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I also had the opportunity of consulting the Chinese on another proposal.

There came to me a resolution from the Chamber of Commerce, in which the Chamber proposed that the Government should adopt a system of registering all the sleeping partners in Chinese houses of business. They showed that it was exceedingly difficult to find out who had money in a Chinese trading concern, and recommended that the natives should be compelled by law, and under adequate penalties, to register every person who had a share, no matter how small, in a Chinese business. The Chamber of Commerce added that they had no desire to apply this system to the European houses, but wished it to be confined solely to the Chinese. Acting on my usual principle, I mentioned it to some of the leading Chinese bankers and others, but they pointed out that the Chinese system of trading would be completely upset by it—that there is an extraordinary net-work of investments in this Colony, as in any other community of Chinese, and that it would interfere seriously with Chinese trade, and, in fact, tend to prevent the influx of Chinese into the Colony. Accordingly, I declined to accede to the proposal of the Chamber of Commerce.

From time to time suggestions have been made to me about sanitation, and they have generally assumed the character of recommending the pulling down of Chinese houses, compelling the Chinese to adopt what are called the rules of Western sanitary science, that is, to have underground drains, to build their houses after a system they do not like, and to conduct their domestic arrangements according to European and American models. There again I found, on consulting the Chinese, that they did not like it. They said all this would only tend to drive them away, and they ventured, shrewdly I think, to say that their own system had some merits, and that the system to be substituted for their own had not worked well elsewhere—had caused typhoid fever, diphtheria, and cholera, from which this Colony and the neighbouring ports are free.

Well, gentlemen, it is upon such questions as these that I have been able to give to the Chinese community positive assurances to the effect that I would make no distinction between them and the other British subjects in the Colony. The mere fact of doing that which was, after all, but a negative exercise of the functions of the Government has gained for the Government the confidence of the Chinese community, and they have come to the Colony for the last three years in large numbers. They are settling here, buying property, and what they are doing is, no doubt, of great interest to us all.

I must say it is of interest to me as the Queen's Representative, not merely because I see Her Majesty's Chinese subjects prosperous, but because what is going on in Hongkong tends to render prosperous men of our own race from England, Ireland, and Scotland in this Colony. I rejoice, also, to see that this prosperity is shared in by the Armenians, the Parsees, and other subjects of the Empress of India; as well as by the Portuguese, the Americans, the Frenchmen, the Germans, and the other foreigners who here enjoy the commercial advantages of an Anglo-Chinese Colony and the protection of the British flag.

My honourable friend the Attorney General has seen the West Indian Islands. He and I have seen Englishmen full of enterprise and ability there, but we have seen, too, many of them bankrupt planters, broken-down merchants. Why? Because the native community they had to work with was not like the community of this Colony. Here you find a community industrious and temperate, with a natural aptitude for commerce. But it is not merely Chinese who are making money. The Europeans are making money also. And as we watch the transfer of business houses in this Colony, and see the Chinese trader coming closer, day by day, to the manufacturer of England, it is a deeply interesting fact to note, that, with the growing prosperity of the place, there arises a demand for British enterprise, for enterprise that the Chinese mind, with its unrivalled trading instincts and natural commercial skill, cannot at present supply. I refer to our local Companies, founded by Europeans. Is there any one here who can say that in any other Colony there are public Companies more prosperous than the public Companies of Hongkong? Take them all in all, the public Companies founded by the enterprise and ability of our European merchants in this Colony, are at this moment eminently prosperous,—our Dock Company, Sugar Companies, River Steamer Companies, Insurance Companies, our Gas Company and our local European Bank. What Eastern Company is more flourishing than the Hongkong and Shanghai Bank? Well, the success that has attended these Companies arises, no doubt, in the first instance from the enterprise of those who originated them, but we must not forget the fact that they are worked in the midst of a Chinese community, and that it is impossible to separate the prosperity of our fellow countrymen from the prosperity of the natives of the Colony.

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There is one other consideration which I may venture on this occasion to point out to you. It is this, that of all the colonies in Her Majesty's Empire, this is, perhaps, the most interesting in what may be called the foreign policy that is forced on the Government. We are close to an extraordinary Empire. This little Colony has with the Empire of China the most intimate commercial relations.

What should be the duty of this Colony to the Chinese? Apart from the general principle of doing justice to all, I have to look to the interests of England and the instructions of Her Majesty on this subject, and there is no doubt, the interests of England are gravely involved in having this Colony maintain friendly relations with China. The Chinese have at the moment, and have had for many years, a great deal of internal content. And what is the consequence? Throughout China now, there is a development of industrial resources and a production of wealth which cannot fail to benefit the British manufacturer and British ship-owner. China is an essentially progressive nation,—cautious and slow, but, I say, eminently progressive. It is not progressive in certain respects, no doubt; for instance, not in that way one sees sometimes depicted in Punch, where children assume to lecture their parents, and where the rising generation expresses contempt for grey hairs. That is a species of progress we do not see in China. His Honour on my right will also, perhaps, have noticed in some of the commercial cases before him, that there are some practices sanctioned by our bankruptcy law in which one would be sorry to see China making progress in the sense in which the term is sometimes used in Western nations and the United States. My own experience on the subject is confirmed by the evidence printed by order of the Congress of the United States with respect to the Chinese who had gone from Hongkong to San Francisco. There I find the evidence of the Chairman of the Chamber of Commerce, a gentleman apparently of large business transactions. He speaks of having transactions amounting to millions of dollars with the Chinese, But what he says is, in effect, this,—"I find I can have these business transactions with the Chinese in San Francisco with perfect safety. I take no bond or security from them. Large sums of money and goods to a considerable amount pass. As it were a countryman of my own or any other foreigner, I would have to adopt a different system." In short, he says,—"I attribute the commercial prosperity of the Chinese in San Francisco to their great commercial probity." Another leading American merchant of San Francisco, in his evidence, says,—"The Chinese pay their debts ten times more promptly than our white men; they are clear-headed, shrewd, intelligent, and capable of managing business on a large scale; this is especially true of the 'hong merchants of Hongkong."

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National characteristics such as these make China a safely progressive country, and make it the duty and interest of a trading Colony like this, and a commercial Empire like England, to be at peace with China. I would push this principle of peace to the extent of not worrying them with advice. They will understand, in course of time, that there is something to be learned, especially in physical science, from Western nations. But, above all, we should avoid, either in dealing with the Queen's subjects in this Colony, or in our relations with the Empire near us, any attempt to force on the Chinese institutions which are unsuited to them, and some of which we, in course of time, may, perhaps, discover are unsuited to ourselves. Those are the principles by which I have endeavoured to guide my four years' administration of this Colony, and now, in submitting to you these returns, which correspond with the period of that administration, I can only express the hope, and I do it with every confidence, that, when the next census is taken, all classes in this Colony will be as prosperous as they are to-day.

The motion that the papers be printed was passed.

THE PENAL LAWS AMENDMENT BILL.

The GOVERNOR then moved the introduction of the Penal Laws Amendment Bill. He said it embodied certain recommendations that he had submitted to the Secretary of State, to the effect that the Branding Ordinances, and all Ordinances imposing flogging on the Chinese race exclusively, be repealed; that public flogging and flogging Chinese on the back be abolished, and that no flogging be allowed in Hongkong except for such offences as would entail flogging in England. Her Majesty's Government had authorized the introduction of the Bill. It was read a first time and ordered to be printed. The second reading to be taken at the next meeting of Council.

FINANCE COMMITTEE.

Certain votes that had passed the finance committee were then confirmed, His Excellency adjourned the Council sine die.

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