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7. Having established Police Stations, and arranged for the patrol of the territo- rial waters by Police launches to check armed robberies ashore and afloat, the ques- ion of Crown Rents and Taxes had next to be considered. The district is a poor one, and almost entirely dependent upon agriculture and fishing, and, north of the range of Kowloon Hills, the main source of revenue must for the present be the Crown Rent upon land. This necessitated a survey, and demarcation of the holdings, for which purpose a staff of Surveyors and Demarcators were obtained from India. At the same time a Land Court was established to deal with all claims and grant leases to those who could prove title by deeds, or, in the absence of adverse claim, by occupation. To understand the difficulties of the Demarcators it must be remembered that much of the cultivation is on hilly ground, the small rice plots, which must be perfectly flat to admit of periodical flooding when the rice is sown, being terraced in patches, some of which are but a few square yards in area. Up to the 31st March the total number of such farms demarcated was 283,975, while the total number of holdings for which claims have been presented to the Land Court was 219,517. In this Land Court I determined that Solicitors and Barristers should not have a right to appear without the special permission of the Court, as the claims were for small amounts and I felt that substantial justice would be done at the smallest cost to the claimants. In the performance of this duty, Mr. GOMPERTZ, Assistant Colonial Secretary, who has from the beginning been a Member of the Land Court, has done excellent work. His report, given in Appendix No. 2 forwarded with the report on the Territory for 1900, shows some of the difficulties that presented themselves in the settlement of these claims, and the attached map of a portion of the map of claims for the land and village of Sam Shui Po, in the Kowloon Peninsula, now before the Land Court, will further show how these claims overlap in apparently inextricable confusion. Here the assistance of Counsel has been permitted as the claims represent very large sums, the value of land south of the Kowloon range having enormously increased since the taking over of the Territory. An exemplification of this is given in the case of a portion of the shore of Devil's Peak Peninsula, west of Lyemun Pass. The claimant obtained about eleven years ago a right to about 127 acres for the purpose of establishing fishing ponds. The consideration was five dollars per annum. Having paid one or two years' rent he was five years in arrear when the first whisper was known that the land would probably be ceded to Great Britain, upon which rumour he paid the arrears, and in due course laid his claim before the Land Court, which confirmed his grant. The total amount paid by him was about thirty dollars. As soon as his claim was confirmed he sold it to a local company for fifty thousand dollars, as the bay, a portion of which is included in the claim, is suitable for the construction of a dock. I hope that the labours of the Land Court may be concluded by the end of this year, when Mr. GOMPERTZ will revert to his substantive appointment of Assistant Colonial Secretary.
8. The Revenue collected from the Territory during the year was $45,334.03. I question whether the revenue to be derived from Crown Rent at the rate fixed at present will exceed $60,000, so far as the New Territory is concerned, outside the portion between the Kowloon range of hills and the Harbour: but for this portion I look forward to a steady development as soon as the claims to the land have been settled. As will be seen in reference to Appendix No. 4 p. 19 of the report for- warded with my despatch No. 61 of 19th February, 1900, the right to alter the amount of Crown Rent there laid down for the three classes of cultivable land was reserved, but, having regard to the density of the population and their condition, I question whether any general increase will be found advisable. The area of the New Territory is about 370 square miles, of which the cultivated area is about 45,000 acres or 61 square miles. The estimated population is 100,000. Therefore, although the population shows but 270 persons per square mile of the total area, the population per square mile of cultivated area is 1,639, and while to the produce of the land must be added the result of the 'fishing, in which a considerable number of the inhabitants are engaged for a portion of the year, it is evident that, having regard to the density of the population, there can be but little taxable mar- gin in the absence of other than agricultural industries. Although up to the present the hills have not been utilised for pastoral purposes, I am not without hope that by the introduction of more succulent grasses the 200 square miles of now barren hills may be made to support cattle sufficient to supply the demands of Hongkong, now dependent upon the import of cattle from the North and West River sources that recent action of the Governor of Kwang Si in prohibiting ex- port has shown to be somewhat precarious. The Botanical Department is at present