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Military premises situate to the North of Queen's Road East could be disposed of and the Barracks and other buildings be removed further from the Water, I have the honour to enclose copy of a communication which I addressed to Vice-Admiral Hamilton, C.B., enquiring whether the Naval Yard, which is situated in the proximity of the Barracks, could be exchanged for one of equivalent value at Kowloon.

Enclosure

Hong Kong, 5th March, 1887.

The Admiralty asked in 1885 that a portion of this ground should be given over, but Sir G. Bowen represented that it was worth to the Colony £46,700, and he objected to its being handed over without compensation. Quite recently, Admiral Hamilton informed me that the Lords Commissioners of the Admiralty considered that there

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