OPTUM.
{
44
The considerations by which His Majesty's
Government have been guided in assessing the amount of the grants to be made to Hong Kong in respect of the loss of revenue from opium are these.
The adoption of the policy laid down by His Majesty's Government necessarily meant that the
revenue paid to the Colony by the opium farmer would
be decreased, but it did not follow that the decrease
would represent a total loss to the revenue.
The new policy had not destroyed wealth, and a reduction of the consumption of opium meant that persons who had previously expended their money on the drug would keep it in their pockets or use it for other purposes. It was accordingly open to the Government of Hong Kong to recoup themselves for
the loss on the farm rent by introducing new taxes
which would bring in an equivalent revenue from the
same classes of the population, and it might have been
argued that there was therefore no ground for making
any grant at all to the Colonial Government, except
perhaps, some small sum to cover the cost of collect- ing the new taxes, since the farm revenue had been
obtained without any expense to the Government.
His Majesty's Government, however, did not adopt this argument, as they recognised that it would not be easy to discover suitable forms of new taxation at short notice and also that the new policy might cause a dislocation of trade which would result in- directly in loss to the Government. They had also,
however,
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IS