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PUBLIC RECORD OFFICE

Reference :-

TEETC.O. 882

5 PUBLIC RECORD OFFICE, LONDON

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substituted in its place. I am loth to suggest or to sanction any extension of the farming system, unless exceptional reasons are shown to the contrary, but I recognise that the present case is exceptional, that revenue must be raised, and that it may probably be raised more effectively and with less friction through the medium of a farm than by a system of direct licenses. I commend the proposal, therefore, to your consideration.

Ordinance 15 of 1888. Rating Ordinance.

20. I am of opinion that this Ordinance should not be extended to the new terri- tory until it has been visited and carefully examined by an assessor, who would be able to report as to the advisability of raising road or other rates. This Ordinance should therefore be added to the Schedule to the draft Ordinance.

Ordinance 15 of 1889. Building Ordinance and amending Ordinance.

21. I concur in Mr. Goodman's opinion that these Ordinances should be excluded, unless the Director of Public Works reports that they can be satisfactorily carried out in the new territory.

Ordinance 5 of 1890. Vaccination.

22. I agree that this Ordinance may properly be included. Ordinance 7 of 1891. Gambling.

23. This is a subject which presents even greater difficulties as regards legislation than that of Public Health. You will see that Mr. Goodman is, on the whole, in favour of not excluding this Ordinance from the new territory; and he points out in a forcible manner the consequences that might be expected to result from its exclusion. On the other hand, to carry out the provisions of the existing Hong Kong gambling laws would require a very large police force, and an expenditure which the new territory is unable to afford; and recent experience has shown that even in Hong Kong, where the population is easy to supervise and control, as being contained within a small area, and where there is a strong and well-organised police force, it is impossible to prevent corruption and to stop gambling.

24. It may be, therefore, that instead of attempting to prevent gambling, the best plan will be to limit and control it, as is done elsewhere, in such a manner as to prevent its being so prevalent as to constitute a serious evil. I can see no reason why such control should not be exercised effectively without an extension of the elaborate gambling laws now in force in Hong Kong, and without rendering necessary the creation of an expensive police force. I have therefore come to the conclusion that it will be best not to extend this Ordinance to the new territory, but to substitute in its place some simpler and less stringent enactment, and I shall be glad if you will give the subject your careful consideration. Whatever law is passed must be administered most carefully, and I cannot too strongly urge that the officers who will more especially deal with the new territory at the outset should be selected for discretion even more than for zeal, and should take as standing instructions to use every effort to conciliate and win the confi- dence of the people.

Ordinance 20 of 1891. Merchant shipping.

25. As a new Merchant Shipping Consolidation Ordinance is about to be intro- duced, it may be advisable to exclude the existing Ordinance from the new territory.

26. There is no question as to the "waters of the Colony," the limits being clearly marked in the map attached to the Convention, a copy of which is annexed, and which should be closely followed in any definition in the proposed new Ordinance!

The Opium Ordinances.

27. It will be necessary to exclude these Ordinances from the new territory until you have been able to formulate the scheme for the collection of the Chinese Customs duties in Hong Kong to which I have referred in the earlier part of this despatch. Some modification of the existing Ordinances will no doubt be necessary, and the contract of the opium farmer will require revision; but as the draft Ordinance provides that existing contracts shall not apply to the new territory, I see no reason why there should be any difficulty in this respect in the meantime.

Ordinance 17 of 1887. Cattle Disease and amending Ordinances.

28. Before deciding whether this Ordinance should be extended to the new terri- tory, the Colonial Veterinary Surgeon might with advantage be called upon for a report of any recommendations he may be able to make after a full and careful consideration of all the circumstances of the case. But I agree with Mr. Goodman that sections 4 and 5 of Ordinance 23 of 1890, dealing with the sale and importation of unwholesome food, should be extended at once.

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29. As all Ordinances not specified in the Schedule attached to Mr. Goodman's draft Ordinance will apply to the new territory, you should carefully consider whether there are any others, not alluded to in his memorandum, which it might be also desirable to exclude.

30. I have now given you my views upon this branch of the subject in detail, and I trust that you will clearly understand the general principles by which I have been guided in so doing. It would be contrary to sound principle to introduce laws which it is ob- viously impossible to enforce; and although, as I have said before, it is of importance that the new territory should from the first be regarded as an integral part of the Colony of Hong Kong, it is equally important to bear in mind that the country, regarded as a British possession, is in its infancy, and that it must be some time before its inhabi- tants can become accustomed to the incidents of a British administration. Whatever laws, therefore, are extended to the new territory must be administered with the utmost circumspection, and every allowance must be made for local circumstances and local prejudices. I feel satisfied, however, that you will realise the importance of a gradual and cautious policy in the task set before you, and that I may safely leave the matter in your hands.

31. There are various other questions to be considered in connection with the new territory, which will require your careful consideration, and some of which have doubtless already received your attention. I do not propose, however, to do more than refer to them generally at the present moment, as their ultimate decision must depend in a great measure on the course of events.

32. You will have gathered from my previous remarks that I am not prepared to accept Mr. Lockhart's recommendation that the new territory should be treated as separate from the existing Colony, and that I am in favour of utilising the existing machinery of government in Hong Kong as far as local circumstances will allow. This principle should therefore be borne in mind in considering all questions connected with expenditure and taxation. Whatever expenditure is incurred should appear on the Hong Kong Estimates, and whatever revenue is collected should go into the Hong Kong Exchequer.

33. It will be seen from p. 16 [49] of Mr. Lockhart's report that the total revenue from taxation of the new territory is estimated at about £16,000, and this may be re- garded as the income which you will have at your disposal for the first year or two, at any rate. It should amply suffice to defray the initial cost of a simple administration which at first will amount to little more than supervising local bodies and protecting life and property, unless there is a large outlay on public works. Some expenditure on public works will no doubt be necessary from the very first, and as the territory progresses this expenditure may naturally be expected to increase. To meet it Mr. Lockhart has recommended that recourse should be had to a loan; but while I am in principle not averse to borrowing for the purpose of developing a district, a province, or a colony which promises to be remunerative, I must keep in view the present state of the finances of Hong Kong, and if the new territory can be developed without having recourse to a loan, it will no doubt be preferable. I shall expect to receive your recom- mendations on this point after you have considered it in all its bearings. It would, how- ever, I think, under any circumstances be desirable that the Director of Public Works, possibly with other expert assistance, should consider and make suggestions as to what public works, in the nature of roads, bridges, police stations, &c., should be undertaken at once, and also to advise as to future undertakings. Whenever money is available for the purpose, it will be desirable to secure the services of a mining expert to make a detailed geological report, and I shall be glad if you will bear this latter point especially in mind.

34. I have in my previous remarks adverted to the importance of an early survey of the new territory, and no time should be lost in setting this on foot. The expense of a thorough and complete survey, however desirable, will probably at present be too great, and it may be necessary to do no more at first than is necessary for the settlement of titles to land. It will be necessary, however, as I have already observed, to create a temporary office of Land Commissioner, assisted by a staff of native surveyors. The latter can, in all probability, be obtained from Ceylon, and a despatch* has been addressed to the Governor on the subject, while as regards the Commissioner or Settlement Officer. himself. I would suggest that if you have no officer in the Colony who has had ex-

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