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Government should defray the cost of creating buildings for the Admiralty, not that of reclaiming the site, nor the portion thereof which is now covered with water.
You quote in support of your high estimate of the value of the site of the Naval Yard on Hongkong Island, the price recently paid by Government for a site near the Central Bazaar. Land at the Naval Yard has, however, been recently purchased by the Military at a much lower figure, in order to get rid of all Chinese tenement houses in that locality, and if the proposed exchange were effected, the site of the Naval Yard could never be sold for the creation of Chinese dwellings thereon. It would not, therefore, realize, if so much, the value of the land recently acquired in that neighbourhood by the Military.
4.
In conclusion, I have to inform you that application has recently been made to Government for the sale of a portion of the land at Kowloon proposed in exchange. As the Admiralty have requested that the refusal of this site might be given to them, in case any proposal were made for its sale, I lose no time in giving you notice of this application.
I have,
(Signed) M. H. Marsh