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money deficit which in the present depressed state of trade

and of decreased Revenue the Colony is not well able to

bear.

8.

There would seem to be four methods of

adjusting this matter:-

(a). That the Military Contribution should not

be levied on the gross receipts from the

Postal Agencies in Treaty Ports in China,

but on the net profit only.

(b). That the merchants through the Municipality

or Chamber of Commerce at each place should

be called upon to pay a contribution sufficient to indemnify the Revenues of this

Colony for any loss incurred in carrying on

the Agencies.

(c). That the privilege of the 1 penny rate

should be withdrawn from the Treaty Ports

except of course so far as Hongkong and

Weihaiwei are concerned and the 2 pence

rate substituted.

(d). That the deficit to the Revenues of the

Colony should be made good by an increase

in the grant from the Imperial Post Office.

With regard to (a) the Revenue derived

is as I have shown balanced by expenditure which cannot

properly be considered as expenditure upon the Colony itself. The amount which should properly be subject to the

20 per centum contribution to Military Account would seem

to

ZS.

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