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.
23. Whether I myself, or the Council, or a portion of the community approve or object to the receipt of any income from such a source, the fact that it has nevertheless irrepressibly thrust itself into and may for some time constitute part of your annual Revenue till a better system be devised to accomplish equally useful results, entitles the Council to the fullest details connected with it.
24. Such a Revenue therefore is a necessary item in your financial calculations simply because it exists, and therefore must be dealt with in some way, but it does not follow because you must deal with it, or because it exists, that your object has been to create such a Revenue. That is a common misrepresentation of the purpose of myself and my Council, but it can have no logical force till it be shewn that our object could be equally well accomplished in some other way unproductive of Revenue with which we are acquainted and which nevertheless we refuse to adopt.
Appendix D.
25. It probably answers however the purpose of those who use the argument and who know very well that most people take no trouble to master the tedious details of a complicated question, but as a general rule accept the popular theory that all who adopt a policy which creates a Revenue, do so for the sake of that Revenue. Such an inference holds good in most cases because money is the most general object of men's pursuits, but in what way such a theory can be applicable to myself or my Council is not shown. To make the argument conclusive we should be proved interested in drawing a Revenue from Gambling Licenses, whereas none of us can have the slightest possible interest in the matter beyond our desire in discharge of a duty to the Public to choose the least objectionable evil, whilst personally I prefer to raise by increased taxation whatever additional Revenue may be wanted for purposes that cannot be dispensed with.
26. I have only to add before quitting this subject that current ideas as to the abstraction of large sums from regular commerce by either losses or gains at the new play Houses have little or no real foundation. The probability is that in former times there was quite as much play as at present, whilst whatever be the profits now they are acquired by men of substance engaged in general trade and are only so much added to their commercial capital. The Fees paid to the Colony are also destined to aid rather than impede progress unless they be unwisely expended.
27. The other new Branch of Revenue, viz. that derived from Stamps, has been estimated at $100,000, but I apprehend that the receipts from this source may fall short of even that limited amount. The Return which I lay on the table shews that the alteration effected by the recent Ordinance, No. 7 of this year, has hitherto not materially affected receipts from Stamps but the general stagnation of trade has obviously an unfavorable effect on Revenue derived from the number and amount of business transactions. As however the Ordinance appears to work at present with as little inconvenience to the commercial community as can be expected from a Law imposing a new tax, I am unwilling to expand its operation so long as the finances of the Colony do not require such aid more imperatively than at present.
28. I shall not detain you longer with details affecting the Revenue side of the proposed Estimates except by calling attention to a slight diminution in the receipts expected from the Harbor Department. This arises from the lower scale of fees exacted now under the Harbor Ordinance of 1866, and not from any expected decrease in the number of Vessels frequenting the Port. It never has been the desire of Government to make a surplus Revenue from that source, and the success of the Ordinance in removing from the Colony the most dangerous characters, and Pirates, permits now some relaxation of the restrictions hitherto maintained over the movements of Native Craft in the waters of the Colony.
29. Turning now to the Expenditure side you will find that notwithstanding the efficiency of every Department is provided for more effectually in the Estimates before you, than had ever before been contemplated, there would appear to be a decrease on your estimated Expenditure, $828,000 for 1869, as compared with that originally proposed for this year, viz. $894,000.
30. On Public Works and Buildings it is proposed to expend no less than $155,500 as compared with the $65,500 which H. M. Government finally sanctioned for the current year, which latter amount however will probably be exceeded.
31. The expenditure on Roads, Streets and Bridges, however, is diminished from $105,000 to $69,000, but includes once more $23,000 for the Road to the Gap, which has already appeared more than once on your Estimates, but never
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