In early 1840, the British Army set a military camp in the area. However, the camp was later closed due to the increasing number of soldiers succumbing to malaria. The cause of malaria was unknown at the time and the soldiers apparently suffered a then-unknown fever. Early settlers had suggested the area to be used as a business centre, but the idea was shelved due to the valley's marshy environment, which was causing fatal diseases. The death rate in the area and Victoria City was high in the early colonial days, and the valley became a burial ground for the dead. As a result, the valley was renamed "Happy Valley", a common euphemism for cemeteries. In 1846, the British felt that the valley terrain was ideal for horse-racing, and thus cleared the paddy fields and developed the Happy Valley Racecourse. For this, the Wong Nai Chung river was redirected to the Bowrington Canal, known as Ngo Keng Kan () locally, concurrent with the reclamation of Wan Chai. The canal is now covered by Canal Road.