9

under Colonial, rather than Imperial, control, and, if it pay for itself.

It is

of

little importance in a pecuniary point of view whether it be an Imperial

or Colonial

Establishment; but, as the advantages anticipated from it are so much more Imperial than local, the

advance

of

£50,000, and the risk,

whatever that

may

be,

are

obligations

which in strict fairness belong rather to the Imperial than the Colonial Government.

13.

Besides, if

in a Colony

like Hong Kong where Imperial & Colonial

interests are so mixed

up

together,

the

system of "give and take" is to be

no longer recognized,

and mutual accommodation is

in each case, to be reduced to

a mere matter

of account,

other

questions, as pointed out by Mr. Mercer in his despatch of

2nd December last, besides

Military Expenditure, will necessarily present themselves for adjustment, and it will not, I anticipate, be difficult to prove from the records of our Courts and Prisons, that

a considerable

proportion of our large Establishment

for

the administration

of

Justice

and

for

the custody of

Criminals,

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