This excess expenditure appears to me very considerable in amount, and on examination of the items of which it is composed I have been surprised to notice with respect to how few of them was my sanction requested during the course of the year. With the exception of the expenditure incurred in connection with the Smallpox Hospital & that in consequence of the Typhoon I do not fail to perceive that there were any matters of urgent necessity which would warrant the Local authorities in departing from the rule which governs the administration of the finances of all Crown Colonies & must be well known to the officers of your Government, viz that the previous sanction of H. M. Govt is as far as possible necessary in all cases of increased expenditure. In his despatch No 5 of the 8th of January 1870 my predecessor, without altering the practice which prevails in Hongkong of not passing the Supplementary Estimates and Appropriation Ordinance until after the end of the year to which they relate suggested the introduction of a system by which the Council would be in quasi-permanent session so that supplementary votes might be taken provisionally at any period of the year.