It is a curious fact that the use of mussels from our western rivers is one cause for the decadence of the Panama pearl industry. For years the actual expense of maintaining these fisheries was met by the sale of the shell for use in making buttons and mother-of-pearl ornaments. The pearls represented the profit of the enterprise, which was always therefore more or less of a gamble--but a game in which it was impossible to lose, though the winnings might be great or small according to luck. Now that the demand for pearl oyster shells has fallen off, owing to the competition of mussels, the chances in the game are rather against the player and the sport languishes. [Illustration: THE GOVERNMENT SCHOOL OF HAT MAKING] [Illustration: BEGINNING A PANAMA HAT] The authorities of the Republic are making some effort to establish a system of industrial schools which may lead to the fuller utilization of the natural resources of the country. Every tourist who visits the Isthmus is immediately taught by one who has been there a day or two longer than he that Panama hats are not made in Panama. This seems to be the most precious information that anyone on the Zone has to impart. Most of the hats there sold are indeed made in Ecuador and the name “Panama” was first attached to them years ago, because their chief market was found in Panama City, whence they were distributed to more northern countries. The palm of which they are made however grows generally in Panama and the government has established in the Chiriqui province a school in which native boys are taught the art of hat making. In the National Institute at Panama City there is also a government trades school where boys are given a three years’ course in the elements of the carpenters’ and machinists’ trades. Indeed the rulers of the Republic, which was so abruptly created, deserve great credit for the steps they are taking for the creation of a general system of public education, both literary and practical. The school system is not yet on a par with that of states of longer existence, nor will it in all probability ever quite conform to more northern ideas of an educational establishment. For example, the National Institute is closed to girls, who for their higher education are limited to the schools maintained by the church. A normal school, however, in which girls are prepared for teaching in the primary grades is maintained with about 125 students. The school system of Panama must be regarded merely as a nucleus from which a larger organism may grow. Yet when one recalls the state of society which has resulted from revolutions in other Central American states, one is impelled to a certain admiration for the promptitude with which the men who erected the Republic of Panama gave thought to the educational needs of people. They were suddenly put in authority over an infant state which had no debt, but, on the contrary, possessed a