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from the value of a new site estimated at 50,000, but Sir A. Haliburton's Committee say that this estimate may be exceeded.
It is proposed, as my Lords understand the proposal, that the Imperial Govern- ment shall sell land it now holds, valued at 140,000 to the Colony, that this money shall be applied towards the new barracks, reducing their net cost to 72,000%, that the Imperial Government shall pay two-thirds of the charge, or 48,000, and that the Colonial Government shall pay the balance or 24,000, providing also the land for the new barracks, estimated at 50,000. The proposal therefore means that the Imperial Government should give up sites worth 140,000, and should spend 48,000 in cash; that the Colony should find a new site, costing 50,000, and should spend 24,000 in cash. The Committee do not say how they would provide for the excess which they anticipate upon the estimate.
Recommendations.
11. Secretaries of State for the Colonies, in despatches to the Colonial Government, have admitted the probability of the garrison of Hong Kong being in part maintained for Imperial purposes," adding, however, that "such purposes are closely connected with the prosperity of the Colony" they have gone further, and said that," the larger part of the garrison is maintained for Imperial purposes." Sir A. Haliburton's Coinmittee take the latter of these two statements apparently as their guide, in forming an opinion upon the amount of the contribution to be asked from the Colony.
12. My Lords must, however, demur to such an assumption. The Secretary of State for the Colonies is the advocate and representative of Colonial interests in the Imperial Councils, and my Lords cannot be bound by a statement to which they, as representing the British taxpayer, were not partics. It must not be held a financial instruction for all time, that the "larger" part of the garrison of Hong Kong is maintained for Imperial purposes. On the contrary, my Lords strongly hold that if they are to lay down a principle, it ought to be that, as the Imperial Government undertakes the naval defence of the Colony, the Colony itself should provide the larger part of the cost of its military defence.
13. Sir A. Haliburton's Committee state that the revenues of the Colony would not admit of its bearing any large proportion of the cost of its garrison, and they point out that the revenue of 1888 was estimated at 266,000, while the cost of the future garrison will amount to 283,000 arrangement made in 1865, under which the Colony contributed one-sixth of its Taking as their starting point the revenue to military expenditure, and thereby defrayed one-fifth of the cost of its garrison, they show that one-fifth of the cost of the future garrison would be 56,0002, or rather more than one-fifth of the estimated revenue for 1888. But though they do not think such a charge excessive in itself, they point to the expenditure which the Colony has mourred on defences, to the expenditure which it may incur on barracks, and ou local Militia and Volunteers, and they suggest that one-fifth of the cost of the Regular garrison would, in these circumstances, press hardly on the Colony. They propose accordingly that the contribution should be fixed at 40,000%. for five years from 1st January, 1889, and that at the commencement of 1893 the contribution should be reconsidered, with a view to its readjustment in 1894.
19. My Lorde have carefully weighed these recommendations, and they regret to come to the conclusion that the proposed settlement will not satisfy the just claim of Her Majesty's Goverument.
The fact that the Colony has in two or three past years contributed an inadequate sum to works of defence, is not a reason for relieving it of a fair contribution to the charge of its garrison in the future. Nor can my Lords admit the cost of barracks as a reason for relief. The provision of barracks is a temporary and extraordinary service, such as the Imperial Government has often to meet, and such as it meets, either by temporary increase of taxation, or by loan. The cost of local Militia and Volunteers may properly be included in military expenditure, but proposals for the enrolment of such corps, though often put forward, are seldom enforced; and my Lorde would prefer to know that Militia and Volunteers actually exist, before they admit a prospective charge on their account. The plea for relief in consideration of other services performed, is therefore insufficient.
20. Nor is the plea for consideration on the ground of incapacity, more sound. Hong Kong is a port with 7,000,000 tons of shipping in the year. It is the centre of financial business in that quarter of the globe. A recent Governor has dilated on its great and increasing prosperity, and has dwelt upon the fact that for a long time taxation had not been increased. The estimated population on the 31st December, 1887, was 213,000.* The numbers were increasing at the rate of 9,000 or 10,000 a year,
*
Parliamentary Paper C. 5249, 1888.
