The Dispatch letter above referred to.

and

addi

18.

ŝi and comparatively safe conditions, a vent under worst conditions would have been the result of inaction, it is very probable that, as a member of the Social Science Association, he might have subscribed to a remonstrance of the kind sent to the Secretary of State.

COLONIAL SECRETARY'S OFFICE, HONG KONG, Oct. 20, 1868.

1. The attention of his Excellency Sir Richard Graves MacDonnell has been recently called to a memorial addressed by the Standing Committee of the Social Science Association to his Grace the Secretary of State for the Colonies, praying that an immediate stop should be put to the system adopted here of permitting gambling in certain houses licensed by Government and subject to police surveillance.

2. In paragraph 5 of that memorial, the following passage occurs:-- "Since the summer of 1866, when the first Ordinance was passed, the farms had been created by the local authorities, put up by them to sale, and granted to the highest bidder."

3. That assertion is not merely incorrect, but is even totally opposed to all the details fully given in a series of despatches which must have been at the time before the committee, because they allude to and quote from them. The Governor, therefore, is persuaded that the committee will at once ensure to this contradiction as wide a publicity as to the original misstatement.

It is possible under such circumstances that, like those who committed the mistake, he might have regarded the policy pursued at Heligoland and Baden, and here, as identical. Gambling, he might have reflected, is permitted at all those places, and a revenue results therefrom in each. Such a policy is indispensable at Baden and Heligoland, where unnecessary suffering would otherwise occur or at least decline. Therefore, he might perhaps have argued it is equally indefensible at Hong Kong. Nevertheless, no one here would pretend that there is the remotest chance of the vice of gambling being diminished by the suppression of the licensed houses, as would be the case at Baden. It would simply become more widespread and require more police interference, however little, there would inevitably be more extended corruption and consequent insecurity to the community.

4. It is true that the mischief caused by circulating an incorrect version of actual facts, especially when so framed as to support the argument of those who use such a weapon, seldom admits of any adequate reparation. No acknowledgment of such wrongful proceeding, particularly as must be the case here, when not extracted till months subsequently, and perhaps after the close of the discussion affected thereby, can undo the mischief which it may have caused. Nevertheless, the right of the party misrepresented to require even inadequate reparation is indisputable.

5. In the present case, it must be conceded that this Government has been most completely misrepresented on the very point as to which it was easiest and most unfair to excite popular prejudice. To speak of this Government as selling the licences in question to the "highest bidder" is to imply that it was animated by a sordid motive of greed.

6. Such a statement is a very extraordinary misrepresentation of facts recorded in documents to which the committee refer and had access. All Sir Richard Graves MacDonnell's despatches in connection with the subject to the end of last April were before the committee, having been presented to the House of Lords last June.

7. It would be idle to repeat here the various details given in those despatches as to the anxiety of this Government to deal with a great public evil without reference to the question of revenue. The committee can refer to them if they wish, but I am instructed to beg their special attention to paragraph 8 in Sir Richard Graves MacDonnell's despatch (No. 439) of the 30th of last January, as follows:---

"Your Grace, however, is sufficiently aware that this Government has not been swayed by any desire of gain. On the contrary, I have never written a despatch in which I have not regretted that a policy justified by necessity should be encumbered with any pecuniary gain, for the latter affords to opponents of that policy an opportunity to impute to myself and my council motives the reverse of those by which we are animated. If mere addition of revenue had been our object, I should not have accepted $52,000 dols. as the annual licence fee instead of upwards of $60,000 dols., which was actually offered, nor would I have gradually reduced the original $60,000 dols. to $04,000 dols., at which it stands during the present month."

8. The above plain statement completely disproves the assertion of the committee that, since 1866, the licences "had been put up to sale and granted to the highest bidder," and I am now further instructed to add that not merely had $60,000 dols. been declined, but that by consecutive reductions, the licence fees had been lowered till a few weeks back they reached only $56,000 dols.

