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During 1903 additional regulations under the Manual and Technical Instruction Act were gazetted by which provision was made far the free tuition of students who had obtained the proficiency certificate of Standard VI., on condition of their making at least twenty attendances at each of two classes (one of which required to be English of a standard higher than that for Standard VI.) during the year. It was thought advisable to put these regulations into operation only to a limited extent, as the additional capitation given on account of such students was less than the amount of the fees which they would have had to pay as ordinary students. It was hoped, however, that the attendance at the free classes would be so far in advance of what has hitherto been the case that the revenue would not materially suffer. Consequently the continuation classes were thrown open to students under these regulations, but the technical-class students paid the ordinary fees. The result did not realise expectations. The English, mathematics, book-keeping, and shorthand classes benefited by an increased number of students, the number being, 40, 13, 40, and 36 respectively, as against 13, 0, 32, and 10 for the preceding year. But, owing to a misunderstanding of the conditions, several students, while they attended the English class regularly, failed to make a sufficient number of attendances in their other subjects to entitle them to earn any additional capitation. To the credit of these students, be it said, however, that when appealed to, they nearly all paid as a fee a sum equal to the amount of capitation payable on their account had they attended the minimum number of times. Now that the regulations are better understood both by teachers and students, the Junior Technical Scholarship scheme is worthy of being extended and thoroughly tested. It is therefore proposed to make the technical as well as the continuation classes free next session, and then a, definite pronouncement can be made on the financial position as gauged by actual results. Of the utility and value of the scheme itself, there can be no question. It is a splendid idea, and worthy of hearty support,, to give those who have passed the proficiency examination and who have to go out to work, an opportunity to continue their education for two or four years by allowing them to attend free evening classes. . When the Technical School buildings are completed, it would be worth the Board's while to take into consideration the question whether technical day classes might not be established. If fifty pupils who have gained the proficiency certificate came to the Technical Day School instead of remaining on in Standard VII. at the primary school, there would be obtained for each student an average capitation of about £13. This would represent a total income of £650. With this sum a sufficient staff of competent teachers could be paid. The staff required would be, say, one teacher for English, mathematics, and commercial subjects at £250; one assistant at £150, competent to take shorthand and typewriting; one teacher of domestic economy and cookery at £50; one woodwork instructor at £50; and one art teacher at £50. These last three teachers would also act as instructors to the primary-school pupils. This would leave a sum of £100 for maintenance, &c. Such a school could, I feel assured, be successfully established and maintained. At the present time there are sixty-seven pupils remaining in Standard VII. in the three town schools alone, and there would be no difficulty in pupils from Invercargill North, Waikiwi, Waihopai, Tisbury, and Clifton Schools attending. In the meantime, unless these pupils-pass the proficiency examination before they are fourteen years of age, they are debarred from attending the High School. At the Technical School, age would be no bar to admission. The matter is worthy of the most careful consideration. Already other centres have decided on this course, and so may Invercargill. Manual Instruction in Schools. In my report last year, after dealing with the rapid extension of hand-and-eye work in the schools in this district, I said that I hoped the position reached would be maintained. I am pleased to be able to report that not only has the position been maintained but the work has been considerably extended. The number of schools in which handwork was taught in 1903 was seventy-three, and the number of children under instruction in manual subjects was 6,218. This year, the numbers are ninety-four and 6,518 respectively, not including advanced needlework pupils. This result has been brought about through the operation of three causes—first, the teachers themselves are now realising the value of hand-and-eye training as a means of stimulating and quickening the reasoning faculties of their charges; second, the Inspectors never miss the opportunity of impressing upon teachers the desirability of introducing handwork into the schools; and third, the new syllabus, while not making manual training in the schools compulsory, gives encouragement to teachers to introduce this branch of education into their curriculum, and to carry it on in some form or other from the infant department to Standard VII. From the number of applications that have been received this year, it is safe to assume that handwork is being greatly extended throughout the district, not only in an increased number of schools but also in the higher standards of nearly all the schools. Considerable attention has been given to a selection of manual subjects suitable to the schools of this district, and teachers have been generally advised to confine their attention to the following lending subjects: — For P-S2, paper-folding and plasticine-modelling; for S3 and S4, carton-work and brush drawing: for S5, S6, and S7, cardboard-work and brush drawing. In Invercargill and at Gore, while there exist fully equipped cookery and woodwork rooms, the pupils in S5, S6, and S7 are encouraged to take cookery and woodwork instead of cardboard-modelling and brushwork. In many schools other occupations are introduced by way of change into the infant divisions, sucli is stick-laying, brick-laying, paper cutting and mounting, drawing in crayons, &c. The reasons for the selection of the above course are briefly : Paper-folding, carton-work, cardboard-modelling, and woodwork develop the mechanical, while modelling and brush drawing develop the artistic side of the pupil's nature. Paper-folding is an easy and perfect introduction to geometrical forms; carton-work and cardboard-modelling, introducing as they do the use of the rule, the ]<nife, and the compasses, develop still further the foundation laid in the paper-folding class;