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rapidly discarded in favour of oral instruction, and New Zealand has accordingly been saved the expense and inconvenience of changing from inferior systems of deaf-mute education to that which is now almost universally admitted to be the best. Those called (improperly) semi-mutes, who possess in some degree the sense of hearing and have to a slight extent the power of articulation, need special treatment; such cases appear to be most successfully dealt with when they are boarded out with hearing people in the neighbourhood of the institution, and are taught in special classes. There are also some pupils that hitherto have escaped notice, and are now too old to live among children or to receive instruction with them. Where it is still possible to do something to relieve their affliction, and to educate them, these cases may be admitted; but such individuals also should be boarded out, and should be taught in special classes. It does not, however, appear fair that the cost of maintenance, apart from that of instruction, should be borne by the Education Department. If their friends cannot afford to maintain them, their maintenance at the institution is really a relief to the rates, and in cases where, say, the inmate is over twenty-one the cost should presumably be borne by the Charitable Aid Boards. Three boys and 3 girls left the school during the year (4 after the close of the school year), and 6 boys and 4 girls were admitted. At the end of the year the number in residence was 28 boys and 21 girls, 3 boys and 1 girl more than at the end of 1900. The expenditure on the institution for the year 1901 was, — Salaries of Director and teachers, £1,384 14s. 3d.; steward, matron, and servants, £529 os. lOd.; rent, £178 6s. 3d.; housekeeping, £681 2s. lid.; travellingexpenses, £116 10s. 3d.; school material, £51 4s. Id.; repairs and works, £42 4s. 9d.; clothing, £13 Bs. 3d.; medical attendance and medicine, £31 2s. 9d.; water-supply, £30 Bs.; sanitation, £20 Is.; boarding-out of pupils, £104 3s. Bd.; for the preparation of plans of the new buildings, £61 2s. Bd. ; extension of water-service, £79 Bs. 7d.; sundries, £50 17s. Id.: total expenditure, £3,267 2s. Bd. Deducting recoveries, £170 Is. 9d. (parents' contributions), the net expenditure was £3,097 os. lid. The amount expended in 1900, was £5,243 16s. 9d., of which £2,233 16s. 9d. was paid to complete the purchase of the new site. Two deaf-mute children who, from having received partial training on the manual or sign system, were ineligible for admission to our own institution were maintained in the Victorian School for the Deaf, at a cost of £30 18s. 6d.; and one was under a private teacher in Auckland, to whom a fee of £26 was paid by the Department.

No. 2. Repoet op the Director. Sir, — Institution for Deaf-mutes, Sumner, 17th April, 1902. I have the honour to report that the progress of the pupils during the year 1901 was on a par with that of former years, and was satisfactory throughout the school, save in the case of one young beginner, whose vocal organization is defective and whose constitution is physically weak. The gathering of scholars outnumbered that of all previous years, amounting as it did to fiftyone during the first and to fifty-two during the latter half of the year. To this total the South Island contributed thirty-five and the North Island eighteen. Two pupils came from Riverton, one from Invercargill, one from Gore, one from Balclutha, one from Pembroke, one from Roxburgh, one from Lawrence, one from Green Island, seven from Dunedin and suburbs, one from Warring- • ton, one from Timaru, one from Temuka, one from Methven, one from Geraldine, two from Halswell, one from Bennett's, three from Christchurch, two from Lyttelton, one from Sumner, one from Hokifcika, one from Kumara, one from Greymouth, two from Poxhill, two from Wellington, one from Martinborough, one from Masterton, two from Lower Hutt, one from Eoxton, one from Hastings, one from Wairoa, one from Stratford, one from New Plymouth, one from Onehunga, two from Auckland, one from Wairangi, two from Upper Waiwera, one from Puhoi.

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