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over the world. Shipping is undoubtedly of the very first importance to the Colony, but the alleged increase of tonnage can in no measure be reasonably construed as shewing any increase of prosperity in trade here. Such a deduction is more or less fallacious. According to the Estimates the revenue from Light Dues is on the decrease. The figures are:

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(L)

In 1891, $89,656.69

Revised Estimate for 1892, $87,142.31

Estimate for 1893, $87,000.00

The destination of nearly all the Rice and other Imports from the Northern Ports is Canton. The Steamers carrying these merely pass through our waters, but the inclusion of their tonnage in our Harbour Statistics has led and leads to erroneous deductions. A large number of the Ocean Steamers to and from Europe, America, &c., in like manner swell the official tonnage returns, but in reality may add little to our revenue, and many of them contribute nothing to the trade profits, the steamers having in many instances to call, even with little or nothing to land in, or take from the Colony. They have to call for the sole purpose of transhipment of Cargo and Branch Line requirements.

The Colony's Revenue from Opium has not increased or even been maintained. The rent from the Opium Farm has fallen from $389,900.00 in 1891, and $519,000.00 estimated for 1892, to $340,800.00 per annum for the next three years. The revenue from this source is of a most uncertain and precarious nature.

The Revenue obtained from Subsidiary Coinage shows a large decrease. In 1890 it was $90,217.87, in 1891 $73,347.09; the revised Estimate for 1892 is only $8,500.00, and the Estimate for 1893 is $17,000.00.

The Revenue of the Colony is not as productive and as elastic as when these augmentations in salaries were recommended. There was then a large surplus Revenue over Ordinary Expenditure. The surpluses were:

In 1889, $519,107.57

In 1890, $541,638.27

In 1891, $157,229.25

Estimated surplus in Revenue in 1892, $115,216.00

Estimated possible surplus in Revenue in 1893, $6,785.00

Ordinary Expenditure, in spite of all the efforts of the Unofficial Members, continues to increase annually, and, we think, out of proportion to the real needs of the Colony. The figures are as follows:

In 1889, $1,459,167.16

In 1890, $1,170,221.00

In 1891, $1,868,073.26

The latest estimate for 1892 is $1,882,000.00

and for 1893, $1,899,611.00

9

10

In his despatches to your Lordship he tells us that he has recommended reductions of salaries, amalgamation of offices, abolition of appointments as opportunities offer, and has had to ask your sanction for a loan. He evidently agrees with us that the present rates of salary are high, for he has recommended and carried a very considerable reduction in the salary of the new Registrar of the Supreme Court, and he proposes to do the same with all offices as opportunities occur.

The Governor confesses that there is need of retrenchment and reform, that some of the salaries are too high and ought to be reduced, and that the official staff is too numerous. We are also decidedly of His Excellency's opinion and consider that the circumstances which appeared to justify the 1891 increase no longer exist; that an annual economy of $35,000 or $40,000 or more may be easily effected without delay and without hardship, and that as increases were granted and paid upon the express condition that they were open to early reconsideration there is no vested interest to be affected by their revision, and that there is nothing unjust or inequitable in our moving accordingly.

In his Excellency the Governor's address herein before referred to he admits that the state of affairs now, so far as finance is concerned, cannot be considered entirely satisfactory. We quite share in this view, and as to the future we keenly feel the imperative necessity for economy and retrenchment.

The Unofficial Members beg leave to point out to your Lordship that their position in the Council, and their treatment on many financial questions by the Government and by the Official Members of Council is such that they are compelled to take this step for the protection of the interests of the Colony, and in vindication of their own rights and powers as guardians of the public purse. If any increase of expenditure is proposed locally and it happens to meet with the approval of the Unofficial Members of Council they are consulted and their opinions are cited to your Lordship as justifying the expenditure. It is they who have voted for it. If they disapprove they are too often ignored and given to understand that their votes and opinions are valueless and that their presence in Council might well be dispensed with, and that it is for the Executive Government and for your Lordship to determine what is necessary and proper. If a demand is made on the public purse for any purpose disapproved of by the Government or not cordially supported, the responsibility of rejecting it is thrown on the Unofficial Members.

The Unofficial Members have recently objected and objected frequently to the creation of new offices, and the consequent increase in the public charges without their ever being consulted, or having even an opportunity of expressing an opinion on the matter. They are asked to vote the money needed when it is impossible to refuse it. They object to the appointment of additional Cadets when there are Cadets still unprovided for, and to the manufacture of posts to give them salaries when they become too old to be styled as Cadets. They object to the appointment of new men to official posts in the Colony when there are officers in the Colony already qualified to fill the vacancies without work to do.

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13

The Unofficial Members have asked the Colonial Government on three different occasions since April last for a Commission to enquire into the whole question of public Expenditure. We refer your Lordship to the debates in Council on 10th April, 1891, 7th December, 1891, and 9th May, 1892, as reported in the Hongkong Hansards, 1890-91, and 1891-92.

The cost of the salaries and personal allowances alone has risen as follows:

(K)

In 1887, $547,650

In 1888, $552,875

In 1889, $602,183

In 1890, $655,233

In 1891, $758,139 (estimated)

Estimated for 1892 about $774,000, and possibly a still larger estimated amount for 1893, hence our motion for reduction to the 1890 basis, with the view to general retrenchment, and the strictest economy which we regard as absolutely necessary.

House rents are lower now than they were in 1889-1890. The fall has been great; though the effect of this on the Revenue has not yet been felt. The annual valuations have hardly yet been altered. It was solely on the ground of the great increase in house rents in the Colony that Lord KNUTSFORD sanctioned the increased salaries. (See his Lordship's Despatch of 3rd April, 1891, more particularly para. 12.)

The Governor recognized plainly in his statement to the Council at the opening of the present Session the need of retrenchment in every direction, and said:

"In the public service vested interests cannot be disregarded, and all retrenchments consequently must be more or less of a prospective nature. I have publicly stated that when opportunities arise I will take advantage of them, but time is required to effect all such reforms. The Civil Service is to a certain extent over-officered, and the salaries of the clerical service are capable of reduction as vacancies occur."

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The Unofficial Members of Council beg to point out to your Lordship that although there may possibly be some difference of opinion in the Colony on the

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