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the experiment of Bombay recruiting (though quite called for) has proved a failure as an experiment) has proved and that some other Expedient must be devised for organizing an efficient force- In the Bombay men the vice of Extortion was notorious and ingrained, and with a native body (Chinese) I fear the same results - Europeans of course cannot stand the climate especially with the grievous habit of intemperance to which they are almost invariably prone - At the same time I must state that Mr May, whose experience on this point is entitled to great weight and authority, differs from me in opinion, and thinks the Bombay experiment not fairly tried, while he condemns the proposal to try a new Chinese force-

Finance

However I am aware that this matter engages Your Excellency's attention, and I only allude to it here, as a review of the condition of Hongkong would be incomplete without touching on the much discussed question of Police efficiency.

As to its financial position the Colony has no cause to feel depressed. It is true that the large surplus Balance is being gradually diminished but with the Military contribution and the enormous Military Expenditure this is not to be wondered at. With some curtailment (undesirable I admit) in the Public Works and in some minor directions the Revenue of Hongkong should always meet the expenditure after the two heavy items just mentioned shall be...

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