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and duties are paid in postage stamps, which are now sold exclusively by the Post Office, leaving the sum of $414,046.58 as the approximate revenue from the Postal Service. The total expenditure amounted to $510,729.99. The result of the year's working shows a deficit of $66,683.41 which is due to the fourth quarterly payment of the P. & O. subsidy for the year 1908 being made in 1909 instead of in the year in which it was due; to increased transit payments on the basis of the weight of correspondence despatched during November, 1907, under the Convention of Rome, and to increase in the volume of correspondence sent by the trans-Siberian Railway.
This Colony commenced to forward direct closed mails to the United Kingdom and Germany via Shanghai, Dalny and the trans-Siberian Railway on 24th April. The parcel post arrangement between this Colony and China came into operation on 1st October. The Cash on Delivery Service in connection with parcels exchanged with the United Kingdom was adopted by this Colony on 1st May.
XI.-MILITARY EXPENDITURE.
(a) COLONIAL CONTRIBUTION.
The Colony contributed $1,226,441 (being the statutory contribution of 20% of the Revenue) towards the cost of the maintenance of the Regular Forces in the Colony including Barrack, Services and Defence Works
(b) VOLUNTEER CORPS.
The expenditure on the Volunteers, which is entirely borne by the Colony, was $38,393 compared with $45,554 in 1908.
XII.--GENERAL OBSERVATIONS.
The assessment made for the year 1909-1910 (1st July to 30th June), shows a slight decrease in the rateable value of the whole Colony of 0.60 per cent. In Shaukiwan, the Hongkong Villages, Kowloon Point, Yaumati, Hunghom and Kowloon Villages there is an increase ranging from 0.44 per cent. to 10.53 per cent., but a decrease is shown in the City of Victoria of 2.00 per cent., in the Hill District of 0.31 per cent., and in Mongkoktsui of 9.73 per cent. There is a noticeable increase in New Kowloon of $41,543 or 6.66 per cent.
The average rate of exchange (demand on London) which had been 1/9.6727 to the dollar for 1908 fell to 1/9.0601 for 1909.
The position with regard to subsidiary coins remained unsatisfactory, and during 1909 the Government withdrew from circulation silver subsidiary coin amounting to the face value of $779,712 and copper to the face value of $40,646. These coins were shipped to England where they were melted down and sold as bullion for £57,757 1s. 4d. and £1,535 0s. 1d. respectively. The loss to revenue by this transaction amounted to $76,863.17. The discount