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It will be seen that the total strength of the corps has decreased in the past year. I attribute this to the cessation of hostilities in North China; but I consider that the corps is in every other way, except in the matter of numbers, more efficient than it was a year ago, many of those members who have resigned having been of little or no use to the corps, and I hope that, in the coming season, a still greater improvement will be seen.

C. G. PRITCHARD, Major,

Commandant, H.K.V.C.

(Signed)

APPENDIX II.

(Confidential.) Sir,

Government House, Hong Kong, November 25, 1902.

I HAVE the honour to transmit, for your information, the enclosed copy of a letter from Major-General Sir W. J. Gascoigne, dated the 27th of last May, together with the attached enclosures, concerning the reorganization of the Hong Kong Volunteer Corps as a garrison artillery corps, with one engineer company.

2. The proposed reorganization entails no additional expense on the Colonial Government over and above what is provided for in this year's Estimates, and I have no doubt that the reform is thoroughly sound. Accordingly, I considered the question in Executive Council on the 14th and 24th ultimo, and, with the unanimous advice of my Council, approved the new Regula- tions for the Hong Kong Volunteer Corps, of which I enclose copies.*

I have, &c.

(Signed)

The Right Honourable Joseph Chamberlain, M.P.,

HENRY A. BLAKE, Governor, &c.

&c., &c., &c.

Sir,

Enclosure.

Letter of General Officer Commanding.

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Hong Kong, May 27, 1902.

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I HAVE the honour to forward the attached correspondence for your opinion. The proposals therein contained virtually amount to this:-

1. That the Hong Kong Volunteers consist of garrison artillery and one engineer company.

No infantry;

2. That the artillery portion should be trained in certain of the forts of the island under the general direction of the C.R.A.;

3. And that, similarly, the engineer portion should be trained in the management of certain of the lights, &c., under the general direction of the C.R.E.;

4. That both of the above units should, on reaching a given standard of efficiency, receive an annual bonus (amount to be settled subsequently).

With reference to the above, there is no doubt but that the corps would, under these circum- stances, be of vastly more practical utility than it is at present.

But other questions are involved. If a money bonus is given, they contract to give a certain amount of work in return. They therefore lose a certain portion of their purely volunteer character, and it would become a question whether they should not be held to serve for a certain term, as the right of resignation at will under these circumstances might be objec- tionable.

Whether these conditions would be acceptable generally to the volunteers is questionable, and it is also a matter of question whether this extra expense involved would be acceptable either to the Colony or to the Secretary of State for the Colonies.

And it is difficult to form an opinion without discussing it, and this I have been as yet, naturally, unable to do with the volunteers. I therefore submit this letter to you in the hope that it might be laid before the Council for discussion.

I have, &c.

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(Signed)

The Honourable the Colonial Secretary

(In the absence of his Excellency the Governor, Sir H. A. Blake, G.C.M.G.).

W. J. GASCOIGNE, Major-General,

Commanding in China and Hong Kong.

* Not printed.-Sec. C.D.C.

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