be found at the end of the year, the following engagements will be outstanding:
1st. The new Convict settlement on Stone Cutters' Island, and the new Central Police Station in Victoria, the completion and fittings of which will cost at the least £15,000 over and above all sums now voted.
2ndly. The Kowloon compensations, assessed by Her Majesty's Commissioners under Treaty at $133,000 = £27,708, exclusive of the valuation of four large Villages not yet assessed. The whole of this may not have to be paid by the Colony, as lands may be regranted instead of bought, and the Naval and Military Services will have to pay a portion. But a considerable payment will have to be made by the Colony, probably not less than £10,000 or £15,000 in addition to the £2,000 entered in the votes of this year.
3rdly. And lastly the establishment of a Mint, the plant and machinery for which, judging by the cost of the Sydney Mint, would probably come to £18,000 exclusive of Buildings which would perhaps amount at the least to £10,000 more.
Items 1 and 2 are unavoidable and must be met: but the establishment of a Mint might no doubt be postponed if necessary to a more urgent claim, but it would be I consider a very "injudicious" policy to do so, looking even at the interests of the Imperial Government alone-for the annual saving which the Mint will effect to the Imperial Exchequer on the item of "loss by Exchange" will probably far exceed the largest contribution which under any circumstances could be drawn from the Colony in aid of Military Expenditure.
Revenue....
Ord. Exp....£85,000 Repairs to
Public works 20,000
£105,000.
£105,000,
I have now carefully gone over the actual present financial position of the Colony and reviewed its prospects as far as they can be conjectured from existing facts, and have shown that the Revenue is barely equal to the ordinary Expenditure, and the maintenance in repair of the existing public works. I have shown also that the surplus in hand is already fully appropriated either for undertakings absolutely indispensable or urgently desired: and I submit, therefore, that the Colony is not in a position consistently with a sound financial policy to meet any such payment as that proposed by His Grace. Indeed it could only be made at all by the substitution of it for some of the items of Expenditure which I have detailed; and I respectfully submit that even assuming for the sake of argument the justice of calling on Hongkong for such contribution it is premature to do so. The Colony has been self-supporting only for the last four years, up to which time it was dependent on Parliamentary aid. During that period of depression, all the Establishments were kept almost below the scale necessary for efficiency, whilst public reforms were postponed and public works allowed to fall into decay. A sudden reaction of prosperity brought with it the necessity for a corresponding outlay--and whilst everything is still in a state of transition, and before former shortcomings are made good, it would indeed be a pity if a demand were enforced which must either interfere with the development of the Colony or plunge it once more into financial embarrassments.
I am unable, however, to concur with His Grace as to the justice of requiring the Colony, even if able, to contribute towards the expenses of the Troops stationed there. Hongkong is altogether an exceptional case and bears no analogy to such great producing plantations as "Ceylon, Mauritius, and the Principal Australian Colonies" which you inform me are "to be called upon to contribute more liberally towards the support of Her Majesty's Troops which are maintained in those Colonies chiefly for the protection of Colonial Interests." The Troops in Hongkong are stationed there for national and not for Colonial objects. They are not in my opinion necessary for the protection of any mere Colonial Trade or interests, or as is assumed in your despatch as an undoubted fact "for the security of its European Inhabitants." The large local Police Force which has lately been remodelled at a very heavy expense, and placed upon a Military footing, together with the Volunteer Artillery, recently established, would I consider be sufficient under any conceivable circumstances for the maintenance of internal order without recourse to Her Majesty's Troops. The Europeans all live together and the population is well in hand being collected within a radius of about two miles. The Chinese population are unarmed and though addicted to thieving and petty crimes are not given to riots and have now a large stake in the Colony. The national characteristic of the people too is a love of order and quiet, and a submission to the powers that be, except under long and unendurable provocation. There are further at all times from one to two hundred foreign Merchant Ships-partially armed-laying at anchor off the Town, and the Harbour being the headquarters of a large Naval Station and having a Dockyard and Docks is never likely to be totally denuded of Men-of-War. These considerations enable me confidently to assert that the presence of Her Majesty's Troops in Hongkong is not necessary for the security of its European Inhabitants or for the protection of Colonial interests.
