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7. On the evening of the 1st April, Mr. MAY returned and reported to me that the contractor's inen had stopped work and come away, so he had left two Indian police and two Chinese in charge of the sheds in course of erection and the materials. I disapproved of leaving any armed men in Chinese territory and directed him to withdraw them. He said that he had promised the villagers to return, and would go himself and withdraw them, feeling that possibly an explanation with the people, when their tempers had time to cool, would settle matters without further trouble.

8. Accordingly, early on Monday morning, the 3rd instant, he proceeded to Tái pó Hü, calling at Kowloon en roule and taking with him five Chinese soldiers to whom, under the instructions of the Viceroy, was to be handed over the protec- tion of the matshed and the workmen. Additional soldiers were to be sent on as soon as they had arrived from Canton. Mr. MAY took with him six unarmed Sikh police, merely a formal escort as is usual in China. At 12 midnight I received a pencilled note in Mr. MAY's pocket book, brought by one of the Chinese who had been left at the matshed, in which he said that he was attacked by a mob and would hold the matshed until morning, but urgently required relief. I requested Major- General GASCOIGNE to send a Force to relieve him, and at 3.30 a.m. Major-General GASCOIGNE proceeded himself in Her Majesty's ship Whiting, accompanied by Mr. STEWART LOCKHART, and taking with him 100 men of the Royal Welch Fusiliers. Of the two matsheds partially erected they found one burnt, but the principal one was untouched. The people informed them that Mr. MAY and his party had left for Hongkong, so they returned. In the forenoon Mr. MAY returned and reported that be and his party had been assailed with stones and other missiles, and seeing, after 9 o'clock, that signals were being shown and drums beat indicating a general concentration of villagers, he retreated over the hill, and remained con- cealed until morning, seeing, as he thought, both matsheds on fire. He heard a general advance upon the hill, upon which he had first taken up his position. He reported that the Chinese soldiers sent in with him had behaved very well.

9. I immediately telegraphed to Her Majesty's Consul at Canton as follows:--

"Thank Viceroy for prompt orders to Kowloon. Inform His Excellency that British official and men with five Chinese soldiers were attacked this evening at Tái pó Hü. Ain sending a Force to relieve them and remove them leaving protection of property to Chinese Government. Request Viceroy to order sufficient Force to be sent without delay to preserve order and fully protect workers. A considerable Force will be necessary. I have directed the relieving Force now proceeding in one of Her Majesty's ships not to do more than relieve British subjects, except they are attacked."

I telegraphed again on the 5th as follows:---

"Inform Viceroy troops not yet arrived, neither has San On Magis- trate issued Viceroy's proclamation. The names of ringleaders Monday's attack given Kowloon authority but instructions from Viceroy to San On Magistrate to arrest guilty parties necessary. Please request that instruc- tions be given.'

10. In response to those telegrams, I was informed that 600 soldiers had been sent into the leased area to preserve order. Immediately after the occurrence I considered the position in Executive Council and decided not to take over the ter- ritory until the 17th as the occurrence seemed to be nothing more than a sudden affray, and as the Viceroy had accepted all the responsibility and undertaken to afford protection, the contractor could go on and re-construct the nutsheds. The contractor resumed work and finished the matsheds on the 14th instant sufficiently to enable them to be occupied.

11. On the 7th instant, I issued a proclamation in Chinese* a copy of which I annex, and published a notice in the Gazette that I would take over the Territory in accordance with Her Majesty's Order-in-Council. On the 17th, I also informed the Viceroy through Her Majesty's Consul. By general desire the day was pro- claimed a public holiday and large numbers of the inhabitants of Hongkong of all classes intended to be present.

12. All this time Mr. STEWART LOCKHART was assured by Chinese, to whom he looked for information, that the people were all anxious that we should take over the Territory, the gentry alone being autagonistic.

* Already printed.

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