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wall face in comparatively deep water, of two Admiralty quays to be reserved for the exclusive use of H. M.'s vessels; (iii) by the projection of a timber pier from one of the new quays into still deeper water for the accommodation of the Naval "shear-legs," and for the use of vessels of deeper draught; and lastly (iv) by the reclamation from the sea of an area containing 52,264 square feet, which will be added to the Yard, and which will afford most valuable sites for new naval work- shops or other buildings that may be required later, these 52,264 square feet of land, at the very low computation of three dollars a square foot, representing no less a value than $156,792.
7. As, according to the new design, the Praya Roadway will not be interposed between the naval promises and the harbour, but will pass over arches which will afford the freest access from the Yard to the water's edge, and as furthermore the roadway in question will be screened by a wall so as to preclude any possibility of the Yard being overlooked, it will be seen that the great improvements proposed, which will add so greatly to the importance and efficiency of the Naval Establish- ment, will now be obtained at no sacrifice whatever on the part of the Admiralty, and that consequently there is no longer any basis for the plea, which was pre- viously urged, that my Lords Commissioners should not be called on to contribute towards a project likely to destroy the privacy of the yard or cut off its access to
the sea.
8. It should further be mentioned that the rapid silting of the foreshore is likely, in the absence of the proposed embankment, to compel before long the expenditure of a large sum in either taking the Naval Yard down to the sea, or bringing the sea up to the Naval Yard; so that the saving of this cost is another substantial benefit to accrue to the Admiralty from the project in question; and under the circumstances, I venture to think, no more need be said to show how unjust it would be, that no contribution to the heavy expense of this work should be made on the part of a Department which so largely gains by it.
9. The amount of contribution ought I consider to be at least the value of the reclaimed land which will be added to the Naval Yard; e. $156,792; and even then the Admiralty would obtain for nothing the other very great advantages mentioned.
10. But strong as is the claim of this Colony for a contribution ou the part of the Admiralty, the case is very much stronger as regards the War Department. Your Lordship is perhaps aware that with the sanction of the Secretary of State for War, the local Military Authorities have it in contemplation to re-arrange and re-construct the greater portion of the Barracks, and other buildings in the canton- ments, with better regard to efficiency and economy of space, and to sell in the open market all such lands as they may no longer require under such new re- arrangement, the object being to raise by means of these land-sales the funds necessary to meet the cost of the proposed new barracks. The actual possessions of the War Department comprise about 104 acres, and it is intended to dispose of about one half of this area either by auction or by direct negociation with private purchasers, and the sale of these surplus lands, calculated at the lowest rates now ruling here for leasehold estate will bring in about one million dollars. But in addition to their present holdings, the Military Authorities claim the right to retain any sea reclamations in front of the cantonments that may be made under the present embankment project, and they look to these reclamations to add very largely in area and value not only to the ground which they intend to retain for future buildings, but also to that which they intend to sell.
11. The Military Authorities are right in attaching great importance to the embankment project, for it will add no less than 453,701 square feet of new land to their present holdings which if it was sold would realize at the
present market rates at least $1,325,856.
12. Looking to the enormous gain which will thus accrue to military interests from the project in question, not only in increased space for future barrack exten- sions but in actual money, any contribution on the part of the War Office to its cost would in iny opinion be most unfair to the Colony, if it were less than the actual expense of the embankment and reclamation in front of military premises. can I apprehend that the War Office Authorities will object to make this very reasonable concession when it is discovered how very largely they will gain by the undertaking.
Nor
13. For 1 am unable to conceive on what grounds any arrangement could be morally justified, by which it were sought to secure to the War Department possession of these immensely valuable sea-reclamations at the sole expense of the Colony. There is not a marine Lot-holder in Hongkong who, were he in the position of the War Department in this matter, would not eagerly come forward and offer to carry out the entire project at his own charges, even though the cost were far greater than that given in the enclosed estimate, in exchange for the privilege of retaining the areas reclaimed: and in support of the estimates of prospective benefits here given, I may state that they are based not on fancy or on mere opinions, but on actual business offers made in this Colony for marine properties of even less value. There is therefore no room for doubt that the War Office will obtain in return for an outlay of $320,000, (the estimated cost of its share of the work), land which, if sold would readily realize $1,325,856, thereby gaining a net profit of $1,005,856.
14. For that section alone of the North Barracks site, which is shewn tinted purple on the small fly leaf attached to the accompanying general plan, the Colo- nial Government would be prepared to pay the War Office at the rate of $3.00 a foot or a total sum of $263,700. This proposition must however form the subject of a separate Despatch to Your Lordship.
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15. Lieutenant-General CAMERON, who from the first has perceived the great advantage that will result to Military interests from the embankment scheme, has represented to his Department the justice of a substantial War Office contribution towards the cost of the works; and I am confident that the facts now before Your Lordship, which will no doubt be duly communicated to the Secretary of State for War, will have such weight with Her Majesty's Government as to relieve the Colony from any money payment whatever for the embanking of the Military lands; indeed I feel sure that a very bitter feeling would be aroused in the Colony if the Military as well as the Naval Departments should appear to take advantage of our extreme necessities, for obtaining better terms than the extremely favourable arrangement here proposed.
16. In connexion with the question of proprietary rights over foreshores, I must not omit to call Your Lordship's attention to the case of the proposed re- clamation in front of Marine Lot 22 (Commissariat Buildings), which stands on a different footing from the reclamations in front of the rest of the Military properties in the Cantonments. The latter are original Reservations made in the earliest days of the Colony, and vested in the old Board of Ordnance, which might be held to possess rights of ownership over foreshores, whereas Marine Lot 22 was bought by the Military Authorities from a private individual, who could convey to them no right of ownership outside his own boundaries. The claims of the Colonial Government to the foreshore in front of the Commissariat must, therefore, be borne in mind in any discussion that may arise in respect of proprie- tary rights, though I apprehend Your Lordship will waive those claims, and give the War Department the reclamation in question valued at $114,882, provided that Department should accede to the terms above proposed, viz.: payment of the whole cost of its share of the reclamation.
17. To prevent misconception hereafter it should be mentioned, that the precise cost of the works cannot be specified until after all details of design shall have been settled locally with the Royal Engineer Departament, and until a tender for the execution of the work shall have been accepted: but the preliminary estimates now put forward are reported by the Surveyor General as being sufficiently approximate to form the basis of any negociations with the Imperial Departments. Briefly recapitulated the cost of these works will amount to $691.000 of which I propose the Admiralty should pay at least $156,792, that the War Department should pay $320,000, if it desires to retain the lands reclaimed, that *Mr. SHARP should pay $21,000, and that the Colonial Government should defray the balance, i.e. $198,208.
*The actual terms in this case to depend to a certaiu extent on Your Lordship's decision as to what is to be required from Marine Lot-holder under Mr. CHATER'S scheme which is the subject of my despatch No. 234 of the 7th of August, 1888, and I am of opinion that a considerable premiu should be paid in addition in respect of this reclamation.