# APPENDIX
Extract from Financial Statement, (October, 1868.)
By His Excellency SIR RICHARD GRAVES MACDONNELL, C.B.,
12. Before concluding the subject of Revenue I call attention to the fact that the fees from the Licensed Gaming Houses are now withdrawn from the heading of unavailable deposits. I lay before you the despatch of the Secretary of State authorising application of that Revenue to certain Colonial purposes—and till some means of obtaining equal control over the classes addicted to illegal Gaming with all its evil consequences to the community can be devised, it certainly seems wise to use it for the improvement of the Police force which is mainly required to repress irregularities and crime, originating in or fostered by Gambling. It is at least wiser to devote it to that or other useful public objects than to throw it into the sea or get rid of it in some more objectionable manner on the plea that no Revenue should accrue from such a source.
13. My creed on such matters is a very simple one. I hold that a Government is bound to do as much good and suppress as much evil as it can. I have therefore not hesitated to advance straight forward towards that object. I have never been deterred by the secondary consideration that a Revenue was unavoidably created thereby, whether I liked or disliked that result, nor have I been persuaded by the reasoning, if I may use such a term, of some estimable persons who appear comparatively indifferent to the existence of a Public evil, provided their own theory that we should leave sin and vice alone prevails.
14. Such persons, if they pursue their argument to its legitimate conclusion, must be prepared to see our Navy and Army decimated by a disease which Legislation can mitigate, sooner than meddle officially with what they call sin in the one case, or vice in the other, and thus they would leave both to mature and fructify—the pestilence to spread and this City to be infested by illegal Gaming haunts frequented by the criminal classes with the usual results to society of such assemblages. Moreover, they seem to apply their theories to all parts of the world and to all populations alike. They would govern the Saxon race of Kent and the Chinese on the same principles, and would think it wrong to meet the exigencies of each separate community with Legislation adapted to its local requirements.
15. I need scarcely say that no such policy has been countenanced by this Government. On the contrary, I and my Executive Council have from the first felt it a positive duty to admit the existence of the two evils alluded to and frankly acknowledge that we cannot suppress them. We feel, consequently, more especially bound to exert ourselves to obtain a practical control over evils which we have not the power to eradicate, and thereby at least try to alleviate the mischiefs inseparable from each. I am therefore gratified to report that not merely has the new system been successful in closing the old dens of iniquity and substituting for them Houses regulated by strict Government surveillance, but also that there is strong reason to infer, contrary to the prophecies not unnaturally indulged in at first, that the system has reacted beneficially on the parties more immediately reached by it.
16. Thus, contrary to general expectation, and far exceeding any hope of my own, you will find from the Return, which I now lay before you, that the crime which seemed most likely to have increased is that which has most diminished, namely, Larceny amongst servants. During the first quarter following the opening of the Licensed Houses the number of those cases brought before the Police Magistrates averaged the same as in the preceding Three years, viz., about 80, whereas during the first quarter of this year they had diminished 50 per cent, and during the second quarter 75 per cent.
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17. Recently all Foreigners have been excluded from the Licensed Houses, because the argument that licensing a few Houses had been found essential to obtain control for Police purposes over a vice amongst the Chinese—which after the most vigorous efforts the Executive could not suppress—is not applicable to Foreigners, and therefore affords no justification for permitting them to use the Licensed Houses, as it is not Foreigners who constitute the criminal classes of the Colony. There is no risk, therefore, of their Gambling tendencies leading to the establishment of illegal haunts where Burglaries and Robberies may be planned by those who meet in such places in defiance of the Law.
18. I must add that, although it is true the Houses were originally licensed without any intention of encouraging Foreigners to go there, I am nevertheless now surprised that it did not sooner occur to me to rid the licensing system of this its least defensible feature, and it appears strange that no one else, so far as I am aware, made the suggestion earlier.
19. When I had once become convinced of the propriety and saw the possibility of excluding Foreigners, I was quite prepared to make the most liberal abatement to the Licensees of the fees which they were then paying, viz: $13,000 per month. I would willingly have reduced them to $10,000 or $8,000 or to any other amount which might be proved necessary to compensate them for the loss entailed by the exclusion of Foreigners. Just then, however, the close of the first year of the operations of the Licensees was approaching, and some disputes unexpectedly arose between them and their agents when settling accounts, which led to the discovery that, so far from losing, as they had endeavoured to prove, they had, through the many reductions which I had made in their fees, been gainers during the past year to an extent beyond the legitimate amount which the exigencies of the system justified. At the same time, offers were made to Government to take up the business by men of equal capital, and one offer based on most excellent security and with the understanding that Foreigners were to be excluded, amounted to $240,000 per annum.
20. Nevertheless, the experience acquired by the old Licensees, their readiness to expend money in detecting returned convicts and the effective assistance which they had given the Police generally, made me unwilling to change them for parties less experienced. The old Licensees, therefore, continue the business, but instead of a reduced fee of $10,000 per month they pay a fee of $18,000.
21. Thus one more is added to the numerous list of unexpected and improbable results, which the working of the experiment has developed. In fact, my own despatches on the subject are throughout filled with similar reversals of previous calculations, and perhaps I am now about to add one more to the series, when I express the opinion that, if Foreigners be excluded, as under any circumstances must be the case, the fee of $18,000 per month will not leave the Licensees a sufficient profit to make them as careful as is requisite to retain it by attention to the Government Regulations.
22. These explanations, which moreover have a special interest of their own, have become necessary, because the Council should know why the License Fees for the Estimates of the ensuing year are not computed on the basis of so high a figure as they now reach monthly. On the contrary, the Estimate of the receipts for 1869, has been left by me at $156,000 per annum, being the amount computed when the calculations were entered into several weeks back.
At present the probability is that the amount named will be exceeded, but the uncertainty attending the subject is too great to justify an alteration of the original Estimate.
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