Your letter raises the question: Deferred compensation which has been the subject of previous correspondence. The occupation of Shamei Chun and the disturbances which led up to it have caused considerable expenditure. You and Salisbury have been informed.
In a telegram of 17th June last (a copy of which was sent to D.O. in my letter of the 21st June last), the Governor estimated the expenditure to date at some $9300, and the expense caused by that amount is now largely exceeded. It is not clear at present who has paid the money and it is not clear to what precise charges will be borne by Military Naval funds, but it seems probable that, unless other provision is made, the Colony will be left to pay the greater part of the bill.
Such a course will be deeply resented by the Hongkong community, who will be aggrieved in any case and probably be discontented at the retrocession of Shamei Chun. They will contend and in my...