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hitherto received by them.
Their revenue thus suffered
a loss of £150 per annum, the effect being precisely the same as if the Colony had obtained the Crown Rent
and paid £150 in cash annually towards the military
requirements of the Colony's defence.
The waiving of the rent is, in the opinion of the Army Council, a contribution to the permanent defence fund of the Colony; the reimposition of the
rent is equally the cessation of that contribution.
But the assumption upon which the Colonial
Office Circular of 30th December 1894 rests is that each
Colony is able and bound to maintain the integrity of
its permanent defence fund in money or in kind. On
this assumption the Army Council suggested that the
Colony should be asked to make good the deficiency which
would arise in its defence fund on the disposal of this
property, in the manner laid down in the Circular, i.e.
by an equivalent credit to the War Department in the
Military Lands Account. That credit is clearly £150 per
annum, or the capitalized value of that sum.
In this connection I am to refer you to War
Office letter, Number Hong Kong 8/17 of the 2nd April,
1907, where it is stated that for a road of approach to
Bowen Road Hospital the Colony received credit in the
Colonial Military Lands Account for the premium and
commuted