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The Hongkong Government adopted the expedient of withdrawing from circulation all its subsidiary coin received as revenue, and succeeded in inducing the Authorities at Canton to temporarily suspend the coining of small coins at the Mint at Canton. A Committee was appointed to consider the causes of the depreciation of the subsidiary coinage of the Colony and to advise what steps could be taken to rehabilitate it. As a result of the enquiry the Government addressed strong representations through the proper channels to the Chinese Authorities both at Peking and Canton urging the suspension of the coinage of small coins at the Canton Mint until the coins had again reached par. No definite reply had been received to these representations at the close of the year.

The Committee appointed in 1906 to collect funds and administer relief to the sufferers by the disastrous Typhoon of 18th September, 1906, completed their labours early in the year and reported that they had collected $279,903, all but $11,000 of which was contributed by residents in the Colony, and by firms doing business with it. Of this sum $198,002 were spent in replacing or repairing 1,601 Cargo Boats, Junks and other craft lost or damaged, while $46,668 were spent on the relief of destitutes (including 205 women and children) and the recovery and burial of dead. The balance of $33,768 has been placed in the custody of the Government as a fund for relief in similar circumstances. Thirty thousand Dollars were also contributed by the Chinese Government to the Tung Wa Hospital and have been set apart by that institution to serve as a similar fund. A further sum of $106,659 was spent during the year out of Revenue in repairs to Government Works and Buildings caused by the Typhoon of 18th September, 1906. In September a very heavy rain storm caused considerable damage to the Kowloon Catchwater and to other Government Works.

The Commission which had been appointed in the previous year to enquire into the administration of the sanitary laws and the existence of corruption in the Sanitary Department issued their report in April. The Commissioners found that widespread corruption existed among the subordinate Sanitary Staff, and on the evidence furnished by the Commissioners several Sanitary Inspectors were tried by the Executive Council suspend- ed and dismissed. Much of the dissatisfaction with the administration of the Public Health. Ordinance was removed by the amendment of a section dealing with open spaces in the rear of existing houses, and by a free use of the power of exemption from the provisions of the law relating to cubicles in Chinese tenement houses. A Committee was appointed to enquire into this latter subject and their recommendations with several suggestions made by the Com- missioners and others are being embodied in amendments of the Public Health Ordinance. In the result it is anticipated that thanks to the angrudging labours of the Commissioners the Sanitary Department will in future be more honestly served while many improvements will be effected in the Sanitary Law and the method of its application.

In consequence of the high rate of exchange which reached more than 2/3 to the Dollar, the Secretary of State for the Colonies, with the concurrence of un-official members of the Legislative Council, allowed the sterling salaries of Civil Servants to be paid at the rate of 2-to the Dollar when the rate of exchange is above that figure and at the rate of the day when it is below it.

During the year the claim for compensation on account of the lives lost in the Piracy of the S.S. Sainam, referred to in the Report of last year, was settled; and the Provincial Authorities have now adopted measures which it is hoped will be effective in the suppression. of piracy in the Delta and on the West River.

Mr. F. GROVE, Chief Resident Engineer, and a considerable Staff were at work on the Chinese Section of the Hongkong-Canton Railway during the year. The Survey was com- pleted and steps were taken for beginning construction early in the current year.

His Excellency CHENG YAN-TSUN succeeded His Excellency CHAU FUK as Governor- General of the Two Kwang Provinces.

Mr. H. H. J. GOMPERTZ acted as Attorney General until the arrival of Mr. W. REES DAVIES in July.

Mr. E. OSBORNE was appointed a member of the Legislative Council vice Mr. G. STEWART Who left the Colony, and Mr. H. KESWICK took the place of Mr. W. J. GRESSON absent on leave.