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accompanying the letter under reply. His Excellency is prepared to sanction the liquidation of the liabilities thus incurred without authority by the Building Committee upon these distinct grounds: (1) that he understands a considerable proportion of the excess is already due either to the Contractor or to the Committee who have advanced the money from private funds - an arrangement which His Excellency cannot too strongly object to, and which he begs may never recur; (2) that he understands this further outlay is absolutely necessary to prevent not only the work being left unfinished, but serious damage to the portion already completed.

His Excellency desires that in future due notice be given when an Estimate is likely to be exceeded.

It must also be distinctly understood that this expenditure can only be sanctioned on the understanding that works to an equivalent amount provided for in this year's Estimates are abandoned. This can easily be done, for only $20,000 is estimated for premiums at Kowloon; $35,000 has been voted for public works there, and His Excellency does not wish to expend upon Kowloon.

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