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2.

I am of course unable to express any opinion as to the views entertained on this subject by Sir John Bowring who is at present in England; but I gather from enquiries here that it was never understood in this Colony that this grant was given conditionally, subject to there being a deficiency in the revenue.

It appears rather to have been looked upon as a contribution from the Imperial Treasury towards the creation of a Sailors' Home and Hospital upon a larger and more expensive scale than would have been required for purely local purposes, in consequence of the large number of prisoners and distressed British subjects sent to the Institutions here from the Several Consulates in China.

3.

The grant of £2,000 for the Hospital has all been expended, and as I have directed the works at the barrack to be urged forward with the utmost despatch, the greater part of the £5,000 grant will also probably be expended before the close of the present year.

4.

I may add that the Hospital when completed will cost not less than £5,000, and the extension of the barrack is estimated at over £30,000.

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