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and in 1889 the population probably exceeds 230,000. The Military Contribution, therefore, is now little more than half a dollar a head, and the increase of contribution now proposed, say 43,000, including Volunteers, would reach little more than a dollar a-head.
21. Comparison between the sums expended by different countries on certain services are always difficult, and my Lords only offer the following figures as approxi- mate, and in illustration of their general argument. They believe that each inhabitant of the Netherlands contributes about 138. 7d. to defence, each inhabitant of Belgium about 68. 7d., each inhabitant of Portugal about 78. 2d, each inhabitant of Sweden about 6s. 6d, each inhabitant of Greece about 10s. 3d., and each inhabitant of Switzerland about 5s. 14d. These are small States not armed for aggression, and they afford, therefore, a fair standard of comparison with Colonies. Again, Hong Kong contributes perhaps 9 per cent. of its revenue to defence, Holland contributes about 25 per cent., Belgium about 143 per cent., Portugal 19 per cent., Sweden 32 per cent., Greece 24 per cent., Switzerland 34 per cent. of the national revenue, to defence. But if it is contended that these are European Powers, and therefore that the comparison is not fair, my Lords may cite the Dutch East Indies, in which the proportion is 27 per cent., or Japan, in which it is 43 per cent. If the increase proposed by the Committee were adopted, the contribution from Hong Kong would not probably exceed 18 per cent.," and as the revenue steadily increases, the percentage at the close of four years will in all probability be less.
22. But the percentage of revenue appropriated to defence, affords an imperfect test of the burden thereby imposed upon the community. It must also be ascertained whether the revenue raised is large in itself, and obtained by means of heavy taxation. The inhabitants of Hong Kong are exempted from Customs, and there is no income tax in the Colony. Taxation is confined, my Lords believe, to a moderate house tax, to light stamp duties producing from 20,000% to 30,0007, a-year, and to a few license duties, the chief of which is levied upon opium. Further, the modest revenue of 266,0002. includes local taxation.
It
23. My Lords have shown, they think, that the contribution of Hong Kong towards its own defence is inadequate, by whatever standard it may be tested. The proportion of its revenue set aside for defensive purposes, is insignificant when compared with the like proportion set aside in States which do not maintain large armies and navies for aggressive objects. The increasing prosperity of the Colony is undoubted. contributes nothing to its naval defence. The charge for defence per head of the inhabitants is very small. The amount and incidence of taxation are, out of all comparison, light.
24. Sir A. Haliburton's Committee state that the Colonial Office in 1863 imposed upon the Colony a Military Contribution equivalent to one-fifth of the cost of the garrison.and that it was in the contemplation of the Secretary of State, who then held office, to increase it. That intention has unfortunately remained unfulfilled for a quarter of a century, and the favourable terms thus enjoyed by the Colony during that period would in itself (sic) justify a considerable increase in the proportion which Hong Kong is henceforth to contribute to defence. It certainly is not a reason for a reduction of that proportion. Yet the Committee recommend a contribution not equal in proportion to that which the Colony paid in 1863, and their recommendation is not accompanied by a stipulation for a more equitable arrangement at the expiration of the five years. This would not be a satisfactory conclusion.
25. The Empire is required to make considerable sacrifice in order to complete its defences, and as self-defence is the primary duty of every community, proper provision for that object should be one of the first charges on the revenue of each member of the Empire. The Imperial Government, in its anxiety to consult Colonial interests, has somewhat overlooked this first condition of society, and the precedent may not improbably be construed into a rule of policy that Colonial Governments are not to be asked for a proper contribution towards their own preservation. Sir A. Haliburton's Committee do not sufficiently recognise the fact that the Colony, like the mother country, must increase its taxation if existing revenues will not meet the due and proper charges of defence and government, and my Lords know no reason why the prosperous Colony of Hong Kong should be exempted in this respect from the ordinary lot of civilised communities.
26. My Lords cannot therefore agree that the contribution of 40,0007, a-year is sufficient, and they will therefore propose that the subject should be referred in
*If military expenditure apart from works were about 270,000 dollars (43,000 at 3s. 2d. the dollar), this would mean about 18 per cent. of a revenue of 1,500,000 dollars.
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