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into consideration all the opposing circumstances to which I have referred. I have endea- voured to fulfil my promises to avoid all "harassing and embarrassing" legislation, and to effect economy. The fulfilment of the former will be recognised in the way in which the Estimate of Revenue for 1898 has been framed, and of the latter in the retrenchment which has been generally effected throughout the Service. I think it right, however, to state that, in my opinion, certain posts in the Civil Service are insufficiently paid, especially when compared with similar appointments in other Colonies. I trust it will be possible to remedy this defect, and thus retain in Hongkong the services of experienced officers who might otherwise accept a transfer to Colonies where they would be more highly remunerated,

While on this subject I desire to avail myself of this opportunity to acknowledge the great assistance I have received during my Government from all branches of the Civil Service, and to express my appreciation of the loyal manner in which they have co-operated with me in furthering the interests of the Colony.

I have every reason to adhere to my confidence in the resources of Hongkong and its financial soundness. A handsome advance has been secured on the price at present paid for the Opium Farm, and I wish I could look forward with equal certainty to a rise in the sterling value of the dollar.

As regards the events of the year, with one exception to which I shall refer later, there is but little to record. The Captain Superintendent of Police, reports a period of compara- tive peace. There are, however, two noteworthy items of " Police news" to which I may refer. The first is the placing of District Watchmen on Police beats under the supervision of Europeans between the hours of 6 p.m. and 6 a.m., thus re-inforcing the Police by forty auxiliaries of a very useful stamp.

The arrangement has so far worked satisfactorily, and it is hoped that the additional protection thus afforded will tend to reduce the number of armed gang robberies, which are only too frequent in the winter months. The other innovation is the withdrawal of the Night Pass and Light Regulations. Night Passes were first introduced in 1857, when, no doubt, good reasons existed for such a stringent measure. In this present year of grace, however, such restrictions cannot but be regarded as a relic of a barbarous past and incon- sistent, in these enlightened times, with the liberty of the subject. Results, have justified the repeal of these Regulations, and I am sure the relief has been fully appreciated by the respectable Chinese.

And here, I must refer with great regret to the grave irregularities which have recently been shown to exist in the Police Force and in other Departments of the Government Service amongst the subordinate officers.

You are aware of the action taken by the Government in this matter, and I believe that it has been guided to a proper course. I fear there can be no doubt that these irregularities have been in existence for very many years That they have now been brought to light, and that stringent measures have been taken to put an end to them must ultimately conduce to a better state of things in the future.

As regards the Public Health, I can give you an exceptionally favourable report, which may, to some extent, compensate for the large amount of Sanitary Legislation which has of late years fallen upon us.

There have been only 17 cases of Plague during the year, several

of which are said to have been imported from the mainland. This is very satisfactory when it is remembered that the disease was prevalent in the neighbouring ports of Amoy and Swatow, and in the island of Formosa for several months. The comparative immunity from Plague enjoyed by Hongkong during 1897 may be due to the improved sanitary condition of the Colony and the increased vigilance of the Sanitary Board.

The death rate of the British and Foreign community for the first 9 months of the year is 21.5 per thousand as compared with 23.6 for the corresponding period of 1891, whilst the death rate amongst the Chinese community for the like periods has been reduced from 26.9 per 1,000 to 18.9 per 1,000. This represents an annual saving of nearly 2,000 Chinese lives and about 17 European.

The main drainage has been, practically, completely re-modelled. Thirty-six miles of sewers have been laid, not including the drains constructed in connection with the re-drainage

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