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The Loan Ordinance will be accompanied by a schedule setting forth all the public works upon which the money will be expended. It is to be hoped that the Loan will be allowed to run for 50 years as thereby better terms would be secured by borrowing for that time than for a shorter period. On this and other points further instructions will be sent to me by the Secretary of State before the end of this month, and when received they will be immediately communicated to you.
In the Draft Estimates a sum sufficient to meet the interest on the Loan and other charges which will have to be paid in 1893 has been inserted. It has been estimated that $40,000 will be required for that purpose, and this is the new item I referred to at the commencement of my speech. With this addition the Estimates show a surplus of $6,785 of Revenue over Ordinary Expenditure.
Assuming your ready concurrence in these proposals, I shall, in accordance with the wish expressed by the un-official members of Council in their memo. of the 20th December, 1890, afford every possible information in regard to these works, and whenever and wherever practicable, designs, drawings and plans of them will be submitted to you.
If Honourable Members desire it a Standing Public Works Committee with the Director of Public Works as Chairman might be appointed to superintend and to control the expenditure of the amounts raised under the proposed Loan Ordinance.
In the memo. to which I have just referred a hope was expressed by Honourable Members that the vote of $40,000, which they considered as merely guesswork, for the construction of a residence at the Peak for the Governor would not be exceeded later on. In the Esti- mates drawn up by the Director of Public Works a sum of $55,000 is inserted for that object. It may be possible to reduce that amount, but, if reduced, I am informed that it will necessitate considerable alteration in the plans that have already been prepared, and possibly an abandonment of the new site selected. In reference to this work the Secretary of State requires to be furnished with a report as to its urgency and necessity, and no step will be taken towards commencing it until the plans, &c., have been approved by the Council and his Lordship.
There is one other point to which it is desirable to refer, and that is the comparative advantage of borrowing in gold in England, rather than in silver locally.
This question was fully discussed in 1886 and 1887 and special reference was made to it in my address of 25th January last. An interesting and important despatch on the subject from Lord STANLEY, dated 2nd February, 1886, was also laid before the Council, and to these documents I would venture to direct your careful attention.
The possibility of effecting retrenchment in the public service has naturally engaged my most anxious consideration. In that service vested interests cannot be disregarded, and all retrenchment consequently must be more or less of a prospective nature. I have publicly stated that when opportunities arise I will take advantage of them, but time is required to effect all such reforms. The Civil Service is to a certain extent over officered, and the salaries of the Clerical service are capable of reduction as vacancies occur. There is no doubt also that the cost of the Police is extremely heavy, and that in future by extending the term of service which qualifies Indian and Chinese constables for pensions considerable savings may be effected.
As there exists in our midst an industrious and generally honest Portuguese community, and as many respectable Chinese are qualifying for public employment, there will be no necessity, except in rare cases, to recruit the Clerical service, as distinct from the Civil Service proper, by the appointment into it of Englishmen hereafter. I propose therefore a reorgani- zation of the Clerical Establishment, and a division of that Establishment into 6 classes, with salaries ranging from $360 per annum in the lowest to $2,400 per annum in the highest class. It will be found on comparison that the average salaries to be paid under this scheme will exceed the average paid in Singapore, Mauritius, and Ceylon, and will be more liberal than the salaries paid by the best private firms in Hongkong.
For Portuguese and Chinese clerks these salaries will be found sufficient. These officers do not labour under the disadvantages that Europeans do. As they have not as a rule to remit money to Europe, as they are domiciled here and acclimatized, they can live less expensively, with less risk, and far more comfortably, than Englishmen occupying corres- ponding positions. This reorganization will ultimately effect a saving of between $25,000 and $30,000 a year. In arriving at this conclusion and making this statement, I wish it to be fully understood that I do not in any way undervalue the services of the Portuguese officers now employed in the Departments of Government. They are trustworthy and industrious public servants, and several of them have satisfactorily and faithfully fulfilled their duties for a quarter of a century and upwards.