every European house in that neighbourhood almost as soon as it was tenanted, caused the business settlement to move gradually westwards. Hill sites, freely exposed towards the south-west and south-east, as well as to the north, were soon discovered as being less subject to the worst type of malarial fever, and were accordingly studded with frail European houses, mostly covered at first with palm leaves. A number of wooden houses were imported from Singapore and erected on lower stories of brick or stone. But at first the only substantial buildings erected by private parties were a house and godowns built at East Point by order of Mr. A. Matheson, who foresaw the permanency of the colony at a time when most people doubted it. The native stone-masons, bricklayers, carpenters, and scaffold builders, required for the construction of roads and barracks (by the Engineer Corps of the Expedition) and for the erection of mercantile buildings were immediately followed by a considerable influx of Chinese
(From Borget's "Sketches of China.")
provision dealers (who settled near the site of the present central market, soon known as the Bazaar), and by Chinese furniture dealers, joiners, cabinet makers, and curio shops, congregating opposite the present naval yard, and along the present Queen's Road East, then known as the Canton Bazaar. The day labourers settled down in huts at Taipingshan, at Saiyingpan, and at Tsimshatsin. But the largest proportion of the Chinese population were the so-called Tanka, or boat people, the pariahs of South China, whose intimate connection with the social life of the foreign merchants in the Canton factories used to call forth an annual proclamation on the part of the Cantonese authorities warning foreigners against the demoralising influences of these people."
To these interesting details may be added the facts that the first official building to be erected was the Court House, which came into existence within the first year of the occupation, and that a gaol was also provided and a cemetery laid out. While this infant Hongkong was growing up steps were taken to perfect the official organisation. Captain Elliot continued to discharge the duties of Chief Superintendent of Trade, and he added to them those of ex officio Governor of the island. He appointed Captain Caine Chief Magistrate, and Mr. Johnson was made Deputy Superintendent of the Colony. On the 1st of May appeared for the first time the Government Gazette; a weekly official publication which has continued to this day. Its first number contained a warrant appointing Captain Caine, and, amongst other notifications, rules for shipping frequenting the port. The second issue gave a list of the villages and hamlets on the island, from which it appears that there were twenty places officially recognised by the authorities. At the time of the official occupation Chek-chu was the most important of these places, and Wong-nei-chung was the next. Hongkong itself, a hamlet of only two hundred inhabitants, stood third on the list. The relative insignificance of the material interests existing in the island when the British took possession may be gauged from the fact that only 250 acres of the entire area was under cultivation.
By far the most important step taken in the second year of the occupation was the issue of a proclamation by Sir H. Pottinger declaring Hongkong a free port. The experience gained at Singapore had no doubt suggested the advisability of this step, but even the most sanguine of those who assisted in the founding of the Colony could not have foreseen the remarkable results which would follow from the adoption of this policy. At the most they probably only hoped to establish an entrepôt which, while it would pay its own way would allow trade to be conducted without interruption. However, it was by no means all plain sailing in the early days of the occupation. Amongst the thousands of Chinese who flocked across the channel from the mainland as soon as the British flag was hoisted was a large proportion of bad characters. They came attracted by the hope of gain or plunder, and they were so protected by secret compact as to defy the ordinary regulations of police for detection or prevention. The respectable shopkeepers who did migrate left the bulk of their property and their families behind, and so, while working in Hongkong, they were almost as much under the control of the Mandarins as if they were in China. These circumstances all militated against the smooth conduct of the administration in the infant days of the settlement, and it did not tend to increase confidence in the stability of the occupation that in March of 1842 a despatch was received from Sir Robert Peel intimating that Her Majesty's Government had not decided upon the tenure upon which land should be held in the island. But perhaps the most unpleasant factor of the situation of all was the unhealthiness of the island. Disease was rife amongst the troops and the mortality reached an alarming figure. The outbreaks were attributable to some extent to inadequate attention to sanitation, a not unnatural result of the bringing together of large bodies of people, the vast majority of them possessing the most rudimentary ideas of hygeia. But the trouble was chiefly due to local causes which at the outset were very imperfectly understood.
Hongkong beyond doubt acquired a terribly bad reputation in its earliest years. When the freshness of the occupation had worn off, and when further the stream of Government money which had flowed so generously at the outset had been reduced to more modest proportions, the inevitable reaction set in. People who had been loud in their commendations of the annexation now could not see anything good in the settlement. The land regulations caused great discontent, and there was much grumbling at the revenue arrangements, which, based as they were on a system of licence fees on salt, opium, bhang, and other articles in common use, were extremely unpopular with the Chinese, and tended to keep away respectable traders. These various complaints found vent in the proceedings of a House of Commons Select Committee which sat in 1847 to consider the question of the Chinese Trade. Several leading Hongkong merchants gave evidence testifying to the highly unsatisfactory condition of the settlement. One of the number stated that most of the firms which had purchased land originally were thinking of relinquishing their premises and returning to Canton. Another mercantile witness described the Colony as in "a condition of extreme decay." But the blackest picture of all was drawn by an official—Mr. R. Montgomery Martin. This gentleman, who filled the office of Colonial Treasurer, seems to have conceived a perfectly insane hatred of the island. He penned a report in which he piled up horror upon horror and scandal upon scandal in order to impress the home public with the ruinous blunder that had been perpetrated in the occupation. The document, which was sent home in July, 1844, described the formation of the island as of "rotten granite strata," and said that the material excavated in the course of building operations "appeared like a richly prepared compost"; it emitted "a fœtid odour of the most sickening nature, and at night must prove a deadly poison." He likened the town to the bottom of a crater, and stated that this formation effectually prevented the dissipation of the poisonous gases. The Chinese had ever deemed Hongkong as injurious to health and
