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charge of special members of the staff. Inasmuch as many of them without strict supervision would undoubtedly abscond on the first opportunity, and as it is desirable to avoid as far as possible the use of cells or corporal punishment, there is being erected for them a spacious yard, with a shed for wet weather, in which a large part of their work can be done. They will, however, attend school at special times, and will be taught trades in the same way as the others. They cannot receive either pocket-money or wages, but may be promoted into the second class if they show continued good conduct and are diligent in learning their trade. The boys in the second class, which will receive most of those committed, will be in another part of the institution. They will be under less strict control, but will get just as full instruction. They may be paid small sums as rewards for good conduct and. diligence, and may in like manner earn promotion into the first class. The latter will not be placed in the institution itself, but will be quartered in rooms attached to the houses of married attendants, not more than six or eight in each house. As to the control exercised over them, boys in the first class will be placed to a large extent on their honour, the chief penalty for an offence being degradation to a lower class. They may not only receive pocket-money, but, when their work is worth more than the cost of their maintenance, their earnings may be paid into the Post-Office Savings-Bank in the same way as the earnings of those whe are licensed to service outside the school. Boys from this class who have proved themselves trustworthy will be licensed out to employers when suitable opportunities occur. The trades now being taught at Burnham are the various branches of farming, including ploughing, reaping, the care of stock, dairy-work ; poultry- and bee-keeping ; gardening, including orchard culture; carpentry ; bootmaking and rough saddlery; with some knowledge of ironwork and farriery. All these are now in operation. At Te Oranga a start, at present unambitious in character, has been made in the direction of securing somewhat similar treatment for the reformatory girls. It may not be out of place to note, with regret, the reluctance that seems to exist, not more perhaps in New Zealand than elsewhere, to sending girls to industrial schools at a sufficiently early age to give reasonable hope of success. The direct consequence of such neglect is the swelling of the number of young girls who either find their way into reformatories or corrective institutions, or, far more frequently, enter the ranks of vice, and tend to bring down the general social standard. There are many girls who, if taken in time, could be trained to habits of morality and diligence, and would become respectable wives and mothers, whose only sin has been neglect by their parents and the community, and who yet are practically lost to society. The corruption of the best is the worst form of corruption, and the indication of the evil ought to be sufficient to counteract the weakly sentiment of reluctance to deal with such cases in due time. Te Oranga was originally built for a private residence, with 9 acres of land attached. A new dormitory has been added, and another wing, to accommodate twenty-four girls, is in course of erection. In order that the classification may be as complete as that referred to in connection with Burnham, it will be necessary in course of time to add a third wing. The training given will be largely domestic and industrial, and the management will be, generally speaking, on the lines already indicated for Burnham. The form that industrial-school wbrk proper takes is widely different, the chief distinction being that whereas no inmates of reformatories are presumably fit subjects to be boarded out, but must be kept in the institutions until they can be licensed to service or friends, or be discharged, in the case of the Government industrial schools (as distinguished from reformatories) only 15 per cent, of the so-called " inmates" are actually in residence, while 46 - 5 per cent, are boarded out, 6-3 per cent, are with friends, and 276 per cent, are at service. The boarding-out system, whereby the care of the foster-home is substituted for the parental care the unfortunate children have lost, or have never had, is in my judgment, on the whole, a marked success. Some homes are from time to time found to be unsuitable, and children have to be removed from them ; but, notwithstanding, in the great majority of cases the foster-parents exerise proper care and control, and often affection springs up between foster-parent and child, so that the latter finds a true home in the house in which it has been placed. The minority resident in the schools are such as, while they cannot be said to be vicious or criminally disposed, need firm discipline and systematic training. There are now four Government industrial schools in addition to the two reformatories, the two receiving-homes established last year at Wellington and Ghristchurch having been gazetted as industrial schools at the beginning of the present year (1901). The receiving-homes, as explained in last year's report, are intended primarily for the temporary accommodation of children committed to industrial schools (but not of reformatory cases) and of industrial-school girls who have left the service of one employer and are waiting for another situation. Nearly all those on their books at any time will therefore be non-resident, and, accordingly, one important purpose to be served by these homes is that children may be boarded out or licensed out to service in the districts to which they belong without having to be transferred from one part of the colony to another. When the scheme now being worked out is complete there will be the two industrial schools for girls, as now, at Mount Albert, near Auckland, and at Caversham, Dunedin; these will also serve as receiving-homes for girls and young boys. The boys' buildings at Gaversham have long been condemned, and the buildings about to be erected at Horowhenua will give the opportunity for the removal of the boys thither. The removal will have many other advantages, as on the extensive area surrounding the new site there will be ample scope for training the boys in rural occupations, and the district between Wellington and New Plymouth is one in which there will no doubt be numerous openings for boys on dairy farms and in other employments.