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be properly fixed at 20,000l. per annum for five years, commencing on the 1st of January 1865. At the expiration of these five years the amount will be subject to any revision which the altered circumstances of the colony may require.

9. It had been my intention that this contribution should have come into operation from the 1st of January 1864, but bearing in mind that the Council may possibly have had under their consideration the estimates of revenue and expenditure for that year before the receipt of this despatch in the colony, and that the establishment of a mint, to which I have adverted in another despatch, will cause a considerable charge on the revenues of the colony, I have decided that this demand on the part of the Imperial Treasury shall be postponed until the year 1865.

10. I have, however, thought it better to make this announcement to you at once, in order that you may lay this despatch before your Council for their consideration, on the chance of the estimates being still before them, and that they may thus be made aware how necessary it will be for them to enforce a strict economy in their expenditure, and may not vote moneys for new works without the clear prospect of having ample funds to complete them.

11. It will hereafter devolve upon Sir Hercules Robinson, with whom I have been in communication, finally to deal with the question in concert with the Council.

12. For the present I am desirous not to press too heavily at first on the colonial revenues, and thus possibly to retard works of public utility, for which besides the large balances in hand a sum of 15,000l. or 20,0001. per annum would probably remain available.

I have, &c.,

NEWCASTLE.

The Officer Administering

The Government of Hong Kong.

P.S. Since writing the above I have received your despatch No. 128, dated the 9th of July last, transmitting the Hong Kong Ordinance No. 7 of 1863, together with the Estimates for 1864.

No. 4.

Copy of Despatch from the Acting Governor of Hong Kong to His Grace the Duke of Newcastle, K.G.

(No. 199.)

My Lord Duke,

Hong Kong,

10th November 1863.

I have the honour to acknowledge Your Grace's despatch No. 115 of 5th September last, announcing that from 1st January 1865 this colony will be charged with 20,000l. per annum on account of military expenditure.

I observe that Your Grace only contemplates my placing this despatch before the Legislative Council in the event of the Estimates for 1864 being still before them, and that it will devolve on Sir Hercules Robinson to deal with the question finally.

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