat dubious as to how this system of taking aggravated prison offenders to open Court would work out when it was introduced in 1883, but all now agree that in was a step in the right direction, and has considerably strengthened their positions. 20. The prisoners at the three centres and Lyttelton have during the past year, as usual, been principally employed, under the Public Works Department, on works in connection with the fortifications, and good progress has been made. In Auckland, the grounds at Government House and around the Supreme and Stipendiary Magistrate's Courts have been kept in order by the prisoners, and good progress has been made with the new prison building, the second wing being now well on towards completion. It is hoped that as soon as this wing can be occupied, all that remains of the old wooden building will be swept away. At New Plymouth the boundarywall is well on, and should be completed during the year. At Napier the principal work has been the cutting of a monument to those killed in the floods, which is almost finished, and is being erected on the Esplanade. For this work Warder P. McNamara, who has had supervision,