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Ectract from Daily Press of the 2 oth how 1903-

The COLONIAL SECRETARY seconded, and the motion was agreed to.

THE GOVERNOR'S FAREWELL ADDRESS H.E. the GOVERNOR said.-Honourable Members of the Legislative Council. this is the last occasion on which I shall have the honour of presiding over your delibera. tions, I proposa with your permission to review as shortly us I can tho consition of the Colony during the five years of my administration of this Government. I arrived at a time when a most important and far-reaching change was about to be made in the condition of the Colony. Hongkong, which was ceded to Great Britain in 1841, had developed into a great port, with a population of 248,000. Its ares, includ ing the point of Kowloon Peninsula, was 32 square miles, The northern shores of the harbour were Chinese territory; at Sam-shai-pa, Cap-sui-moon, and Fu-ti-moon Chinese Custom-houses were established, and Chinese Customs cruisers operated within the ill-defined harbour limits to the great irritation of the community. The Kowloon extension agreement, signed on the 3th June, 1898, remedied this anomalous state of affairs in a harbour that, under the fostering care of Great Britain, had grown into the posi- tion of the third port in the world, the tonnage of whose shipping bad in twenty years increased from 5,000,000 to 17,000,000. Under its provi- sions it became my duty as the representative of Her late Majesty the Queen to assume the over 400 additional square governmout of miles of territory, with a population of "over 100,000, and also over the waters of Mirs Day and Deep Bay. This agreement gave for the first time complete control over the waters of the harbour and its approaches, and removed the causes of the long-felt irritation. It will! be in your recollection, gentlemen, that the taking over of the New Territory was not accomplished without some trouble. The delimitation of the northern boundary had to be arranged, and when it had been finally settled, on the 18th March, I, at the request of the Chinese Government, made through the British Minister at Peking, deferred the hoisting of oar flag to the 37th April. In the meantime certain agitators intamed the minds of the people by false statements RS to the result of our sccupation such an extent that armed resistance the transfer of the Now Territory was agreed apon. On the 14th April the matshels erected at Tai-pó Ha were destroyed, and the police and troops who proceeded to the place preparatory to the ceremony of the 17th were attacked by large numbers of Chinese ap- parently under military direction. Reinforce iments were at ouce sent eat and formal posses. sion of the New Territory was taken over on the 16th, so that our position should be made perfectly regular. After two engagements, In which the Chinese displayed considerable courage in acting against regular troops, and suffered some losses, the opposition collapsed. That these attacks upon our forces were encouraged by the then Viceroy there can be little doubt. My inability to permit the Chinese Customs to continue to function within the limits of the Colony was deeply resented by His Excelleuoy, and he refused to send a Chinese official to be present at the ceremony of hoisting the flag on the 17th April. In consequence of the oridonce of the complicity of the Viceroy with the leaders of the attacks upon our troops it was decided to occupy that portion of Samchun Valley lying to the north of the boundary line including the important market town of Samcban. This was effected by a joint naval and military expedition which met with no opposition, and the district was held for a month by a military force under command of Major Prendergast. R.E., who acquired the confidence of the people; insured the security of their persons and pre- perty; assisted them in making good roads; and ultimately, under instruction" from Her late Majesty's Government, withdrew from the district amid demonstrations of good-will from the inhabitants, to whom the presence of par troops had brought freedom from taxation, security of their property, and a market for their produce. Order having been restored, the ques tion had to be reconsidered as to the system on which this appareatly trebulout population of the newly acquired territory should be governed. Two courses presented themselves-repression, or co-operation. The leaders of the people had

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been almost to a man actively engaged in the operations against us, but if these leaders were put aside and degraded from the position of focal consideration and authority hitherto enjoyed by them, we should have been faço to face with a hostile population, without the means of communicating with them through trusted local intermediaries whose assistanco is so essential to good government. I have had some experience in coercion. In certain situations it becomes necessary.

But it i eugenders an ever-deepending distrust, atrophies local interest in preserving order, and with the lapse of time becomes day by day more difficult to abandon without danger to the public safety. I felt besides that these leaders would not have been guilty of such egregious folly had they not believed the scandalous statement of our intentious that were so freely circulated, and, believing them, I could not withhold a meed of sympathy for misguided men who dared to face in open fight an over- whelming power in defence of their customs and their homes. I therefore chose the latter course, and, with the able assistance of Mr. Stewart Lockhart, whose excellent work in the pacification and arrangement of the New Territory is well known to the Honourable Members of this Council, I met the elders and gentry of the districts at Tai-pò Hu and Ping Shan. disabused their minds as to their fear, divided the Territory into eight districts and forty-seven sub-districts, and appointed the village elders as district elders with judicial power to deal with petry cases, giving at the same time to Mr. Lockhart a general controlling power with coordinate jurisdiction. As a matter of fact the elders, being satisfied of our just intentions, have never exercised their jurisdiction, bat have left these cases to be dealt with first by Mr. Stewart Lockhart, and, after his return to the duties of Colonial Secretary, to Mr. Hallifax, Police Magistrate at Tai-po Ha, whose services are more frequently in demand as an arbitrator than as a m-gistrate, his decisions being readily accepted. The establishment of police stations was proceeded with at once, and a main read laid out, which has since been constructed to Tai-po Hu, a distance of 18 miles, at a cost | of $225,133. This excellont road gives access to the centre of the New Territory, and obviates the necessity of communicating by sea, u passage not unattended by danger iu rough or foggy weather. The construe- tion of the road was carried out without difficulty or opposition, the claims of owners whose lands were acquired being settled at once by arrangement or arbitration. Having arranged for police stations and the patrol of the territorial waters surrounding the 390 miles of newly acquired coast line, to check the prevalent robberies ashore and aRoat, a trigonometrical and cadastral survey was entered upon, the services of a staff of surveyors and demarcators having been obtained from the Surveyor-General's department of India. The trigonometrical survey has been completed, and 345,926 lots have beou demarcated. A Land Court was established to deal readily and inexpensively with the holdings claims, of which 165,231 have bean presented to the Laud Court. The principal cultivation of the Territory is rice, but there is also a considerable cultivation of sugar, and, in the Tain Wan district, pineapples are grown. I found on inspection that the sugar canes were of a poor quality, and the pineapples of inferior flavour, while the primitive stone-mills in use leave a large percentage of juice in the crushed megusse. 4 amber of cares of the best varieties were obtained from Java and Penang and have been distributed to the sugar farmers, and two Chatanouga steel mills were also imported, and lent to large growers for experiment. Good varieties of pineapples were imported from Ceylon for distribution. While the cultivated land is now practically confined to the valleys it is evident from the terrracing of the hills that they too yielded their share of wealth-giving crops in the past, and I have little doubt that suitable cultivation will he resumed in the future. In the meantime over 170,000 fir and camphor trees have been planted, and experiments aro now being made with the Agave Rigida, or sisal hemp plant, that may yet, I hope, introduos an important industry into the Colony, while the establishment of sacculent grasses on the suit- able hill sides ought, if successful, to goa fougway

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