recognised.

Sw. 2/2

These Estimates being drawn up in the Model (Enclosed in Circular 47th 1401) to deal with, but we should point out that in one respect the Instructions in that Circular have not been completely followed, viz. par. 19 which directed that Temporary offices & offices filled by persons ineligible for the ordinary superannuation allowance should be distinguished. This was formerly done by separate columns but it will be simpler to distinguish them by printing them in italics with a note to explain the italics.

The Revenue figures are satisfactory showing a slight increase on last year's Estimate of $670,000 and an increase of nearly $130,000 in 1889 with no material falling off.

These columns & the Model have been suggested in case something like excluding Receipts and Premia. There is a note under my hand about it.

The first proposed Estimates would have involved a deficit (after using up all the Balances) of $100,000, see Inc. 12, but the Council cut these down, and the Estimate has passed with leave to a small Balance of $10,000 at the end of this year.

It has long been expected that a Loan would be necessary to carry out some larger Public Works required at Kai Tak, but it was decided to use up Balances first.

Excluding extraordinary Public Works, the mere Expenditure shows an increase of $200,000 on last year. This is largely accounted for by (1) the increases of salaries already approved involving about $447,000 (2) the increased Military Contribution involving about $95,000.

As to the general scheme of increased salaries, the four other cases referred to in par. 2 of despatch 1123/40-1 have been sanctioned & there are only a few special cases to be settled. Sanction the increase to the Chinese members of the Fire Brigade referred to in par 3 of despatch, but say that the distribution of their extra...

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