CO537-(33-34) — Page 546

PUBLIC RECORD.OFFICE

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TTTT C. 5.7

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out of this total sum can be attributed to expendi- ture for other than military purposes. The interest on 650,000,0001., at 24 per cent., is 17,875,0001., say, 17,800,0001. The charge of the army and navy, as stated above, is 29,800,0001., making a total war charge of 47,600,000l. Out of every pound, therefore, of the national income of 86,800,000., 11s. is absorbed by defence charges past and present.

It may perhaps be contended that although the colonists are theoretically members of a great Empire, yet that, not being admitted to a voice in its Councils, they should not, as contributors to war charges, be compared with their fellow Imperial The Chancellor subjects in the United Kingdom..

of the Exchequer desires that the case of the colonist should be most fairly and exhaustively discussed, and with that object he has compared the military expenditure of Hong Kong with that of minor States which are not exposed to the warlike risks and temptations of great Empires. He finds that while Hong Kong contributes about 9 per cent. of its income to defence, the Nether- lands contributes about 25 per cent., Belgium about 14 per cent., Portugal 19 per cent., Sweden 32 per cent., the Netherlands East Indies 27 per cent., Greece 24 per cent., Switzerland 34 per cent., Japan 48 per cent., Brazil 18 per cent.

Such comparisons can only be regarded as ap- proximative, because military non-effective charges are often included in foreign Budgets under debt, or with financial charges, while Naval Estimates include also Colonial charges. The result, how- ever, shows that throughout the organized world communities the percentage of income which

devote to defence is very considerably in excess of the sum which has been hitherto contributed for that purpose by Hong Kong.

The percentage, however, is not conclusive evidence in itself of the comparative weight of defence charges on different nations. The Chan- cellor of the Exchequer applies a third test, and he finds that each inhabitant of Hong Kong contributes about 18. 10d. to defence, that each inhabitant of the Netherlands contributes about 13s. 7d. to the same service, each inhabitant of Belgium about 6s. 7d., each inhabitant of Portugal about 78. 2d., each inhabitant of Sweden about 68. 6d., each inhabitant of Greece about 108. 8d., and each The inhabitant of Switzerland about 5. 14d. inhabitants of the United Kingdom pay about 10s.

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a-head, and if the charge of war debts be added, about 17. 58. 5d. per head.

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One further test may be applied. The public income raised in a State may be small, and yet may be the result of burthensome taxation. Can this be said of Hong Kong? There is a certain difficulty in ascertaining the facts about Hong Kong. There is so little taxation there that it is not worth the while of the Government to collect statistics, and in the Statistical Abstract of the Colonies the financial columns are almost a blank. There are no statistics of imports and exports. In the United Kingdom, as British tax-payers know to their cost, there are five great heads of taxation, viz., Customs, Excise, and Income Tax, which three branches are estimated to produce in the current year nearly 58,000,0001., and Stamps and Taxes producing about 15,000,000. The fortunate colonist in Hong Kong pays no customs duties, no excise duties, no income tax. The larger part of the taxation revenue 18 obtained from houses (in 1880 about 48,0001.) and from the opium tax, levied, it is believed, as a licence duty (43,000); there are besides some stamp duties. The Colony, happy in having no history, gives only meagre particulars for the Colonial Blue Book, but a recent Governor dilates on the increased and increasing prosperity of the Settlement, and dwells on the fact that for a long time there had been no increase of taxation.

The Chancellor of the Exchequer thinks he has shown that the contribution of Hong Kong towards its own defence is quite inadequate by whatever standard it may be tested. The proportion of its revenue set aside for defensive purposes is insignificant, whether compared with the home charge for defence or with the charge of defence in the least aggressive and smallest States of the Continent. The charge for defence per head of inhabitants is very small, while the incidence of taxation is out of all comparison light.

The Chancellor lays these facts before the Cabinet, and invites his colleagues to examine by the light of them the increased cost of the garrison of Hong Kong which the War Office thinks necessary, the proposed alteration of the Colonial contribution proposed by the Committee on Colonial Contribu- tiona.

and

The outlay on defence works should be first considered. It was originally proposed that the cost of these works should be thus partitioned:

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