208
*
16
op/n
to ascertain with accuracy what amount of revenue is actually raised in the San district. Owing, however, to my having persuaded a certain party, who is in a position to know what revenue is collected, to give me the information desired, I am able to attach a statement, which may be regarded as a fairly reliable account of the revenue raised annually in the territory to which the Convention refers (Appendix N 8).
This statement shows that the total annual revenue of the new area is estimated at $163,636.14, or, say, £16,000.
It must not be supposed that the magistrate pockets all the difference between the regular and irregular revenue. Superiors have to be kept in good humour, an effect which cannot be produced without a considerable outlay; underlings must have their share of the spoil; and not a small portion of it is secured by those who farm various items of revenue, for which they pay much less than they make out of them.
Owing to the inspection of the new territory having been somewhat hurried, it was Some of these not possible to institute a minute inquiry into all the items of revenue. may not be regarded as satisfactory sources of revenue, and may be ultimately aban- doned, whilst it may be deemed advisable to modify the mode of collecting others. For instance, the revenue derived from opium includes a duty on raw opium, which pro- duces annually $23,611.11. In Hong Kong the duty on opium is charged not on the raw but on the prepared article, which in the new territory is said to yield only $4,166.67 a year, an amount obviously much lower than that which could be collected. And the same remark is applicable to other items of revenue, which, when British rule is estab- lished, will be greatly increased. However, until further experience has shown in what manner revenue can be best raised without exciting the suspicion or irritating the feelings and prejudices of the inhabitants, it would be well to interfere as little as possible with the present system and sources of taxation. If this be done, it is antici- pated that there will be no difficulty in raising at the start an annual revenue sufficient to meet the cost of administering the new territory. The expenditure is estimated at $125,000. To cover this outlay taxation to the amount of 14 dollars or 2s. 6d. per head of the population will be sufficient.
EXPENDITURE.
Appendix 9 contains a statement of the expenditure which, it is estimated, will be required to cover the cost of administering the new territory. It amounts to $125,000.
| large
The chief items of the estimated expenditure are:-
Police Surveyors Miscellaneous
Total
$33,223
$14,400
$24,657
$72,280
When the work of survey has been completed such age staff of surveyors will be unnecessary, but it is important, as has been pointed out, that the land under cultivation should be surveyed as quickly as possible. Miscellaneous expenditure has been esti- mated at a high figure, as unforeseen expenses are sure to be larger when the territory is first taken over.
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LOAN.
The finances of the new territory should be kept distinct from those of Hong Kong, and, so far as can be judged, there seems to be no reason why it should not be self-sup- porting as soon as it has been taken over. But the collection of the annual revenue will necessarily take some time, especially at the commencement of British rule, and before that rule has been established, it will be necessary to have in hand funds sufficient to meet current expenses and to cover initial outlays. Buildings for public offices, for officers' quarters, for a gaol, for a school, will have to be constructed; the present roads will have to be improved and new ones made.
To meet this expenditure I recommend that recourse be had to a loan. The Government of the new territory might be empowered to borrow up to a maximum amount, and to arrange with a local bank for an overdraft, so that it could obtain such advances, not exceeding the amount it has been authorised to borrow, as it may from time to time require.
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BOUNDARY LINE.
The boundary line indicated on the map attached to the Convention (Map I.) is the shortest line from sea to sea that could be found, measuring on the map only eleven (11) niles. Following the river from Deep Bay to Sham Chun and the road from the latter place to Starling Inlet, the actual distance is about thirteen (13) miles.
This boundary line is open to great objection. It cuts in two the rich valley of which Sham Chun is the centre, and, while excluding that town, divides the villages in the valley hitherto linked together by family ties and common interests, and at present separated, so far as the river extends, by about 100 feet of a tidal river, and onwards from Sham Chun to Starling Inlet by no boundary whatever. All these villages regard Sham Chun as their central and most important market, where they dispose of their goods and make their purchases, and much difficulty and friction would be certain to arise if the villages on one side of the stream or road came under British jurisdiction whilst those on the other remain under Chinese rule.
Another important reason why Sham Chun should not be excluded from the area to be leased is that it is the seat of the Head Council of the local as opposed to
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the Imperial Government, represented by the district magistrate, who resides at de hambau
This Head Council controls all the village and other tribunals throughout the Tung Lò or Eastern Division of the San Op district, which is that portion of the district included in the Convention, and exercises great influence in every village.
Again, it must be remembered that the chief industry of the villages in the valleys is the cultivation of rice, for which an ample and constant supply of water is necessary, If the boundary line indicated on the Convention map be followed, endless disputes as to water rights between villages under British and Chinese jurisdiction are certain to ensue; dissatisfaction will be created; and the task of government will be rendered more difficult.
The proposed boundary would also render smuggling an easy matter, which, in view of the pledge given to China, ought to be avoided.
The disadvantages of having a Chinese town just outside British territory have been experienced in the case of Kowloon, which for years has been a source of never- ceasing trouble and constant friction between the Governments of Hong Kong and China History will certainly repeat itself if Sham Chun be allowed to remain in Chinese territory.
In the opinion of all those acquainted with the country, whether belonging to the naval, military, or civil services, it is essential, in the interests of good government, and in order to maintain friendly relations with China, that the town of Sham Chun should be included in the lease.
From the terms of the Convention it appears that the waters of Mirs Bay and Deep Bay are to be included in the lease. Nothing, however, is said regarding the territory forming the western portion of Deep Bay and the northern and eastern parts of Mirs Bay. Both Commander Horsey and Lieutenant Rundall, R.E., whom I consulted on this point, agree that in order to have undisputed rights over those waters and for pur- poses of naval and military defence, it will be necessary to have control over all the land which surrounds these bays from which they could be commanded by any unfriendly power, who might be at enmity with Great Britain.
In order, therefore, to secure a boundary which will be satisfactory on civil, mili- tary, and naval grounds, it will be necessary to depart from the line shown on the Con- vention map (1.), which, however, only indicates, generally, subject to future delimita- tion, the area leased.
The boundary between two countries, which leads to least friction, is either a broad and deep river or the ridges of hills forming the watersheds of different valleys. In the San Of district there is no broad river such as would form a suitable boundary. But there are ridges of hills which could be utilised for that purpose.
The first ridge is that which divides the district of San Of from those of Kwai Shin and Tung so, and if it could be arranged to have the whole of the San O district, a political and geographical division well known to the Chinese, that would undoubtedly be the best solution of the boundary question. But if it is not deemed advisable to lease such a large extent of territory, I atacaglar recommend that the line sketched on Map X./be adopted, a recommendation which has the strong support of Mr. Ormsby, Commander Horsey, and Lieutenant Rundall, R.E., all of whom have personally inspected the country.
This proposed fine, which includes the important town of Sham Chun and the land to the north and east of Mirs Bay and to the west of Deep Bay, forms a good, natural
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