3--
440
5. This decision will apply to the proposed extension to 999 years of the lease of Kowloon Marine Lot No. 40 to the Green Island Cement Company, recommended in Sir W. Robinson's despatch No. 290 of 29th December last. I have not hitherto answered that despatch, because I have been in correspondence with the Secretary of State for War, as regards that portion of the land in question, which appears to fall within the Military Reserve, as shown on the tracing enclosed in Sir W. Robinson's despatch No. 134 of 9th April, 1892. It was not stated in the despatch of 29th December last, whether the consent of the General Officer Commanding was obtained before the land was sold in September last. The matter has now been referred to the General Officer Commanding by the War Office and I will address you further on this point, when I am informed as to the result of that reference.
I have, &c.,
The Officer Administering the Government of
(No. 182.)
HONGKONG.
J. CHAMBERLAIN.
GOVERNMENT HOUSE, HONGKONG, 29th June, 1898.
SIR, I have the honour to acknowledge the receipt of your despatch No. 132 of the 23rd ultimo instructing me that in future leases of Crown land are not to be granted for a term exceeding 75 years without previous reference to you in each case.
2. It does not occur to me to offer any observation in view of special local considerations with regard to the decision at which you have arrived.
3. As regards Sir Wm. Robinson's despatch No. 290 of the 29th December last to which the 5th paragraph of your despatch under acknowledgment refers, I may be allowed in anticipation to state that before a lease of Kowloon Marine Lot No. 40 was granted to Messrs. Shewan, Tomes & Co., the Military Authorities were consulted and provided certain conditions were complied with raised no objection to the sale of the lot, as will appear from the enclosed copy* of a letter on the subject.
The Right Honourable
JOSEPH CHAMBERLAIN, M.P.,
&c.,
(No. 284.)
Se.
I have, &c.,
(Signed) W. BLACK.
GOVERNMENT HOUSE,
HONGKONG, 6th October, 1898.
SIR,-In continuation of my despatch No. 182 of the 29th June which was acknowledged by your despatch No. 208 of the 18th August and referred to the subject of Crown Leases in this Colony, I have the honour to forward herewith* a communication from the Chamber of Commerce and copies of letters addressed to the Director of Public Works by some of the large business houses and land owners animadverting strongly upon the proposed change in the tenure of Crown lands from 999 years to 75 or at the longest 99 years,
2. Upon the receipt of your despatch No. 132 of the 23rd May last, your instructions were forthwith put into force and lots of land in the resumed areas of Taipingshan and in the vicinity of the Kennedy and Bowen Roads were put up to auction on a lease of 75 years,
* Not printed.
Public attention was at once attracted by the new condition regarding the term of lease, and the present protest by the Chamber of Commerce is the outcome.
3. I shall not set forth at length the arguments urged against the change upon which you have determined, as those arguments are plainly stated in the letters enclosed, especially in the letter of the Chamber of Commerce, and shall content myself with noticing some of the reasons and statements which appear in the letter of the Chamber of Commerce.
4. That letter states that several lots on the resumed area in Taipingshan were then "sold on a lease of 75 years, but the premium demanded had to be reduced to half the amount which could have been obtained had a longer period been granted". As a fact only one lot in the quarter named has been put up to auction, at which the Revd. Mr. Hager purchased it for the American Board of Foreign Missions.
Nor was the premium reduced to half the amount that could be obtained had a longer lease been granted. This lot was valued by the Director of Public Works at $2.50 a sq. foot, if sold on 999 years' lease, but was put up at $2 a sq. foot to induce competition which however did not take place, with the result that the lot fetched a trifle over $2 a sq. foot. Adjoining land was offered for sale in January last at $3.50 a sq. foot on a 999 years' tenure but no bid was made.
5. As regards the statement that holders of land at Kowloon and in the hill district leased on a 75 years' tenure were allowed to believe that the question of the future extension of the lease to a parity with those held within the city of Victoria would be considered and that in no case would resumption follow on conclusion of the lease, it has no foundation.
If such lessees entertain this belief, there is no act or word of the Government which justified them in holding such a belief. The facts are all the other way, as will be seen by a reference to Lord Derby's despatch No. 105 of 28th April 1885 in reply to Sir George Bowen's despatch No. 112 of the 9th March 1885 transmitting a copy of a petition signed by Messrs. Ede, Jackson, Belilios, &c. On the strength of the decision conveyed in Lord Derby's despatch a similar request preferred by the lessee of R. B. L. No. 1 has recently been refused.
As regards mortgages, if they advanced money on the security of land leased for 75 years, they did so with their eyes open and with no reason for the faith that was within them.
6. I now come to deal with the effects which the change in the tenure of land is prophesied to produce...
(a.) "Placing all property held on 999 years' lease at a high premium."
Even if this effect is produced, the higher letting value of these properties will result in an increase in revenue from rates. I do not however anticipate that such effect will be more than temporary, as it is probable that parties seeking to buy land will prefer to accept leases of 75 years if favourable terms as to renewal for the same period at enhanced Crown Rent if deemed advisable are incorporated into future leases, rather than pay exorbitant prices for 999 years leasehold property. All that is required is a certainty of tenure, and if conditions such as that the leases will be renewed to the original lessee or the assignee in possession at the time of expiry of the lease upon such an advance in Crown Rent as is justified by the then value of land and without fine for a further period of 75 years and that compensation will be given in the event of the land being resumed for any public purpose, are incorporated into new leases, I anticipate no difficulty in readily effecting sales on such terms.
(b.) "Reducing the premium on sales of Crown lands from 50 % to 60% according to locality."
Since your instructions were received, sales of land on lease for 75 years in the vicinity of Kennedy, Macdonnell and Bowen Roads, have fetched the usual prices. This is the only criterion by which one can judge of the effect of your proposal. It contradicts the statement of the Chamber of Commerce.