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endeavoured to answer this question, and were shown graphs by the Executive En- gineer in charge of the Buildings Ordinance Office, of which copies are not available, showing a continuous decline in construction since the year 1931. In 1932, 1,472 houses were actually completed. In 1937 only 168 houses were completed. Tables showing the actual building of houses now in progress are given in Appendix III to this Report. It is obvious that the present rate of building is wholly inadequate.

6. Several witnesses told us that there is plenty of money lying idle in the Colony, but that investors have no confidence in land. They have before them the losses incurred by landlords during recent years, and they require to be assured that there will be a continued demand for accommodation before they will supply it. For this reason, although there is a general rise in rents, and a sharp decline in vacant accommodation, the market for the sale of land and house property remains depress- ed. Investors are not convinced that this demand for premises is more than tempo- rary, and they fear that if they put their money into house property they will, on the cessation of the present hostilities, be faced with the same question of vacancies.

7. Another factor which is undoubtedly depressing the market is the excess water problem, and we invite reference to Chapter X of the Economic Commission's Report. (Sessional Paper No. 3 of 1935). The question of Government policy does not concern us, but we have found as a fact throughout our inquiry that charges for the consumption of excess water have imposed a heavy burden on landlords, especi- ally as regards Chinese tenement houses, and one of the reasons for increased rents, now that there is a demand for accommodation, is to lighten this burden. In the case of some property in Kowloon acquired as an investment, the gross rental was approxi- mately $24,000 per annum, and in one year the charges for excess water were about $4,000. "The question of water", said a witness,

is a genuine hardship on the landlord, and it is putting the price of property down. Until something is done about it, we shall never get a good land market in Hong Kong for Chinese tenement house property". Investors also fear that should the present increase in population prove only temporary, the constant defaults in payment of rents will again recur. Re- ferences to extracts from landlords' books show that rents in a huge number of cases were constantly in arrear, and that in many cases tenants slipped away owing several months' rent. Rather than earn no income at all, landlords permitted such tenants to stay on in the hope that they would ultimately pay something.

8. It was pointed out to us by a prominent landlord, that the remedy of dis- tress, a powerful weapon available to a landlord in England, is in this Colony, at least as far as the majority of Chinese tenants are concerned, almost completely useless. We asked the Deputy Registrar of the Supreme Court to supply us with figures, and we found that sales under distraints since September, 1937, until the present time amounted to a farce. The claims for arrears of rent were in many cases substantial, claims in excess of $100 being common, and in excess of $200 not in- frequent. The returns in these cases were often nil returns, or

or returns showing recovery of a few cents. In the very great majority of cases the landlord did not recover even the costs of the distraint. There is no doubt that there is often collusion between principal tenants and sub-tenants as regards the ownership of goods in premises which are the subject of distress. The Deputy Registrar supplied us with further figures showing that landlords are resorting to distress in a greater number of cases in recent months, but we think that warrants are issued more with a view to getting rid of undesirable tenants than with any hope of recovering arrears of rents. It is possible that in some cases landlords have abused the remedy of distress, for example by refusing rent when tendered and then alleging that rent is in arrear, but we received no evidence of this. The only complaint we received was from a tenant who claimed that distress had been issued for an amount in excess of the amount actually due. This witness was invited by a member of the Commission to attend with him at the Registry of the Supreme Court in order that the complaint might be investigated, but the witness did not appear at the Registry, and on hearing the landlord we were satisfied that the amount claimed was in fact owing. Again, we are not concerned with policy, but we find as a fact that the remedy of distress is singularly ineffective in this Colony.