The Contagious Diseases Hospital, otherwise known as 'The Lock', operated at the site, firstly in Yard 2 then in Yard 4, from November 1879 until its relocation outside the site's walls in 1895.  It was established to combat the prevalence of venereal disease in Tasmania, particularly in Hobart.  The Commodore of the British Fleet had blamed the common women of Hobart for the severe cases of syphilis amongst his crew after a visit to the port.

The Contagious Diseases Act was passed in 1879 and reinforced in 1882.  It was the first act indirectly passed against any form of prostitution.  Under the Act, carriers of venereal disease (eg, gonorrhea and syphilis) who did not voluntarily report for treatment, were compulsorily treated in special hospitals such as the one at Cascades.

The majority of patients were aged between 17 and 45 years and all were female.  Many women were compulsorily admitted to the hospital on the suspicion of carrying a venereal disease simply because they were 'common prostitutes'.

According to Brown in Poverty is Not a Crime (p.120):

The women were forcibly subjected to a medical examination and were 'locked up' for anything from two to twelve weeks, undergoing intense moral and religious instruction during this time.

When women had completed treatment at the Hospital, they were encouraged to enter Hope Cottage, the Home of Mercy's Mission for Fallen Women, instead of having to return to the streets.

The Home of Mercy (an Anglican charity) took over the management of the 'The Lock' from 1890.  A year later, the Hospital was moved from Yard 2 to Yard 4.  Then in 1895, what was by then known as the Home of Mercy, was relocated outside the walls of the Cascades site down Degraves Lane.  This building was demolished in 1970.