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the pupils, bears little relation to the average attendance for the district. Take one item alone —■ cost of inspection. If all the pupils of the district were collected into a few large schools, I could examine with ease three times as many pupils, while the Board's income would be increased nearly threefold. Other items in the cost of administration would not be increased by the increased number of pupils. It must therefore be evident that the principle of paying the Board's expenses on the average attendance is arbitrary and unfair. While every care has been taken that the units of the teaching profession should have the " living wage " one heard so much about, the same consideration has not been shown to Boards. The principle that might have been adopted— a graduated scale of payments—is acknowledged by the Department in the payment of teachers' salaries (the smaller the school the larger the increment of salary per unit of attendance), and by the Boards in their payments to Committees for local administration, but is ignored in the payments to Boards for administration. The newer schools are well lighted, well ventilated, and in every way suitable for carrying on school work. Many of the older buildings, however, are far from satisfactory. They are too small, too low, poorly ventilated, and badly lit. The Board has each year done what it can to improve and enlarge these buildings, but the grant is utterly inadequate for the purpose. No private owner of property would allow buildings to depreciate, owing to lack of painting and lack of general attention, as our schools are depreciating. The interiors of many have never been painted, and one is struck by the utterly dismal appearance of the room as one enters, and pities the unfortunate children who, for five hours a day, have to remain in such depressing surroundings. Even the new infant-room at Stratford had to remain unpainted owing to lack of funds. Many of the porches are far too small, and others are mere shells, unlined and unpainted, and in a few cases the schools themselves have not been lined. Twenty-two schools are without residences, and a teacher has frequently the greatest difficulty in securing accommodation of even the poorest description. One teacher used to sleep in the school porch. An attempt was made to provide a cheap residence by making the school a little longer and partitioning off' about 13 ft. as a residence, but the result has not been satisfactory. There are still four schools like this— Matau, Tarata, Whangamomona, and Ratapiko—and they are not included in the twenty-two that are mentioned as being without residences. In one of the above " residences " there is living a teacher with five or six children. Again, last year a teacher made additions to his residence, and another built a residence, on the condition that the amount was to be refunded out of the next building grant. It is decidedly infra dignitatem that the Board should be placed in the position of having to receive from teachers advances on the building grant in order to meet the requirements for residences. Quite a number of the residences require enlarging and renovating. In a number of schools the desks are so broken and shaky that satisfactory clerical work is almost impossible. Additions are urgently needed in a number of schools, and the Central School is very crowded. In two cases halls are hired to ease the pressure. At the West Infants, before the hall was used, there were seventy infants in a room 22 ft. by 22 ft., and in a number of schools there are extra desks almost up to the doors, and there is no " floor space "at all. Though the Department has recognised the needs of the district, and has considerably increased the building grant, even with the increase the amount is insufficient to meet the most urgent of present requirements, and had the last grant been doubled many necessary works would have to be left untouched. The sixty-six schools open at the end of the year may be classified in respect of efficiency as follows : Good to excellent, 19; satisfactory, 22 ; fair, 11; moderate or inferior, 14. The schools are classified according to educational progress rather than according to examination results, and the terms " good," &c, indicate the estimate of the skill displayed by the teaching staff in the work of instruction. By " satisfactory "is meant that, while the results are not good, the work is what may be termed "of average quality," or that under the circumstances much better work could not be expected. By " fair " is meant that there is room for considerable improvement. The inferior schools range in size from small schools to schools with an average attendance of about a hundred, and the teachers display little aptitude for their profession, or are in other ways unsatisfactory. At the time of writing five of the teachers in the schools classed as inferior have resigned or have been removed. Reading, I am pleased to say, shows very satisfactory progress, and in very few schools is such a thing as " sing song " reading heard. In previous reports I have indicated the methods by which I consider reading should be taught, and last year I again referred to them. Spelling in the special test is satisfactory, but, as I have before said, is often very weak in the general work, though far from so weak as formerly. Writing is generally satisfactory, and—l say it in fear and trembling — compare favourably with that of other districts, if one can judge by the copybooks and exercise-books one sees. Much of the work in the examination papers and in the exercise-books is very neat, and the work is neatly arranged and set out intelligently. Composition, though leaving room for improvement, shows steady progress. In Standard 111., and often in Standard IV., it is very satisfactory ; while that in Standards V. and VI. does not show the advance on the work of the lower classes that is desirable. The satisfactory character of the work in Standard 111. is undoubtedly due to the good oral training the pupils receive from the time they enter the preparatory class. As I have on a former occasion said, the simple colloquial errors are eradicated before Standard 111. is reached, and such expressions as " I done it," "He seen it," are very rarely heard in school. Arithmetic, as indicated by the test cards, is generally satisfactory, and the method of treatment shows a steady increase in intelligence. Mental arithmetic remains poor. In class-subjects the work in seventeen schools was from good to excellent, in thirteen satisfactory, in twelve fair, in thirteen moderate, and in ten was inferior. General geography was, as a rule, satisfactorily taught, and in quite a number of cases excellent memory maps of New Zealand were sent in. Physical geography and mathematical geography still leave much to be desired. The old system of drawing I hope to see disappear soon, or become only a part, and a