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latter composed of 17,407 trees planted, 98,158 trees reared in situ in prepared soil and 10,000 reared from broadcast sowings.

51. Eucalyptus and Malaria.—A great deal has been made at different times and places of the supposed benefits of planting Eucalyptus in malarious places, a theory which I have never been converted to and about which for many years I have spoken words of caution to those who pinned their faith to it. Last year the medical authorities here recommended the planting of Eucalyptus in selected places in the New Territory and in Hongkong and preparations were made for carrying out the recommendations and planting Eucalyptus this spring, although two of the places were, as I understand, under water and where, of course, nothing could be done until they were first filled in with soil but which work I believe is not yet done.

In connection with this subject I may quote what Professor ANGELO CELLI, an authority on malaria, said in his book "Malaria According to the New Researches," published in 1890. Writing of trees planted near Rome he says, at page 142: "The Eucalyptus planted round our railway stations "are now proved to be useless against malaria, if even they do not do more harm than good by har- "bouring the mosquitoes near the houses. Here outside the gates of the city, at Tre Fontane, an "intensely malarious spot, there is a fine wood of them, and in Australia there are enormous forests "of these trees and all are malarious."

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And again, at page 234, he says: "That the planting of woods is not a protection against malaria "has been demonstrated by the example already recorded of the Tre Fontane, where in spite of the

Eucalyptus wood which has grown vigorously, this disease still remains."

In consideration of facts such as these, which were not altogether unknown before the publication of Professor CELLI'S book, I think caution should be exercised in adopting planting recommendations for the object of preventing malaria only.

The planting of Eucalyptus trees which has been done here was not intended any more than the plant- ing of the other trees as a preventative of malaria specially but they were in common with all tree-planting intended to act in other ways for the improvement and healthfulness of the districts.

52. Fire Barriers.-Trees planted have been protected from fire as far as possible by making 4 miles of fire barriers 15 feet wide and re-clearing 1 mile 10 feet wide.

53. Conservancy.-No system of conservancy of trees which were in existence before the territory was taken over has yet been adopted, as the time has not yet arrived for taking action in this matter, but notes and information are being collected in preparation for what may seem advisable in due course. The Government is in possession of information connected with this subject and also of my views on the same to which there is no necessity for making further allusion here.

54. Estimates. I found that $8,000 had been placed on the Estimates of the Department for expenditure in the New Territory this year, but as this was in excess of present requirements and was based on a proposed plan of work which was unsatisfactory and included rearing trees by the more expensive system of sowing in situ instead of the effective and vastly less expensive system of sowing broadcast above referred to, I recommended its reduction to $3,000 which is ample for this year.

55. I hope to be able during the next few months to submit a special Report on the Forestry pos- sibilities of the New Territory which will deal exhaustively with the whole subject both of conservancy and planting, and until that is carefully considered it is not advisable to extend work beyond the limits on which it has been conducted so far.

ECONOMIC Garden.

56. In C. S. O. No. 1,768 (1), dated 7th July, 1899, when dealing with the subject of the New Territory I suggested amongst other things the establishment of an Experimental Garden for the purpose of introducing and distributing amongst the cultivators plants of economic value which would be new to the territory. In 1900 this object was approved and money provided in the Estimates for carrying it out in 1901, when, during my absence, a site for the garden was selected and an attempt made to purchase the land, but the matter of ownership and the high price asked for the land caused a delay and the question was still open on my return in September, which, however, was quite early enough as the land could not have been dealt with satisfactorily at that time. On inspection I found the selected site unsuitable and recommended its abandonment, which was approved, and another site. has been chosen which has all the advantages desired.

This newly chosen site, which is accessible in one hour from Hongkong by launch, has also the advantage, which the other had not, of proximity to suitable hill land for experimental forest tree cultivation which can be conducted under the same economical management as the garden will have.

MOUNTAIN LODGE.

57. The construction of a new summer residence at Victoria Peak for the Governor involved the re-laying out of the grounds there, and the extension of the lawns over the site occupied by the old building after its removal. I therefore recommended in C. S. O. No. 2,333, dated 18th September, 1899, that this work should be carried out and a sufficient sum of money be provided for the work, which was adopted. In last year's Estimates the money was provided, but works were not commenced until October, when, however, arrangements were immediately made for commencing work, and good progress was made up to the end of the year.

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