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Scarcely a week passes without the necessity of sending to their homes in Europe or elsewhere, persons who have come here ostensibly to seek a livelihood; this repatriation being the preferable and cheaper alternative to their perpetual main- tenance in Gaol or other public institutions. Some of these are sent here, apparently according to instructions, by Her Majesty's Consuls in China and Japan; and not a few come, I suspect, with the object of being sent home at the public expense. Those of them who are foreigners are almost invariably repudiated by their Consuls, as having no means of proving their nationality; and thus from one cause or another, all become a charge on the Colony. The Ordinance above referred to, which was intended as a remedy for this state of things, has probably done some good by inducing greater caution in the introduction of such persons; but it cannot so far be said to have been a marked success; and though it may perhaps be susceptible of beneficial amendment, I fear that the evil is one which can never be completely cured, and must be regarded as an inseparable incident of our position as a great shipping centre.

22. (III.) "The Rating Ordinance, 1888," was, as the title implies, enacted for the improvement of the rating system of the Colony. It embodies the more valuable portions of previous Ordinances, and contains at the same time various useful additions and amendments, principally with the object of simplifying proce- dure, which are the result of the experience gained by Mr. LISTER, the Treasurer, in the supervision of the system, and of the careful attention given by him to the subject.

23. (IV.) "The Europeau District Reservation Ordinance" deals with an evil which has been recognized by successive Governors for years past, but for which this represents the first effort to provide a remedy. The close packing of the Chinese in their houses which is the normal condition of all classes among them, including in some degree even the well-to-do, enables a much larger rent to be obtained from land in Chinese occupation than from that inhabited by Europeans, whose health in a climate unfavourable to them (not to mention their comfort) requires much more breathing space in connection with their residences. Thus the large influx of Chinese in recent years, and the comparative advantage to land owners in providing residence for them, has caused a continually increasing intrusion of Chinese houses upon the quarter of the Town formerly occupied exclusively by Europeans. This result would have been comparatively endurable if it were possible for Europeans to live in health or comfort when surrounded by such houses. unlike the Chinese who have, probably by a long process of natural selection, become inured and insensible to the conditions inseparable from extreme density of popu- lation, they are rendered ill and miserable by the effects of habits which such insensibility produces. Thus little by little, and at a gradually increasing rate, the Europeans were being, so to speak, pushed out of the Town of Victoria; and it seemed probable that before long there would be no suitable area for their residence there, and that such as remained in the Colony would have to choose between the alternative of living under most disagreeable and unhealthy conditions, or of incurring the heavy expense, possible only to the comparatively wealthy, of residence in the Hill District.

But

24. Had the above state of things been allowed to continue, there can be no doubt that it would have brought about a diminution, if not actual at least relative, of the already small European population, a result which could not be otherwise than prejudicial to the Chinese themselves. For though possessed of many valuable characteristics, the latter are still, and are likely to be for a long time to come, lacking in some of the qualities which are essential to true progress; and I can scarcely think there is any opening for rational doubt, that without the presence of a considerable complement of Europeans (apart from those engaged in Government) this Colony could no more maintain, than it could ever have reached, its present condition of prosperity.

25. By the Ordinance in question, a certain portion of the Town is reserved, not for exclusively European occupation, but for houses built according to European models, and occupied in much more limited numbers than is usual with Chinese. If Chinese choose to live under these conditions, as I am informed they commonly do in the neighbouring Penang, there is nothing in the Ordinance to prevent their doing so; and the provisions of this Law are simply directed to secure for Europeans prescribed portion of the Town in which they can live in reasonable comfort.

26. No opposition was offered to the Ordinance on the part of the Chinese possibly because they themselves prefer to be segregated from Europeans; and there