No. 107.
457
No.-28.
HONGKONG.
DESPATCHES ON THE SUBJECT OF THE MILITARY CONTRIBUTION.
Laid before the Legislative Council by Command of His Excellency the Governor.
GOVERNMENT HOUSE, HONGKONG, 21st April, 1896.
Enclosure 1.
SIR,
I have the honour to forward the enclosed memorandum from the Unofficial Members of the Legislative Council on the subject of the Military Contribution, and to submit the following observations on the several points raised by them.
2. The position assumed by the memorialists in paragraph 1 of their memo- randum is, in my opinion, untenable and calls, I think, for no special remark.
3. As regards the contention in paragraph 2, the Unofficial Members seem to forget that no monies are paid away in respect of the Postal Service except for services actually rendered. It seems to me erroneous to maintain that the revenue collected on behalf of the Imperial Government or of the Postal Union brings no profit to the Colony. Without the services of the Imperial Government and the Postal Union, which are paid for by this revenue, the Postal Service would either come to a standstill or the Colony would have to make direct arrangements for the performance of those services, which might be a less economical method than that which at present exists. This part of the expenditure is, in fact, just as necessary to the service as the salaries of the Post Office staff. At the same time it appears to me that there are strong reasons why the entire portion of the revenue which is expended on the Postal Service should be exempted from the Military Contribu- tion. That service is one of the few commercial undertakings which are now controlled and managed by Government on behalf of the public, and I believe that it is generally recognized as a fundamental principle that, so far as is possible, only so much profit should be derived from a postal service as is necessary to meet such extensions and improvements as may be required from time to time in the service itself. Any profit derived from the service, except when so applied, constitutes a special tax upon that section of the public which makes use of the service, from which the remaining portion of the community is exempt, while a deficit is equivalent to a tax upon the whole community for the benefit of one por- tion of it, viz., those who send and receive correspondence through the Post. This is so manifestly unfair that tariffs are invariably so arranged as to guard against such a possibility, with the result that the profit may be and frequently is considerably in excess of the amount required for improvements in the Postal Service, the balance going to swell the general revenue.
A deduction of 17 per cent. from such revenue as might be raised to meet a deficit would constitute a tax on general revenue and therefore from the present point of view would be unobjectionable, but this case is not likely to occur in practice.
The Right Honourable
Mr. JOSEPH CHAMBERLAIN, M.P.,
Her Majesty's Principal Secretary of State for the Colonies,
SC.,
sc., Downing Street,
London.