Her Majesty's Troops are stationed in Hongkong I imagine because England's share in the Foreign Trade of China is estimated at over 30 Millions Sterling; because this Trade is carried on mostly in British vessels from the open Ports in China, at each of which we have British settlements and British subjects for whom we claim exemption from territorial jurisdiction; because in the management of this vast Trade, and in the government of our own subjects scattered along the whole length of the Seaboard of China in the Foreign settlements-now 14 in number--we are necessarily brought into constant intercourse with the Chinese Government, and there can be no doubt that the presence of a small body of Troops somewhere nearer China than India has an excellent effect in averting difficulties, while they form a basis for operations, if misunderstandings should unfortunately arise. Such being the case the only place in the China seas where Troops can be permanently stationed is Her Majesty's Colony of Hongkong.
The connection of the Colony of Hongkong with this Foreign Trade is very slight and remote. The buyers and sellers do not reside there. The Trade is carried on outside it. The Colony produces nothing itself and the Produce exported from China never touches its shores. The Tea and Silk is all bought and shipped at the open Ports, to which Markets also the great bulk of the Imports is consigned direct. The connection of Hongkong with this great Trade consists chiefly in the fact that a certain number of the Heads of the China Houses and Banks elect to live in Hongkong as a convenient centre from whence to direct the operations of their Establishments scattered throughout China.
It is useful as a spot from whence as it were all the wires can be pulled; but for one British subject residing in Hongkong there are scores residing in the country where the actual Trade is carried on. It is at this moment a very doubtful question whether in consequence of the destruction of the Canton trade Shanghai would not be a more convenient directing centre for the foreign trade than Hongkong, and already some of the large Houses have moved there: and I cannot well conceive a policy more likely to drive them all there than to place the Residents in Hongkong under contributions for national objects from which those residing in the open Ports in China are free. It would be placing Hongkong at a most unfair disadvantage and might just turn the scale which is at present hanging in the balance.
The Chinese traffic of the Colony it must be remembered is quite distinct from the Foreign Trade and it is the Chinese who have made Hongkong what it is, and not its connection with the Foreign trade. The Chinese have flocked to the Colony for the advantage which it offers of a quiet and secure Government than which a Chinaman values nothing more, and for this they have been made to pay. They constitute 98 per cent of the population and probably contribute nearly a similar proportion of the revenue. They have made the Colony the centre of a large local coasting trade-a Depôt at which the produce of the North and South destined for consumption in China changes hands. And although this is a trade which enriches the Colony, it is one in which no national interest is concerned, while the chief profit derived by the Colony from the Foreign Trade (which is an object of National interest, and for the protection of which Troops are maintained in China) consists in the mere personal expenditure of those connected with that trade who use the Colony, as already observed, as a directing centre for their operations outside it. I conceive therefore, I am justified in asserting that the Troops stationed in Hongkong are maintained there for national as distinguished from Colonial objects, and that with those national objects the Colony has but an insignificant connection compared with that of the British settlements at the open Ports in China, which can never be called upon for any contribution similar to that now asked from Hongkong.
I am far from denying that the Colony derives several indirect advantages from being the spot selected as a Military Station. The Garrison forms an agreeable addition to the society of the place, while the Troops add to its prestige and importance and lead to a considerable expenditure. But if Her Majesty's Troops are there as a matter of convenience for the Mother Country, and for the maintenance of National objects, and not for the protection of the Colony, I do not see that the Colony can justly be called on to contribute to their support simply because it profits by their presence; or at all events I do not see how in common fairness it could be refused the option of doing without them.
It is one thing to take with thankfulness and to profit by what you can get for nothing, and another to pay an exorbitant price for what, although acceptable, is not indispensably necessary.
