(MONEY Magazine) – 7:46 a.m.: The mother's face tightens into a fist: "It isn't fair! The other kid started the trouble with my boy yesterday." The mother nearly shouts the words into the face of the principal of P.S. 34 on Manhattan's Lower East Side, a neighborhood dominated by public housing high-rises. "You gotta stop it," the mother insists. "He picks on my boy every morning." Instinctively, the principal, Virginia Hutchinson, grasps the root of the problem. She steps into the hall outside the cafeteria she entered a moment ago and quickly spots the tormentor. The bill of the boy's green baseball cap sits snugly over his right ear, and he's holding hands with his sister, a second-grader. Both are sucking their thumbs. Just as Hutchinson suspected, the boy--a kindergartner like the angry mother's son--is being dropped off early and left to cause trouble in the halls. Under school policy, all kindergartners must be escorted to school by an adult and cannot be left there before 8:40 a.m.; that's when New York City teachers, under their union contract, go to work. Hutchinson's day is off to a troubled start; she makes a note to call the offending family that afternoon.

Welcome to urban public education, circa 1996, where dedicated principals, including Virginia Hutchinson, have much of the responsibility of stopping the chaos of the streets from crashing into their classrooms but too little authority to always get the job done. Under the New York schools' union work rules and bureaucratic custom, for example, principals do not have sole control over their custodians, security guards, guidance counselors, special-education teachers and lunchroom workers. Worse, perhaps, they cannot hire and fire teachers and clerical support staff without major union hassles that can stretch on for years.

So to be effective, a principal like Hutchinson, who makes only $69,000, must be psychologist and police officer as much as educator and administrator. And this morning the trim, energetic Hutchinson, 48, has taken on yet another role. She's tour guide to MONEY's managing editor, who has volunteered to be "Principal for a Day" as part of a two-year-old city program to enhance ties between schools and business. She and the editor have decided to help the students create a magazine to celebrate P.S. 34's Peace Day on May 30, the culmination of the faculty's own two-year effort to teach the kids to resolve conflicts without fighting. In this increasingly violent country, where some children as young as nine carry box cutters rather than pencil boxes, that may be the most valuable lesson they ever learn.

8:05 a.m.: Hutchinson is walking her guest through her typical day, which begins at 7 a.m. with an hour of paperwork and scrambling to cover any teacher absences. Then at 8, she personally supervises the arrival of her 426 students--86% Hispanic, 10% black, 2% Asian, 2% white. "Since the teachers don't go to work till 8:40," she says, "the principal and the assistant principal have to greet the kids and get them fed--except because of budget cuts, I don't have an assistant principal."

Because the entire student body is below the national poverty index, all the kids are eligible for a full breakfast and lunch paid for by the federal government. Usually around 90% of the kids show up for breakfast, as Hutchinson looks on.

Suddenly, a boy bursts out of the cafeteria. He sits down on the floor and pulls his knees up against his scowling face. Hutchinson kneels next to him and slowly gets the story.

"That was a breakthrough," she says later. "Another boy called him stupid, but he left the room instead of fighting. That's one of the things we are teaching with conflict resolution--how to walk away when someone calls you a name."

She's especially happy her teachers are reaching this boy. "A few weeks ago, he attacked a male administrator in a fury--even picked up a heavy chair and threw it," she says. "His foster parents say he's making progress, and he is. But he's also getting bigger and stronger and learning how to channel his rage at a victim. I worry about him really hurting somebody some day."

The boy is a third-grader.

9:33 a.m.: The sixth-graders in Harriett Sattenberg's class are reciting the essays and poems they wrote about Peace Day. The class' Peace Pledge includes this thought: "We will discuss things if we disagree. I will listen to you, and you will listen to me."

9:38 a.m.: This next class is bordering on bedlam. Only half the kids chime in on the ritual greeting--"Good morning, Miss Hutchinson"--which is usually delivered in polished unison by students who have obviously been trained to read together from their earliest grades. The other half are talking among themselves, and three appear to be walking about aimlessly. The teacher shrugs, "It's been one of those mornings."

Hutchinson isn't buying it. Out in the hall, she says, "That's one of the two teachers I'm trying to get rid of. But it's not easy." With union intervention, it can take three years to get a demonstrably inadequate teacher off a staff. Even then, the teacher often simply gets transferred to another school, where chances are the new principal starts the process starts all over again.

