PUBLIC RECORD OFFICE
Reference :-
EPERNIC.O. 882
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PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO
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in suggesting the possibility of postponement, but when one considers the new law courts, which have become old before they are new, and when one considers the fact that under the original contract the law courts were to be finished in the year 1906, The Unofficial I think, sir. I have shown sufficient grounds for healthy scepticism. Menders of this Council are unanimously in favour of this resolution, and they desire We are simply We are not seeking for any favour or grace a division to be taken asking in the interests of the ratepayers for what is fair and just (Applause }
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Honourable Dr. Ho Kan. Sir, although this will be the sixth or seventh time I have had the honour in this Council to discuss the military contribution, still, I think a tew words are due from me as being the senior Unofficial Member of this Council in eloquently forward by our junior support of the arguments which have been put so Profficial Member and also by my honourable friend who seconded the resolution had almost said that I was tired of discussions on this subject, but yet at the same time I don't see how we can avoid bringing it forward periodically so long as the My honourable military contribution is calculated and raised on an unfair basis. friend opposite, in seconding the resolution, has given an instance of the unfairness of the calculation, and I wish to emphasise the opinion that to have to pay 20 per When we have to raise any cent of our gross revenue in that way is most unfair extra taxes to meet some contingency, some necessary expenditure, we have at once As long as this unfair method of to pay 20 per cent to the military contribution. calculating the contribution obtains there must be periodical protest and discussion in this Council, and I hope that the Imperial Authorities, who, Your Excellency informed us at the last meeting, had the subject under consideration, but had not come to a decision, will at once direct their attention and energy to the matter with a view to arriving at a fairer way of reckoning the contributions from Hong Kong and other Colonies At the same time, sir, the question is not one of real difficulty On one hand I think we all agree that we must as a British Colony, as a loyal Colony, contribute a just share towards the military expenditure of the Empire, and on the other hand it has been said by no less an authority than Mr Joseph Chamberlain that this military contribution should be calculated in a fair and just way, and the only fair and just basis on which it can be calculated is the ability of Now the inhabitants at any particular time to pay that amount of contribution during the last few years it is well known that trade in this Colony and in the two neighbouring Colonies has been depressed both among Europeans and Chinese, and up to the present day, so far as the natives are concerned, it has not recovered from such depression We know this by the large amount of money lying idle in the banks. We know they cannot get their money invested at a reasonable rate of interest. Why Because business is bad and money is not needed to develop it. may be argued by those who have recently come to the Colony and who have seen the large subscriptions given by the Chinese community for charitable purposes, that the Colony was in a prosperous condition, but I wish to assure the Council that this is not the case It is a trait of the Chinese character to be charitable when they are not too well off They are much more charitable in times of depression than in times of prosperity. They realise that it is much more meritorious to give at a time when they are not prosperous. I think that the argument of my unofficial colleague on my right is a fair one, and I think we are all agreed that this question of the military contribution should be put on a proper basis, on the basis of the ability of he inhabitants to pay, and not by comparison with taxes levied in other places, or with the amount which the people at Home pay towards the defence of the Empire. The figures given are most striking. They are new to me, but I think they are very suggestive We all hope that they will be sent to the Secretary of State, and that he will see his way to rearrange a basis of assessment which shall be satisfactory to all for years to come.
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HIS EXCELLENCY: Gentlemen, the honourable member on my right who moved this resolution, has done so with a thoroughness and intrepidity which is character- istic of him. I know he has spent very long hours in working out in detail the figures at which he has arrived, for he has done me the honour of consulting me, and I have suggested some aspects of the question to him. I think that the community is under debt of gratitude to him for the amount of private time he has given to the examina- tion of this public subject. (Applause.) Before I proceed to criticise his arguments I would like to express my obligations to him for his courtesy in informing me gener- ally of the line he intended to take in the debate to-day. That has enabled me to
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come to this Council not wholly unprepared I venture also to offer to him our con gratulations on his excellent maiden speech in this Council
Gentlemen, I had only myself been a few weeks in this Colony before I embarked on the same field of investigation in connection with this subject of military contribu tion, and I venture to think that even the professional student of economics and statistics, however difficult he might think that it would be to form any approxi mation of the incidence of taxation on the individual and on the various classes of any one community, would give it up as a hopeless task to contrast the incidence of taxation in a community such as in the United Kingdom with the incidence of taxation in a community in the Far East such as this. The first question to which the honourable member sets himself to reply is whether we are more lightly or more heavily taxed than the people in England. Now, the first difficulty that suggests itself to me in that problem is: What is the unit! It appears to me that to divide the gross income of a community by the population as given by the census cannot possibly produce any useful result. The census includes women and children. who are not separately taxed if they form part of the household, and yet, on the other hand, we must remember that they do pay indirect taxes on sugar, tea and other articles both of food and luxury. The general unit. I think, in calculations of this sort is the household or the family.
Then again, we must remember that the gross revenue of the United Kingdom which was assumed by my honourable friend to be the result of taxation is not by any means solely produced by taxation. If I remember rightly, something like 14 millions of that revenue accrues from an investment in Suez Canal shares. You have also investments on the other side of the account, such as the Uganda Railway, which was built out of the Consolidated Fund and cost upwards of five millions sterling, and has so far not been directly remunerative. All these questions must be taken into con sideration, and I will not pursue the subject further, for it leads into a maze of difficulties. But even if we could get figures showing approximately the incidence of taxation in any one State or community in Europe, I ask you how is it possible to contrast them with similar figures for a community so entirely dissimilar as this Colony? Here about 94 per cent. of the population consists of Chinese. They have an abnormally small number of households or families in comparison to the total population. A large proportion of them, I believe, own real property in China, and many have investments in the banks here or elsewhere. They are also largely a migratory population.
Apart from all this, the fundamental proposition remains that severity or other- wise of the incidence of taxation depends upon the ability to pay. No one, I think, will deny that a Chinese coolie with a family in this Colony would find himself in fairly comfortable circumstances on an income of, say, $15 per mensem, or £16 sterling a year. That is to say, he could supply the necessaries of life and have a not inconsiderable margin to devote to enjoyment or to the purchase of what are to him luxuries. And yet it may be that a British labourer of the corresponding class with a family might find it an exceedingly difficult thing to make both ends meet on an income of 10 times that amount. The ability to pay, therefore, depends on the cost of living and on the social demands of the environment in which each individual lives. I therefore maintain, as I said before, that to divide the gross revenue, whether due to taxation of the community or not, by the gross population, produces no results which can be usefully employed for such a purpose as we have in view.
The honourable member by his process of calculation arrived at a quotient of £6 17s. as being the incidence of taxation in the United Kingdom as against £1 98. in Hong Kong. But surely, gentlemen, it is also vital to the argument to estimate the incidence on each class of the community separately? It must be shown upon which class the taxation falls most heavily in relation to the ability to pay. It is absolutely necessary to know in some rough way what are the numbers of the wealthy among the population upon whom the bulk of the taxation falls. Again, both the British and the Chinese here have sources of income outside the four corners of the Colony. They have also heavy expenses to bear outside the Colony-as most members of this Council can testify. The monied classes in the United Kingdom own an immense amount of property in the world at large outside the United Kingdom, from China to Peru. The amount of such investments abroad is something astounding. But although this enormous wealth is owned by the monied class of Great Britain outside those islands, their expenses outside the United Kingdom in respect of this property are exceedingly small, and for the purposes of this argument they are negligible.