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It will thus be apparent that, if Kowloon is in any way to be a service to the Colony, it can only be effected by the retention of that portion of the sea coast which alone affords facilities for the import and export of cargo, ample provision of course being made for such an occupation of its length as would be requisite for Naval or Military purposes.

With regard to this latter, I may observe that, as the seat of Government and Centre of Trade will be kept in Kowloon, so too will the Naval and Military establishments, as I presume the Home Government will not sanction any excessive expenditure for the creation of Barracks or Store Houses, when (only in such cases as the present expedition, which I trust may never happen again) they are probably, except for Coal Depots, sufficiently provided; or at any rate, if either Department requires extension, I imagine it would be most undesirable to divide it into two parts separated by a mile and a half of water.

I make the above, and following remarks, as His Excellency has placed before me the Plan and proposal of the Naval Commander-in-Chief to be granted an area, which if granted at once and for ever, would frustrate all advantages the Colony shores derive from it, as it would swallow up no less an area than 300 acres, and nearly 1¼ miles of sea frontage, literally not only the best, but

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