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 662 amounted to £12,336,986. follows :—

EDUCATION This sum was made up as

Endowment ..... £156,012 School Board rates .... 2,959,717 Voluntary contributions . . . 812,104 Fees and payment for books. . . 262,135 County Council grants for technical instruction ..... 35,930 Other local sources . . . . 108,107 Government grants, viz :— Annual grants. .... 4,993,115 Fee grant under the Act of 1891 . 2,327,416 Special aid grant to voluntary schools under Act of 1896 . . . 669,772 Science and Art Department. .. 12,678 £12,336,986 Thus it is seen that the contributions from public sources, including the grants from the Treasury and from local taxation, amounted to £11,106,735, out of a total expenditure of £12,336,986. In the near future the contributions of parents and of voluntary subscribers may reasonably be expected to bear a yet smaller proportion to the total expenditure, and public control will in corresponding measure supersede private management. These financial changes have not been without an important influence on the character of elementary education. It should be remembered that the Department does not appoint or dismiss the teachers, nor pay them, nor recognize them as civil servants. The curriculum of instruction is largely in the hands of the local managers, and from the first the main influence of the Education Department has been exercised through its methods of awarding grants to these bodies. In fact, during many years the prime function of the Department was not to direct education or to set up a national system, but to distribute a grant in aid of local effort, and to do this on a graduated system under such conditions as would stimulate improvement and ensure to the nation a good educational return for its expenditure. In this respect the English system has materially differed from more imperative forms of educational administration adopted in other countries. A Boyal Commission of 1853, presided over by the Duke of Newcastle, recommended the adoption of the principle of payment by results in the crudest and most uncompromising form, and Mr Lowe’s Code of 1860 was designed to give effect to that recommendation. He said in effect: “ We do not insist on the adoption of any educational system, but we say if the Voluntary managers will show us certain results we will help them with a grant. Thus if our conditions are not fulfilled, the nation will find the plan economical. If the plan proves not to be economical, it will be very efficient, for the instruction will be worth paying for.” Thus originated the system commonly known as payment by results. The grants were to be proportioned to the efficiency of the school, as determined by the individual examination of the scholars in reading, writing, and arithmetic alone. Later experience has by slow degrees materially modified the application of this principle, and has, indeed, partly discredited the principle itself. The plan of measuring the efficiency of the school solely by the number of scholars who were able to pass the examination led to the adoption by teachers, in many cases, of merely mechanical methods, designed rather to secure the maximum number of passes than to cultivate the intelligence of the scholars or to subserve the higher purposes of school discipline and training. Mr Forster, in 1870, was one of the first to see the inadequacy of the system, and in the Code of that year he added grants

for history, grammar, science, and other humanizing subjects. Subsequently special grants were made for discipline and organization; and in 1881 Mr Mundella sought to enlarge the curriculum by permitting a wider option of additional scientific subjects and otherwise, by encouraging for the first time the Frobelian system of training and manual exercise in the infant classes; and by the introduction of a supplementary “ Merit Grant,” carefully graduated and designed to recognize and reward any form of excellence in discipline or organization or general intelligence which was not capable of measurement by the results of individual examination as tabulated in a schedule of “ passes.” A second Royal Commission of 1887, presided over by Lord Cross, was instituted to inquire into the operation of the Elementary Education Acts, and in its final report declared its opinion “That the distribution of the Parliamentary grant cannot be wholly freed from its present dependence on the results of examination without the risk of incurring graver evils than those which it is sought to cure. Nor can we believe that Parliament will continue to make so large an annual grant as that which now appears in the Education Estimates without in some way satisfying itself that the quality of the education given justifies the expenditure. Nevertheless we are unanimously of opinion that the present system of payment by results is carried too far and is too rigidly applied, and that it ought to be modified and relaxed in the interests equally of the scholars, of the teachers, and of education itself.” Accordingly, the Commissioners proceeded to recommend some modifications of the plan by -yvhich the amount of the grant payable to schools was at that time awarded; e.g., that there should be a fixed grant of 10s. per scholar, and a variable grant of not less than the same amount, dependent partly on the results of individual examination and partly on various conditions hitherto recognizable for the purpose under the name of the “ Merit Grant,” the principle of which they sought to retain, though under a slightly altered form. These were moral training, order, obedience, general intelligence, and right classification. The Commission added, however, that in distributing the variable grant special stress should be laid upon proficiency in elementary subjects. These recommendations were substantially enforced by subsequent changes made during the Vice-Presidencies of Sir W. Hart Dyke and Mr Arthur Acland. Later experience, however, has led the Education Department to abandon altogether the attempt to graduate the grant according to the degrees of efficiency in the schools. In place of testing the proficiency of individual scholars, there is to be one summary estimate of the work of the school; in place of an annual examination, occasional inspection without notice; in place of a variable, grant dependent on a report in detail on the several subjects of instruction and on particular educational merits and defects, one block grant payable to all schools alike. This grant is fixed at either 17s. or 16s. per head in infant schools or classes, and at either 22s. or 21s. for older children; the gain or loss of one shilling being the only difference recognized between the best schools and those which are not so bad as to justify the withholding of the grant altogether. It is hardly to be expected that this arrangement will be regarded as the final solution of the problem. It may possibly have the effect of reproducing the state of things which provoked the censure of the Duke of Newcastle’s Commission of 1853, and which led to the novel and somewhat drastic expedient of determining the amount of the grant solely on the results of individual examination of scholars. Various expedients have been suggested for neutralizing the effect of so large a relaxation of the conditions by which it has been hitherto sought to secure accuracy and thoroughness in teaching. Among these, two have already been referred to as having been adopted in