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always been rendered muddy by heavy rains, and this disagreeable and most un- desirable effect has been aggravated this year not only by an exceptional season, but by the number of excavations for houses which have been made at the brink of the watershed. As the upper levels and other outlying portions of the Town must be still dependent upon this supply, it is a matter of urgent importance that a work, which ought to have been commenced long ago, should be as quickly as possible pushed to completion.

48. Owing to the causes referred to under the head of Expenditure, other works, although equally needed, have either made very slight progress or have not been commenced at all. The general improvement of the drainage, the necessity of which is continually increasing, will be commenced as soon as the Engineers, who are being consulted on the subject, have decided on the system to be adopted; and the same may be said respecting the distribution works required for the Tytam Water. The Western Market has not proceeded beyond the preparation of the site; and there has as yet been no possibility of commencing the public Laundries which appeared on the estimates for the year and are very much required; the present process of clothes washing being in various ways dangerous to health, especially from the quantity of soap in solution which in some quarters pollutes the air. The Epidemic Hospital has not been built because not a single site that was, or apparently can be, selected was without grave objections. In consequence, it has been determined to have recourse to a hulk; and it is to be hoped that the efforts to obtain one, commenced some months ago, may now be shortly successful.

49. A similar difficulty in respect of site, has occurred in connection with the Lunatic Asylum, intended to be provided for Chinese. Such a building is required because the present Asylum is sufficient only for Europeans, Chinese patients having been ordinarily confined under most undesirable conditions in a building in the charge of the Directors of the Tung-Wa Hospital. It is however necessary to restrict the use of the proposed Asylum to Chinese either born, or long resident in the Colony; or we should be very quickly inundated with lunatics from the neighbouring Empire. But for service within these prescribed limits such an Institution is, and must have been for a long time past, very grievously required on the simplest grounds of humanity. I am glad therefore to be able to report that a site has at length been selected, and the plan of the buildings approved; so that, it may be hoped, the work will now proceed without further delay.

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50. But second to no other work in importance or necessity is that which is intended to effect the junction of the East and West Prayas by an embankment* carried along the front of the Naval Yard and the Military Cantonments, and the plans of which were forwarded to Your Lordship early in the year. This work (the expediency of which has been recognised by the Colonial Government for. many years past, though it has now for the first time received the entire concurrence of the local authorities representing the Army and Navy) has for its principal object the provision of additional means of communication between the Eastern and Western portions of the Town, now almost cut off from one another by land in the occupation of the Admiralty and War Departments; the one narrow road which runs through this property being insufficient for the present traffic and entirely inadequate to permit of that expansion of the Town eastward which is required to provide an outlet for an overcrowded population. Besides the main advantage derivable from the scheme there are other incidental ones of much importance to the Imperial Departments concerned. Thus the Admiralty will obtain reclaimed land worth (at the low estimate of $3 a square foot) $156,792, and what is of more importance will save the cost which would shortly have to be incurred for the removal of the present silted up and often noxious foreshore in front of the Naval Yard, obtaining in its place a convenient cut-stone basin, 400 feet by 200 feet, offering a much needed protection to boats and launches, as well as sufficiently deep water close along shore at all times of tide. While the War Department will obtain land worth at a similar low valuation $1,325,856, much of which will not, I understand, be required for Military purposes and will thus be available for sale. Under these circumstances I do not permit myself to entertain a doubt that a substantial Imperial contribution will be made towards the cost of the work, estimated at $691,000, which would be a heavy burthen if required to be borne entirely by the Colony--and this more especially inasmuch as it is the obstruction caused by Imperial property which has necessitated the expense. In any case it may be hoped that an improvement so absolutely needed for the welfare and progress of the Colony will not be long delayed.

* Not the reclamation mentioned under the head "Legislation."

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