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Encloseared.
7.
As, however, the solution of the
difficulty suggested in my telegram of the 2nd. instant
may, to judge by previous correspondence, be objected to
on the ground that it involves the withdrawal of the
privilege of sending letters to British Possessions at
4 cents per ounce, I have after consulting the Executive
Council made the alternative proposal relating to the
Agencies in China only contained in my telegram of the
10th. instant, copy enclosed.
The payment of Military Contribut-
-ion on gross receipts at the Agencies is, I think Your
Lordship will admit, illogical and indefensible; and I
have no doubt Your Lordship will also agree that it is
equally illogical and indefensible that the taxpayers of
this Colony should bear any loss whatever in connection
with the Postal Agencies.
But apart from all considerations
of logic or morals the fact, I regret to say, is that the
Colony can no longer afford to be generous in this matter.
The financial condition is unsatisfactory and the prospect
for the future is more than unsatisfactory. Many important
Public Works, notably in connection with an increased
Water Supply, await funds for their prosecution, the Rail-
Way