tion was fixed. Her Majesty's Government, however, do not propose that the contribution should now be increased in the same proportion, and will only call upon the Colony to provide £41,000 a year for each of the three years 1891-2, the Colony bearing in addition the cost of any militia and volunteers which it may raise, and the contribution to be paid after 1892 being subject to re-consideration during these three years.

The concluding sentence of paragraph 8 is:-- "And in now informing you of the amount which Her Majesty's Government demand from the Colony as its contribution to the increased Garrison, I desire to draw your attention to the following considerations, which have been duly weighed before that amount was determined."

I would also quote from the report on the Blue Book for 1889 written by the Officer Administering the Government during your Excellency's absence.

The military contribution so-called was in 1889 the same as in former years, viz. £20,000 a year, although it has since been increased, under the instructions of the Imperial Government, to double that amount, on the assumption that the garrison is to be considerably enlarged.

The increased contribution was voted by this Council last year (entirely on the ground stated by Lord Knutsford, namely, that the proposed increased garrison would necessitate increased expenditure), and the vote was associated with and accompanied by certain resolutions, which were also unanimously agreed to by the official and unofficial members. As soon as the Imperial Government perform their portion of the agreement, this Colony will readily execute its part.

With your Excellency's permission, I will read the resolutions that were passed:

1. That this Council, while recognising the justice and fairness of the demand made upon the Colony for an addition to the Military Contribution, desires to place upon record the fact that the vote authorising the additional payment has been passed by the unanimous voice of the members, official and unofficial, in the belief that the proposed increase in the strength of the troops stationed here is essentially necessary for the safety of the Colony, and with the full assurance that the force named in the appendix to the Secretary of State's despatch of the 20th January, 1890, 3,018 men of all ranks, of whom 2,525 are to be Europeans, will be present in the Colony within the year, and will be retained here.

2. It is the unanimous hope of this Council that as the additional moneys voted have been asked for and granted as the Colony's contribution to an increased garrison, and principally, if not entirely, because of the proposed increase, no demand will be made by the Imperial Government for the payment thereof until the strength of the garrison has actually been raised to the full extent of the figures in the Secretary of State's despatch, and that, if any additional payment is demanded before that point has been reached, it will be proportional to such increase as shall from time to time be made in the force stationed in the Colony.

3. That in the opinion of this Council, the attention of the Secretary of State should be directed to the fact to which no reference is made in Lord Knutsford's despatch of the 20th January, 1890, that the Military Department has in the occupation of rather more than 337 acres of land in this Colony, of which 84 acres are in the City of Victoria; that these 84 acres are situate in the very centre of the town and are, at the very lowest, of the value of Three millions of dollars, representing a revenue in the shape of Crown Rents and taxes of $35,000 a year lost to the Colony, and that this being so, it is earnestly hoped that no further demand will be made on the Colony in respect of Barrack Expenditure, referred to in paras. 20, 21, and 22 of the despatch above-mentioned, at all events unless the land in the centre of the town be given up by the Military Authorities, or, as has been suggested, in exchange for other sites nearer the batteries.

There is also a paragraph in the despatch of the Officer Administering the Government of last April which I would like to quote, paragraph 9, which says:--

"I trust that your Lordship will not fail to give due consideration to the statements contained in the 3rd of the enclosed Resolutions. They but repeat what Sir G. William Des Voeux forcibly drew attention to in paragraph 16 of his Despatch, No. 334, of the 31st of October last, viz:- that what is called 'Military Expenditure' by no means fairly represents the burden which is really borne by the Colony on account of the garrison here."

The resolutions state that the increased vote should only be availed of in proportion to the increase in the garrison expenditure, and were at one time warmly and cordially supported by the Secretary of State for the Colonies. The Colonial Office despatch of 23rd May last to the War Office says:-

"With reference to the letter from this Department of 24th January last regarding the Hongkong military contribution, I am directed by Lord Knutsford to transmit to you, to be laid before Mr. Secretary Stanhope, for his consideration, copy of a despatch from the Officer Administering the Government of Hongkong, reporting that the Legislative Council had unanimously voted the increased contribution, but had also adopted certain resolutions bearing on the subject."

And paragraph 3 reads:-

"As regards the second resolution, Lord Knutsford considers that when the increased garrison has been supplied, the Colony may be expected to pay its proportion of the cost, viz., £40,000 per annum, provided there is no very large deficiency of men at any time; but as the basis of the present demand is the provision of additional troops, his Lordship thinks there is reason in the contention of the Legislative Council that they should not pay the increased contribution until the troops are provided."

And paragraph 5:

"Lord Knutsford desires me to add that the liberal manner in which the unofficial members of the Hongkong Legislature have met the demands of the Imperial Government has enabled a constitutional crisis to be averted, and it will, in his Lordship's opinion, be politic to make any concession which may be possible to meet their views."

The War Office has not sent any extra troops; the average number of all ranks here was actually less in 1890 than in 1889; the Government has incurred no additional expenditure on the garrison since the date of Lord Knutsford's despatch of 20th January, 1890; yet, in spite of Lord Knutsford's appeal for a concession in our behalf, Her Majesty's Ministers persist in demanding from this Colony a military contribution just double the amount formerly paid, without giving us any quid pro quo. In acknowledging the Colonial Office despatch of 23rd May, the War Authorities shift their original grounds and endeavour to justify the continuance of their increased demand for other reasons and on other grounds, which I submit have not been before this Council, and which we have not had the opportunity of discussing.

The very able despatch to the Colonial Office of the Officer Administering the Government, Mr. F. Fleming, dated 10th September last, for which we are most grateful, states our case very fairly and bears most comprehensively on the whole subject of the increased military contribution. Paragraphs 2 and 3 say:-

"I notice with pleasure the concluding paragraph of Mr. Wingfield's letter to the War Office of the 23rd of May, in which he states that your Lordship desired him to add that the liberal manner in which the unofficial members of the Legislature met the demands of the Imperial Government enabled a constitutional crisis to be avoided, and that it would be politic, in your Lordship's opinion, to make any concession which it might be possible to meet their views.

I entirely agree with your Lordship that it would have been politic in the circumstances had the War Office given some consideration to your Lordship's very reasonable suggestion. But far from doing this, they seem to take advantage of the Council's liberality by having recourse to a different line of argument to that conveyed at their dictation in your Lordship's Despatch No. 8 of the 20th of January.

That despatch, as does the letter from the War Office of the 14th of July, unquestionably refers to what the garrison in Hongkong was in 1883, to the amount of contribution then paid, and to the revenue of the Colony in that year, and it then goes on to compare the state of things at that period with what exists at present.

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