"Dealing with problems that incompetent teachers create is the most time-consuming part of my job," says Hutchinson, "partly because of endless teacher disciplinary hearings."

10:02 a.m.: Walking toward the next class, Hutchinson praises the overall dedication of her 26 teachers, but adds that more needs to be accomplished. Around 33% of P.S. 34's students are reading or doing math at their grade level, well below the roughly 50% mark of elementary kids citywide. "Our mission is to get our kids to perform at the highest level because they are capable of doing it," Hutchinson says. "We are teaching less by rote, relating to the kids more as individuals and raising their expectations about what they can achieve."

10:17 a.m.: Entering this third-grade classroom, Hutchinson asks whether the students were paying attention to the morning's public address announcement. "This is today's special guest," she says. "Do you know who he is?" A sweet-faced girl in the first row shoots her arm straight up but then sees that only two other classmates have their hands in the air. Her confident smile drains away, and her hand darts down. But the guest walks over to her, saying: "You know who I am." She smiles shyly but says nothing. The guest leans over and says softly: "Just say it in my ear." The girl whispers so low even he can barely hear her: "You're principal for the day." "Of course I am," the guest says, addressing the entire class. "And you knew it all along."

Again, back out in the hall, Hutchinson says: "We're trying to teach self-esteem, which can be tough, especially if the children are dealing with problems outside that could easily overwhelm an adult." The obvious goes unsaid: The troubles of the home and these rough neighborhood streets stalk the school every day, making the always challenging job of educating children all the more difficult.

10:40 a.m.: Hutchinson is sitting down for the first time in three hours in her sparsely furnished office, sharing a coffee break with her custodian, Richard Gorgolione, 35. She likes Richie, as she calls him. Walking around the school you can see why. Behind its wire-grated security windows, the 41-year-old school has 25 well-maintained classrooms, as well as a full auditorium, gymnasium and cafeteria. "Your custodian," says Hutchinson, "is your best friend or your worst nightmare." She adds that the custodians primarily report to a district plant manager. "So if you have a bad custodian," she says, "you're stuck with a dirty school and maybe even a hazardous one."

Hutchinson has always been impressed by Richie's work ethic. She recalls, in particular, his heroics during this January's 20-inch blizzard that paralyzed New York City--but not P.S. 34. "I knew from the weather reports that a big one was coming," says Richie, "so I dug out of my driveway early Sunday night and drove in." When the snow stopped, the school was ready to open. "Where did I sleep?" he adds with a laugh. "In my office, of course."

But Richie has some news. He has just been assigned to maintain a nearby junior high in addition to P.S. 34. In essence, his workload has been doubled with little or no extra help. Hutchinson is understanding. Yet there is no way around the fact that her building's best friend will be spending hours a day at another school. And there's nothing she can do about it.

11:06 a.m.: Today the 13 eight- to 10-year-olds in the special-education class are preparing for a trip to the Museum of Natural History by learning the differences between a plain, a plateau, a hill and a mountain. "What is bigger than a hill?" the teacher wants to know. "A mountain is bigger than a hill," comes the class' singsong reply.

Heading down the hall to another class, Hutchinson has kind words for the teacher, but adds: "The frustration is that for a variety of reasons involving union rules and pure incompetence, she's the fourth teacher those kids have had this year."

12 p.m.: Hutchinson and her teachers have chosen two students from each of the grades, kindergarten through sixth, to work with librarian Lea Prendergast to create the Peace Day magazine. This is their first meeting. Prendergast quickly gets the delighted students settled at two tables and outlines the project. All these students, including the five-year-old kindergartners, will be asked to write a story or poem explaining what Peace Day means to them. They also will invite every student in school to submit stories, drawings or photos. Then, after they have chosen the best material and edited it, they will spend a day at Money working with the staff to produce their magazine. In the end, 500 copies will be published at MONEY's expense, enough for everyone at P.S. 34.

After a brief debate, the students decide to name their magazine Harmony. Writing the main cover headline, however, proves trickier. The choices slowly narrow to three: "Peace vs. Violence," "Peace Beats Violence" and "Peaceful Day, Amazing Day!" But no clear consensus emerges. Finally, someone blurts out: "Peace Rules!" Bingo! Everyone smiles.

