Private schools were very prosperous in Shanghai during the Republican period. Shanghai Municipal Educational Bureau adopted a pattern of indirect management, especially attaching importance to normalizing and guiding the mechanism for operating a school by taking the basic measures for the registration administration. Meanwhile, appropriate funding was given to private school so that they could enjoy fair treatment and full confidence. What was more, necessary interventions were made on finances and running a school. Indirect model of managing many private schools dramatically reduced the financial burden on Shanghai municipal public education. It also provided an important prerequisite for urban educational administration to concentrate on macro management system.