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To make it possible to meet the Governor's wishes on this point in future, arrangements have now been made to record the expenditure on the garrison of Hong Kong separately in the accounts from 1st April 1907.
As your Department is aware, the other colonies mentioned by the Governor pay no military contribution, and the cost of their garrisons does not appear to be sufficiently relevant to the subject to justify the trouble and delay involved in making further calculations.
With reference to the Governor's remark as to Appendix 21 of the Army Estimates of 1907/8 being an "apparently complete" statement of the estimated expenditure in respect of the colonies concerned, I am to draw attention to the note to that statement showing that it excludes loan expenditure, sea transport, arms, ammunition and other stores, non-effective charges, etc., etc.
Although it is not yet possible to give any statement of the actual military expenditure in respect of Hong Kong during 1907/8 and 1908/9, it is clear that the contribution to be paid by the colony will cover only a fraction of that expenditure. The estimated contribution for 1907/8 is £138,300, and for 1908/9 only £108,000 (after allowing for the recent fall in the dollar); while in view of the recent increase in the garrison it is not likely that the expenditure in 1908/9 will fall short of £380,000, thus leaving more than