Even that reduction was less than his Excellency had hoped to effect, for as more fully explained in his recent financial statement to the Legislative Council, an extract from which is appended hereto, he was prepared (Par. 19) to make any reduction necessary to compensate the licensees for excluding all but Chinese from the play houses--a reform now most effectually carried out.

10. Reasons alluded to in the accompanying appendix, and more fully explained in the Governor's communications to the Secretary of State, have produced for the moment the unexpected result of an increase of licence fees just as the frequenters of the licensed houses were diminished.

The licences beyond the amount necessary to work the system as a strictly police measure, a motive which it is not pretended to adduce in favour of licensing gaming in Europe.

14. Again, only natives, who are practically beyond the reach of the law, are allowed to cater to the licensed houses, and unless it be shown that Europeans are similarly excluded at Heligoland, and that gaming is only permitted there to an overwhelming majority of Orientals, or strangers coming and going in numbers exceeding 600,000 every year, and that it is only allowed "because they cannot otherwise be efficiently reached by the police," no parallel is established between that place and Hong Kong.

15. Finally, to complete such a parallel, it would be further necessary to show that the authorities at Heligoland had been exerting themselves as here from the first to keep down any revenue accruing from the licences.

16. It may therefore be as well to speak frankly and declare at once that the only argument in the memorial of the committee which seems to his Excellency deserving of notice is their suggestion (par. 9) that the authorities here have not as yet so exhausted the direct means at their disposal for the suppression of gambling as to justify a departure from the general principles of penal jurisprudence elsewhere.

17. It is difficult to imagine where the committee got their information as to the entire suppression of gambling in Chinese cities by laws establishing tithings and hundreds, &c. Gambling has been now and then stopped in a particular place for a short time by high officials, who were guided sometimes by upright and sometimes by corrupt motives, such as that of raising the toll on an illegal luxury. This, however, has been done by extreme severity, such as razing houses to the ground and torturing the landlords, measures to which, it is true, this Government has never yet resorted.

18. At this moment, the police system inaugurated by his Excellency amongst the Chinese--an institution quite apart from that of the colony--is working admirably, but the last thing which a resident here could dream of would be the handing over to any Chinese, whether in tithings, hundreds, or otherwise than as parties directly and openly interested therein like the licensees, the slightest control over their gambling brethren.

19. His Excellency is unable to follow the reasoning of the committee in the other portions of par. 9 of their Memorial because he can only state as the general result of the most determined efforts on the part of himself and all his subordinates that, whatever might have been the varying nature of his expectations from time to time, he has long been convinced of the impossibility of putting down gambling by any police which it is possible to procure here, or even with the best police in the world, if they could be procured, and were stationed six deep here.

20. Sooner than recur to the infamous past, his Excellency would prefer legalising gambling of all descriptions in the colony, which is the only alternative that he thinks practicable, but he has steadily declined to bear a part voluntarily in continuing the sham which the committee unwillingly recommend.

11. It is perhaps superfluous now to accumulate further evidence of the inaccuracy into which the Social Science Committee have fallen as to a matter of fact when they represented this Government as selling the licence monopoly to "the highest bidder." The Governor, however, wishes to record at the same time his conviction of the excellent objects of the committee and of the general body which they represent.

12. The personal feelings and sympathies of his Excellency are entirely with the committee, and had he never visited China, nor been compelled by his duty to this community to deal on the spot with the unquestioned and real evils arising from the inordinate love of gambling of the native population here, and the absolute necessity for checking it.

The appendix alluded to consists of paragraphs 12 to 22 of the Governor's Financial Statement for 1869.

21. It is easy for the latter to say that the honest policy now followed detracts from the free and noble institutions of the colony, "which were one day to stand as a model to work the regeneration of the Chinese Empire." Do the committee seriously think that the shrewd natives of China respected this Government a whit more, either for its intelligence or its efficiency, when the laws of the colony merely rendered an irrepressible vice more dangerous and odious, whilst it brought to light the venality of the paid guardians of the law?

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