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plague infected provinces. A few hours bring these people to Hongkong and nothing short of a ten days' detention of from two to three thousand persons who daily enter Hongkong would insure freedom from the introduction of plague by these visitors, while even if all are healthy there must be among them a propor- tion of susceptibles to feed the fuel on the appearance of plague.
9. One of the most important questions of the immediate future is the problem of reducing the surface population, the density of which in one health district of Victoria is, in round numbers, six hundred and forty thousand to the square mile, and this in a city crowded under the precipitous northern slope of the Peak range of bills that effectually shut off the south-easterly breezes of the summer mouths. The abatement of surface crowding by the resumption of houses and opening of streets and lanes will probably cost some millions of dollars, as the value of house property in Victoria is very great, houses being sold at from six dollars to thirty- five dollars a square foot; but the taxation of Hongkong is light compared with that of other Colonies, and sooner or later the question of the abatement of surface overcrowding must be vigorously dealt with.
10. The state of the New Territory taken over in 1899 has been fully dealt with in my despatch No. 304 of the 12th of last August. The Financial Accounts of this lately occupied concession afford no reliable basis for an estimate of its ulti- mate value. Up to the present we have been engaged upon making a good main road that will give ready access to the interior of the Territory, in building Police Stations and in preparing a cadastral survey, without which, arrangements cannot be made for the payment of Crown Rent and the settlement of land claims, after which I expect to see a rapid development of that portion of the district surround- ing the harbour of Hongkong where the taking over of the Territory has increased the value of land, in some instances literally a thousand-fold, but over every acre of which disputed claims await adjustment by the Land Court. The police ex- pense of the New Territory is also a heavy item, as armed robbery on land and sea is a very common offence, and our preventive patrol system is costly as compared with the somewhat drastic Chinese system of disregarding those local irre- gularities until they become intolerable, when a force is sent to punish the district by eating it out, or, if necessary, destroying a village or villages. Beyond affording protection and bringing home to the people the fairness and justice of the British system of government nothing can be done in the New Territory until the land claims have seen settled. When that has been done, nothing will remain to pre- vent its development on a sound and stable basis. The people are intelligent and industrious and, I am informed, that there is ample capital only awaiting the secu- rity of a valid title to be devoted to various agricultural and manufacturing ven-
tures.
11. At present the staple crops are rice, sugar, sweet potatoes and vegetables. Possibly the rice cultivation is as good as we can make it, but the sugar cultiva- tion is capable of great improvement, and I have reason to believe that seri- culture will be tried on a large scale, while I see no reason why, with the further propagation of succulent grasses already growing in the Colony, the hills north of the Kowloon range and the island of Lantao should not support a sufficient number of cattle to render Hongkong independent of the supplies now procured from the West and North Rivers.
12. Unfortunately during the year the large river steamers that traded between Hongkong and the West River treaty ports were withdrawn in consequence of the difficulties that beset them on account of the strained interpretation by the Imperial Maritime Customs of the inland navigation agreement. The Companies interested asked no more than that they should have the liberty to carry passengers to and from any place on the river, undertaking to confine the carriage of cargo and par- cels to the ports and stages already agreed upon, and being prepared, if necessary, to carry a Customs Official on board and to conform to every local regulation as to
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