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TILLIC.O. 882

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The British dollar would be procurable to practically any extent upon sufficient notice being given to enable their being imported from Hong-Kong, and they could be supplied upon exactly the same terms as in Hong-Kong, plus the shipping charges between the two ports.

Our opinion is that it would take a considerable time before the British dollar would pass with the clean Mexican at Wei-hai-Wei; immediately the British dollar was made legal tender in the place the Mexican would either go to a premium or disappear from the Colony.

British dollars might in time come into general use in Chefoo and its neighbour- hood, but we think they would always be at a discount as compared with the clean Mexican, so long as the latter is worth more than its intrinsic value in Shanghai.

As regards Chefoo; on the 4th of April we instructed our agent to inform the British Consul that he was prepared to assist, as far as possible, in establishing the British dollar as legal tender there, but that, as our Chefoo agency does not receive money, either on current account or fixed deposit, our powers in the matter were necessarily limited.

It is of interest to give the figures of our turn-over last year, 1901; they were $14 lacs in Chefoo and $19 lacs in Wei-hai-wei.

Now that the British Government are drawing in the expenditure at Wei-hai-wei, the above figures are likely to decrease.

I note that the Lords of the Treasury do not think it desirable to proceed with legislative action unless the acceptance of the British dollar can be assured in the walled town of Wei-hai-wei, and by the foreign banks at Chefoo. As far as we are Concerned, we would be glad, if necessary, to make a small sacrifice, if by so doing the circulation could be assisted, but, as we pointed out above, our power for action in the matter is very limited.

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SIR,

(No. 29.)

No. 102.

COMMISSIONER LOCKHART to MR. CHAMBERLAIN.

(Received July 17, 1902.)

[Answered by No. 145.]

Government House, Wei-hai-Wei, June 5, 1902. WITH reference to paragraphs 14, 15 and 16 of your despatch, No. 5, of the 28th February last, I have the honour to address you on the subject of a Police Force for this Dependency.

2. I have delayed writing to you regarding this matter until I knew definitely when the Chinese Regiment was to be disbanded. As active steps are now being taken in that direction, the consideration of what should be done in the future in order to secure the maintenance of peace and good order in this dependency and the protection of the lives and property of the inhabitants should be no longer postponed.

3. It might be thought by those not possessed of local knowledge that the new territory at Hong-Kong being similar to the leased territory here, the same police arrangements as have been introduced into the Hong-Kong new territory. might be adopted as a model here. But the customs in either place are very clifferent.

4. In the case of the new territory at Hong-Kong its inhabitants had lived for almost half a century on the boundaries of the Colony, and many of them were engaged in trade in the city of Victoria, or worked as labourers there. The British methods of administration and systems of law and police were consequently well known to them. It should also be remembered that the residents in the new territory of Hong-Kong had not a good reputation for orderly behaviour.

5. In this Dependency the circumstances are different. The Chinese here have never had any experience of British administration before the territory was leased by Great Britain, and were therefore quite ignorant of the principles under-

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lying that administration. My own personal experience of the inhabitants is not sufficiently long to enable me to speak with much authority regarding the character of the natives here, but all whom I have consulted agree in describing them as law-abiding, docile and orderly. The abnormally small amount of crime among the Chinese since the Dependency was taken over also supports this general con- sensus of opinion regarding the behaviour of the inhabitants.

6. In view, therefore, of the difference in the conditions existing here and in the new territory of Hong-Kong, I am not in favour of treating both places aliko so far as the constitution of a Police Force is concerned.

7. But even if the circumstances were more alike, financial considerations, to which I realise the necessity, impressed upon me by you, of paying regard, would make me hesitate to follow the Hong-Kong model. As you are aware, the cost of policing the new territory at Hong-Kong is large, and that cost would probably be still greater here, if the Hong-Kong system were adopted. At the same time it would be worse than useless to endeavour to introduce that system unless it was carried out in its entirety.

The estimate of $28,000 for a Police Force, framed by General Dorward, and referred to by you in paragraph 14 of your despatch, No. 5, of the 28th February last, would be quite inadequate to meet the cost of a Police Force constituted on the lines of that now in existence in the new territory at Hong-Kong.

8. After careful consideration of the whole question, based on my own en- quiries and on the opinions of others possessed of local knowledge and experience whom I have consulted, I am of opinion that for police purposes the most effective and economical plan will be to continue the system at present in vogue, and to retain it so long as it works as satisfactorily as it has hitherto done.

9. The system, which is suitable to the whole of the territory, with the excep tion of the town of Matou and the island of Liu Kung, is based on the fact that the unit of society is the family or village and not the individual, as in the West. The Commissioner appoints headmen for each village or group of villages through- out the territory. These headmen are held responsible for the maintenance of peace and good order in their villages. If any trouble arises in connection with a village, the headman reports the matter and aids in making any arrests that may be necessary. Experience has shown that, as a rule, the headmen are most ready to co-operate with the Government in bringing bad characters to justice and keeping good order in their own villages.

If the Government desires to arrest any individual, a native notice-server is lespatched to the village of the person wanted, and the headman assists in effecting his arrest.

On rare occasions of serious trouble, it has been customary for the Magistrate, accompanied by a military escort of the Chinese Regiment, to enforce justicę.

10. Although the inhabitants of this neighbourhood appear to be naturally orderly and well behaved, the remarkable absence of crime of a serious nature may to a certain degree be due to the existence here of a garrison, which has caused the native populace to realise that, in the event of any exceptional disturbance arising. a military force has been available to assist in its repression. The presence, too, of the military has undoubtedly created a sense of security among both Europeans and Chinese, and it is unnecessary to point out that, without such a feeling of confidence, Wei-hai-Wei, so far from becoming a popular place of residence, would diminish rather than increase in population."

11. For these reasons I am of opinion that it will be necessary to supplement the system of police which I recommend, by a military force, the prime object of which will be to inspire confidence in the residents of all nationalities here, but which should also be available when required by the civil authority to aid in suppressing any disturbance or trouble of a serious nature.

12. I do not consider a large military force will be necessary. A garrison consisting of two or three companies would be sufficient, especially as there always one of His Majesty's ships-of-war stationed here and as there is to be a body of marines for duty on the Island, which could render assistance should any grave emergency render such aid necessary.

13. It is desirable that the garrison should consist of white troops, as they would inspire more confidence than troops of any other race. found impossible to arrange for a garrison of white troops, Indian troops would If, however, it is answer the purpose, though white troops would be preferable.

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