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Under these circumstances, and while the proposed increase in salaries was under consideration of the Secretary of State for final approval, the Unofficial Members of Council by telegram and by letter entreated his Lordship in the then generally unsatisfactory condition of the Colony to withhold his sanction from the proposed increase, and allow the whole matter to stand over until it was seen whether the Colony could or would recover from its then state of financial and general depression. The payment of the enhanced rates of salary in the Colony was actually suspended for nearly six months pending the result of this appeal to the Secretary of State, and the Civil Servants were expressly warned by the Governor that if payment was made it would be only for the year, and that the whole question of salaries was open for reconsideration and revision in the next and following annual Estimates. Lord KNUTSFORD finally directed the payment for 1891 of the increased rates of salary, on the allegations that house rent for Europeans had increased from 100 to 150 per cent., and for Chinese 100 per cent, Distinct official caution was given to the officers concerned that it was not to be looked upon as a permanent increase, but as an increase that was open to reconsideration and reduction in the next or any following year, if there was no improvement in the financial condition of the Colony.
5. This being a brief history of the question of the increase in official salaries, can it be maintained, as it has been, that the Civil Servants have a vested interest in these increased salaries and that the Unofficial Members are guilty of a grossly inequitable attack on vested interests in moving now for the reduction of these salaries to their former level? We submit that it cannot be so maintained. The power to re-examine and re-adjust them if necessary was specially reserved, and the recipients were officially cautioned that they were not to look upon the increased salaries paid in 1891 as a permanent improvement.
6. Is there any justification now for the present endeavour to reduce the increased salaries to the 1890 level?
(a) The three causes, referred to by Sir G. W. DES VEUX, viz., restrictive legislation against Chinese in Australasia and America; the increased cultivation of the Poppy in China, which diminishes our Opium Imports; and the decline in the Export of Chinese Tea, owing to the competition of India and Ceylon, are still causing the Colony to suffer more largely and more severely than before, and whether any improvement can be looked for in the immediate future is extremely doubtful.
(b) Land has not improved in value; it is lower now than it has been for a number of years; and Land Sales have fallen off. It is improbable that the value of Land will improve for some time to come, as we are already largely over-built generally throughout the Colony, and the Reclamation of new land, along the Praya central westwards from the sea, will be available for building purposes sooner or later.
(c) Is the general trade of the Colony either amongst Chinese or Europeans profitable or even satisfactory? Undoubtedly not. Here (as in many other places) it is bad, and has been for the last two years, probably worse than at any time in the Colony's history. There has been, unfortunately, continued general commercial and financial depression, apprehension, anxiety, and suspense; there is a general want of confidence, credit is seriously contracted, and several of the most respectable and oldest established of our mercantile houses have, under the strain of continuous heavy trade losses, collapsed, while the violent fluctuations in Exchange and the unprecedented decline in the gold value of silver have been the chief factor in bringing about the fall of the oldest Exchange Bank in the East, as well as largely contributing to the collapse of another Banking Institution whose Banking Assets recently were upwards of Ten and Three-quarters Millions of Pounds Sterling.
(d) The trade of the adjoining Province, Kwangtung (Canton), has not shewn any increase in the first nine months of 1892 as compared with the corresponding period of 1891; on the contrary, the Chinese Customs Revenue shews a decrease of almost ten per cent., or over Taels 415,000. The published Returns of the Chinese Imperial Maritime Customs give:---
Revenue for the first nine months of 1891....Taels 4,244,994.24 Revenue for the first nine months of 1892,... 3,829,906.57
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The decrease for the first three quarters of 1892 as compared with the same period of 1891, at Canton being over 5 %, at Lappa (Macao) over 15 %, and at Chinese