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9. In the estimated revenue of 115,000., no account is taken of probable premiums on land sales, because, on the other side of the account, new public works are excluded from the expenditure. But if land be sold, new public works must be undertaken by the Government, as this forms one of the conditions of sale; and the one item, therefore, may fairly be placed against the other.
10. The expenditure of 105,000l., estimated above, does not include the establishment for the mint, which will probably cost in salaries alone 10,0001. a-year, because it is hoped that when the undertaking is once started it will be self-supporting. If it is not, it will be a failure, and should be stopped. How- ever, it may not prove self-supporting at the very outset, and in view of such a contingency, the available balance ought not to be reduced too low.
11. Such being the present financial position of the colony and its prospects for 1865, I confess that I cannot see where a military contribution of 20,000l. for next year is to come from. If it be insisted on, it can only be obtained either by the suspension of the mint works or by the imposition of a special military contribution tax. The former would, in my opinion, be most impolitic, and the latter alternative would, I think, be peculiarly hard upon the colony at the present moment; for I cannot help feeling that, even assuming the fairness of requiring the colony to contribute towards its military expendi- ture, the circumstances connected with the establishment of the nint entitle it at present to special consideration and exemption. The colony, at its own sole expense and risk is investing 50,000l. in an undertaking which will benefit largely British commercial interests throughout the East, and effect a direct saving to the Imperial Exchequer of not less than 37,5007. per annum. But the colony itself does not expect to derive any direct addition to its revenue from this large expenditure even if this scheme should be entirely successful; for it would be most unwise to attempt to levy any larger seigniorage than would suffice to cover the working expenses, and repay the cost of starting the undertaking.
12. It is doubtless more convenient that at this distance the proposed mint should be under colonial rather than Imperial control, and if it pay for itself it is of little importance in a pecuniary point of view whether it be an Imperial or a colonial establishment; but as the advantages anticipated from it are so much more Imperial than local, the advance of 50,0001., and the risk whatever that may be, are obligations which in strict fairness belong rather to the Imperial than the Colonial Government.
13. Besides, if in a colony like Hong Kong, where Imperial and colonial interests are so mixed up together, the system of "give and take" is to be no longer recognized, and mutual accommodation is, in such case, to be reduced to a mere matter of account, other questions, as pointed out by Mr. Mercer in his despatch, separate, of 2nd December last, besides military expenditure, will necessarily present themselves for adjustment, and it will not, I anticipate, be difficult to prove from the records of our courts and prisons that a considerable proportion of our large establishments for the administration of justice and for the custody of criminals is fairly chargeable to the Imperial Government.
14. These considerations are submitted as pertinent, even assuming the perfect fairness of calling upon the colony for a military contribution, but I should wish, in offering them, to guard against being supposed to entertain myself any other opinion on this subject than that submitted in my despatch of the 21st May last.
15. I shall hope for an early intimation of Your Grace's final decision on the subject of this despatch as the estimates for next year should be sent home from the colony not later than August next.
I have, &c.,
HERCULES G. R. ROBINSON.
His Grace the Duke of Newcastle, K.G.
&C.,
&c.,
&c.
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