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APPENDIX.

Despatch of Governor.

Sir,

Government House, Hong Kong, May 27, 1899. IN continuation of my despatch No 107 of the 28th April, I have the honour to inform you that no time was lost in visiting and inspecting the new territory, and making preliminary arrangements for the divisions into districts and sub-districts into which it is proposed that it shall for the present be divided.

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6. Until it has been decided whether the boundary originally suggested be adopted I have determined not to exercise any civil jurisdiction north of the river. As to the question of boundary, in my opinion the river boundary, as adopted tentatively by the Commissioners appointed, was a fairly satisfactory boundary. But it has been demonstrated that numbers of people can collect in the populous lines of villages immediately north of the river and proceed to make incursions into our territory, and in consequence of such an incursion, unchecked by the Chinese authorities, we have pushed beyond the river, occupied Sham Chun and Sha-tao, and hoisted the flag at the former place. Having done so it will be difficult to retire, as such a course would possibly invite attack in the future, and would certainly be put down to weakness by the Chinese. On the other hand, if we determine to remain at Sham Chun, I fear that it will be necessary to occupy the valley and up to the summit of the hills, as proposed by Mr. Stewart Lockhart, for the small river running west of Sham Chun is not a practical boundary. I attach Major-General Gascoigne's Report of the proceedings, with a corre- spondence bearing upon this subject of the boundary.

7. As to the question of increasing the garrison, General Gascoigne is prepared to hold the Sham Chun Valley so long as there are no complications in Hong Kong, involving possible attack upon the garrison. In that event neither the hills nor the river would be made a line of defence, and the garrison would be probably withdrawn to Victoria and Kowloon, with its outposts on the passes of the hills immediately north of Kowloon City. But in the absence of such complications the valley north of Sham Chun offers an admirable camping ground, and would probably, if used, increase the practical strength of the garrison by a considerable number who are in hospital in Hong Kong from venereal disease. In Hong Kong the men must suffer from want of exercise and confinement, for they have to go 2 miles at least to a recreation ground. The consequence is a temptation to licentious habits and a serious weakening of the garrison by disease.

8. Should the boundary be extended it will necessitate an increase of at least fifty police beyond the number estimated for.

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I have, &c. (Signed)

H. A. BLAKE, Governor.

Your Excellency,

Enclosure 1.

Minute of the General Officer Commanding.

Hong Kong, May 10, 1899. I AM quite prepared to detach temporarily a force of 1,500 men (infantry and artillery) to effect the reduction of Kowloon City and of Sham Chun, should it be decided to add these towns to British territory. The strength of my garrison would, in my opinion, justify not only this reduction, but would enable me afterwards to assist the civil power in keeping order in these towns, as in other parts of the new territory.

But if it is in contemplation to largely increase the territory by extending the boundary-line, taking in, as I understand, a populous and a turbulent district, then I certainly consider that my present strength is altogether inadequate for a permanent occupation of large tracts of ground far removed from my base, and the police of which would probably, for a long time to come, require military assistance.

At the same time, I think it would be a wise and highly politic measure to take advantage of the present opportunity to seize any further extension which may be thought desirable, and to so increase my garrison as to enable me to hold such extension in perfect security, and also, should the occasion arise (which I firmly believe it will), that sudden risings in various parts of China, more or less considered to be under the sphere of British influence, might cause appeals for help from the garrison of Hong Kong, which appeals I should in that case be able to grant to the exclusion possibly of some other foreign Power.

(Signed)

W. J. GASCOIGNE, Major-General.

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