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the colony without troops, if Her Majesty's Government should think it unnecessary to retain them for any other object; and I go further and assert most confidently that it would unquestionably be more to the advantage of the colony that they should be withdrawn, than that any such contribution as that fixed by the Duke of Newcastle should be enforced. His Grace proposes that the colony should pay in aid of the maintenance of 1.000 men in total idleness, as far as the colony is concerned, a sum equal to 201. per man or 20,000l. per annum, to be raised to a higher rate on a future occasion. If the troops were withdrawn, and supposing even the existing local forces were found insufficient, which I think myself unlikely, the contribution named would pay for an addition of 600 men and Officers to the local police force, who could be at all times employed in the service of the colony. I am desirous to press this question as to the necessity or otherwise of the troops for the security of the European inhabitants as forcibly as I can upon the Duke of Newcastle's consideration, because upon it depends the justice or injustice of His Grace's proposal, and if my opinion is not thought conclusive, I would suggest that those of the Executive Council, the Judges, the Magistrates, the Officers of Police, and the Chamber of Commerce should also be taken upon the subject.

22. I have not overlooked the argument used by you in the 6th paragraph of your despatch that Hong Kong cost the Imperial Exchequer no less a sum than 273,0001. for its civil establishment during the first 14 years of its existence as a colony, and that this large expense to the Mother Country would of itself be sufficient to impose on the colony the obligation of a substantial contribution from local funds towards the cost of the military defence of local interests. I entirely admit the justice of calling on all colonies to contribute as far as they can towards the cost of the military defence of local interests, but as I have before explained, I do not consider Her Majesty's troops are stationed in Hong Kong for any such object; and the cost to the Mother Country of establishing the colony imposes no obligation on the latter to meet a payment now which is not justly due. Besides, it must be remembered that the colony was established not for purposes of colonization or for the advantage of future colonists, but solely because it was considered it would be a convenience to the Mother Country on political and military grounds as well as a useful adjunct to the China trade, and the value of the colony as a political and military position has been abundantly proved by the result. I believe the possession of Hong Kong with its naval and military establishments, small although they were as a basis for assembling and organizing the last expedition alone saved the Government far more than the sum named by you as the cost to the Mother Country of bringing the colony through its first years of infancy. This will be easily understood by any one who watched the proceedings of our allies who had no permanent establishments nearer than Marseilles and who made that the base of their operations and attempted to organize there their expeditionary force, and to send it direct and complete from thence to the scene of its intended operations.

23. The exceptional character of Hong Kong as a watch tower keeping guard as it were over national interests with which it has only but a slight and remote connection has been fully conceded by high authorities who have looked into the subject.

In 1847, a Committee of the House of Commons reported--

"Nor do we think it right that the burden of maintaining that which is rather a post for general influence and the protection of the general trade in the China seas than a colony in the ordinary sense should be thrown in any great degree on the merchants or other persons who may be resident upon it.” This opinion had reference to the cost of maintaining the civil government, how much more forcibly then would the reasoning have applied to the maintenance of the actual garrison itself.

24. I find too in the "Report of the Committee on Expense of Military Defences in the Colonies (1860)," that Hong Kong although not specifically

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