288
**
"plague emanates from the ground and is favoured by a long continuance of dry weather when the earth becomes porous and numerous fissures appear on the surface "facilitating the escape of whatever causes the disease." These conditions prevailed to an unusual extent in Hongkong during the 7 months to which I have referred.
28. In this connection I may mention that the Japanese experts who have been sent here to diagnose the disease claim to have discovered the Bacillus of the plague and the medical staff admit the claim.
29. As to the effect of the plague it is felt in every branch of business and the loss to the public revenue, to bankers, merchants, shipping companies, the sugar refining industry, traders, shopkeepers, owners of property and the labouring classes can never be accurately determined. On the whole perhaps the shipping interests are the most affected. At this season the emigrants to the Straits Settle- ments have hitherto been counted by thousands per month, and the movements of passengers up and down the Chinese Coast, to and from Kwangtung and through Hongkong usually amount to vast numbers. Pacific Mail steamers leaving for Vancouver, Honolulu and San Francisco refuse to take Chinese passengers. The English, French, and German Mails refuse to take native passengers and the two latter decline cargo also, or even to enter the limits of the Harbour. Irregular liners avoid calling at the port altogether.
30. Considering the great importance of Hongkong as a shipping port it is only possible to conjecture what is lost by quarantine regulations against her in every direction which drive away vessels from her harbour, and deprive all, down to the humblest labourer, of their proportion of gain from the coaling, victualling, loading and discharging of the immense fleet which ordinarily frequents these waters.
31. Chinese hong merchants have retired to the mainland leaving their premises to caretakers and their commercial engagements in abeyance until the public health shall be restored. The effect of this is much felt by merchants whose merchandize is left on their hands beyond the contract time and many have had to call on their bankers to enable them to tide over the lock up of money. The bankers under such circumstances buy and sell fewer bills and they witness the contraction of all the ramifications of trade in which they have a financial interest. The turn over in sugar and sugar refining is reckoned not by thousands but by millions of dollars, and although happily not suspended it is for the moment crippled for want of labour. Landlords in the affected districts of the City receive no rents, and the natives generally in the midst of all their troubles find their necessary articles of food 30 or even 50 % above the usual price.
32. Without exaggeration I may assert that so far as trade and commerce are concerned the plague has assumed the importance of an unexampled calamity.
33. As to the "arrangements contemplated" I have to inform your Lordship that at a meeting of the Legislative Council on the 12th June, I briefly sketched the methods which the Government intended to pursue with a view of preventing a recurrence of such a catastrophe. I enclose an extract from that speech. The remedy is, as your Lordship will see, a very drastic one. It may result in the destruction and re-building of one tenth part of Hongkong. It will certainly necessitate the extension in every direction of houses fitted for Chinese occupation on improved sanitary principles. It will doubtless cause a general increase in rents, an increase in the cost of living as well as a general increase in the rate of wages. It will also necessitate the increase of the storage capacity of the Tytam Water Works so as to secure an additional supply of about 80,000,000 gallons of water. The expense to the Government of such sweeping alterations and additions it is impossible to estimate. As regards the existing drainage and water works and their completion and extension your Lordship will no doubt consult Mr. COOPER, the Director of Public Works, who is now on leave of absence in England and who can give you the fullest and most reliable information in respect to those subjects.
Enclosure 2.