1:15 p.m.: Over a lunch of ham on white bread, cold fries and milk back in Hutchinson's office, the conversation turns to money and resources. P.S. 34's average class size (about 25), pupil/teacher ratio (16 to 1) and spending per pupil (roughly $6,300) compares favorably to urban public schools around the country, assuming you don't count these kids' special disadvantages.

"Sure, I'd like more than the $350,000 I have under my direct control," says Hutchinson. "And I'm very concerned about the projected 15% budget cut people are talking about for next year. But right now I believe there's money you can tap in the system if you are resourceful." She's particularly proud, for example, of securing funding for two reading teachers and a librarian by sharpening her school's core curriculum and making it a magnet to attract a more balanced racial mix. And of getting $50,000 worth of excellent reading material last year for only $12,000 because the publisher was being acquired. Nonetheless, she adds pointedly: "There's still waste in the system; you can't deny that."

"If you had to choose," she is asked, "which would you want: more money or more freedom from union rules?"

"That very question came up at a big administrators' lunch a couple of months ago," she says. "The overwhelming preference was freedom from union rules."

1:23 p.m.: A New York City police officer, a school security guard and a veteran teacher are in Hutchinson's office with one of her students. Although the girl's makeup and bold red lipstick make her look much older than 12, the police spotted her as a trespasser inside a nearby junior high school. That is a serious infraction. Experience has shown that outsiders are often looking for a fight, sex or drugs. The street-savvy Hutchinson rules out fighting in this case because the girl's hair is combed out in a fluffy style: "Girls fight with their hair in a tight bun so no one can pull it."

Between loud sniffles, the girl says she was just walking her older cousin to the junior high, a story that flounders on the fact that she was caught inside the school at around 10 a.m.

The girl's teacher is deeply disappointed. "Remember how many times we've talked about making your own choices and not following others who might lead you astray," the teacher says. "You didn't do that this time. And now you have to pay."

Hutchinson arranges for the girl to see the school's guidance counselor, who visits twice a week. She also makes a note to call the girl's parents.

2:55 p.m.: With Hutchinson supervising, the teachers at P.S. 34 dismiss their classes from the schoolyard. One by one, mothers, fathers, grandparents, siblings and others come to pick up the younger kids. Hutchinson glances over at a school door 30 yards away. "That door doesn't look locked to me," she calls out. Sure enough, the door was left ajar, probably unintentionally but perhaps not. A student slams it shut.

The chaperoned daily dismissal is one more reminder, if any is needed, that one of the principal's foremost responsibilities is protecting her students from the streets.

The day's other message is that public school principals all across the nation are being asked to educate students with neither the budgets nor the power to do that efficiently. How effective could any leaders be when they have restricted resources as well as limited authority over their most important workers (the teachers) and even less over key support staffers (the custodians, security guards, guidance counselors and special-education teachers)? No amount of dedication can compensate for such an absence of essentials. Could you run a business that way? And more to the point, should we be asking our principals to run our public schools that way?

3:10 p.m.: Dismissal is going smoothly, a quiet end of a routine day leading up to Peace Day. Hutchinson turns, and suddenly she's face to face with a mother who's even angrier than the one who started her day eight hours earlier in the cafeteria. The mother has an official-looking yellow slip in one hand and her daughter--the shy girl who whispered to the special guest--in the other. The mother says she never gave the school permission to allow a doctor to examine her daughter's eyes; in fact, she would never allow anyone to examine her daughter. Hutchinson tries to explain that the eye exams are mandated by the state; no parental permission is needed. The principal adds that the family is not required to buy glasses from the state even if the doctor says her daughter's eyesight isn't perfect. But the mother doesn't seem to be listening. With her finger jabbing in Hutchinson's face, she keeps repeating that she never wants anyone to examine her child, who is now staring at the ground. After the mother storms off, pulling her daughter along with her, Hutchinson says, "Some people never want doctors to see their kids."

4:15 p.m.: Hutchinson's day isn't over. She's got an hour of paperwork ahead before she can head home. She picks up a stack of papers she plans to hand out to her teachers the next morning and groans. She had asked one of her clerks to punch in holes so the pages could be fastened into reports. "Look at this," she says. The holes got punched in--but down the right-hand side of the pages. Then she laughs out loud. "That's what you have to do when you're a principal," she says. "You've got to laugh--and keep going."