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10. During the same period the increase of the public revenue has, similarly, been very marked. The figures have been :--

$

1863,.................. 576,375

1868,..................1,134,106 including fees on gambling houses, since

abolished.

1878,.................. 947,637

1888,.... ..............1,557,300

In other words the public revenue has nearly trebled itself in 25 years, while the shipping visiting the port has multiplied seven-fold.

The population, which was shown by the census of 1881 to be 160,402, is now estimated at not less than 215,000.

11. It is evident that the prosperity, I may almost say the existence, of the Colony, and the welfare of this large population, depend upon the continuance and security of its trade with other places. If the trade is secure, the pros- perity may be expected to continue and increase, and the first instincts of self-interest would lead the community to make every effort to protect and defend their trade.

12. The present defences of Hong Kong, with their powerful armament, will suffice, in the opinion of Her Majesty's professional advisers, to afford the necessary protection against any attack likely to be made upon it; but I need scarcely remind you that another and more powerful safeguard is provided by the ships of Her Majesty's navy, whose duty would be to prevent any hostile force from approaching the place, and in whose absence alone would any attack upon it become possible. The combination of the two forms of defence will, it may be hoped, effectually secure the safety of the trade of the Colony, and of the population which lives and thrives upon it.

13. I frankly recognise that the merchants of the Colony have always been ready to acknowledge the value of the navy to them. At the same time the changed conditions of warfare, and the sudden and rapid nature of the opening operations, have made it necessary for Hong Kong, like other important Colonial ports, to be always ready to repel an attack in case of the absence of the fleet, and to have its garrison permanently at full strength, and not dependent upon the doubtful possibility of receiving reinforcements on the outbreak of war.

14. It will doubtless be urged, as has been urged before, that the defence of Colonial ports is a matter of Imperial concern, and that the maintenance of their garrisons should be mainly borne by the taxpayers of the United Kingdom. Her Majesty's Government have, however, never admitted, and cannot now admit, this plea. Self-preservation is the first law of nature, and if the capture of Hong Kong would be a serious blow to the Empire, the capture would mean ruin to many inhabitants of the Colony, and serious loss and hardship to all. Hong Kong, in common with every other British possession, is directly benefitted by its connexion with the rest of the Empire, and, while enjoying the benefits, cannot escape from the responsibilities, entailed by that connexion. The larger dependencies, such as the Australian Colonies, accept their responsibilities without demur, and not only provide the whole of their land defence, but contribute to the cost of the navy in order to strengthen the squadron, and obtain more com- plete protection for their shipping and floating trade.

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