I am aware it may be said, "Oh it is well known the Troops cannot be withdrawn and so the threat to do so, is a mere brutum fulmen." But I would answer that if they cannot be withdrawn it is because they are indispensable for Imperial purposes, for that as far as the Colony is concerned I think they might safely be removed; and I can only say in support of my opinion that I am prepared to undertake the responsibility of maintaining law and order in the Colony without Troops, if Her Majesty's Government should think it un-
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9
be found at the end of the year, the following engagements will be outstanding:
1st. The new Convict settlement on Stone Cutters' Island, and the new Central Police Station in Victoria, the completion and fittings of which will cost at the least £15,000 over and above all sums now voted.
2ndly. The Kowloon compensations, assessed by Her Majesty's Commissioners under Treaty at $133,000 = £27,708, exclusive of the valuation of four large Villages not yet assessed. The whole of this may not have to be paid by the Colony, as lands may be regranted instead of bought, and the Naval and Military Services will have to pay a por-
tion. But a considerable payment will have to be made by the Colony, probably not less than £10,000 or £15,000 in addition to the £2,000 entered in the votes of this year.
3rdly.And lastly the establishment of a Mint, the plant and machinery for which, judging by the cost of the Sydney Mint, would probably come to £18,000 exclusive of Buildings which would perhaps amount at the least to £10,000 more.
Items 1 and 2 are unavoidable and must be met: but the establishment of a Mint might no doubt be postponed if necessary to a more urgent claim, but it would be I con- sider a very "injudicious" policy to do so, looking even at the interests of the Imperial Government alone-for the annual saving which the Mint will effect to the Imperial Exche- quer on the item of "loss by Exchange" will probably far exceed the largest contribution which under any circumstances could be drawn from the Colony in aid of Military Ex- penditure.
Revenue....
Ord. Exp....£85,000 Repairs to
Public works 20,000
£105,000.
£105,000,
I have now carefully gone over the actual present financial position of the Colony and reviewed its prospects as far as they can be conjectured from existing facts, and have shown that the Revenue is barely equal to the ordinary Ex- penditure, and the maintenance in repair of the existing public I have shown also that the surplus in hand is already works. fully appropriated either for undertakings absolutely indispen- sable or urgently desired: and I submit, therefore, that the Colony is not in a position consistently with a sound financial policy to meet any such payment as that proposed by His Grace. Indeed it could only be made at all by the substitution of it for some of the items of Expenditure which I have detailed; and I respectfully submit that even assuming for the sake of argument the justice of calling on Hongkong for such contribution it is premature to do so. The Colony has been self supporting only for the last four years, up to which time it was dependent on Parliamentary aid. During that period of depression all the Establishments were kept almost below the scale necessary for efficiency, whilst public reforms were postponed and public works allowed to fall into decay. A sudden reaction of prosperity brought with it the necessity for a corresponding outlay--and whilst every thing is still in a state of transition, and before former short comings are made good, it would indeed be a pity if a demand were enforced which must either interfere with the development of the Colony or plunge it once more into financial embarrassinents.
I am unable, however, to concur with His Grace as to the justice of requiring the Colony, even if able, to contribute towards the expenses of the Troops stationed there. Hongkong is altogether an exceptional case and bears no analogy to such great producing plantations as "Ceylon, Mauritius, and the Principal Australian Colonies" which you inform me are "to be called upon to contribute more liberally towards the support of Her Majesty's "Troops which are maintained in those Colonies chiefly for the protection of Colonial "Interests." The Troops in Hongkong are stationed there for national and not for Colonial objects. They are not in my opinion necessary for the protection of any mere Colonial Trade or interests, oras is assumed in your despatch as an undoubted fact" for the security of its European Inhabitants." The large local Police Force which has lately been remodeled at a very heavy expense, and placed upon a Military footing, together with the Volunteer Artillery, recently established, would I consider be sufficient under any conceivable circumstances for the maintenance of internal order without recourse to Her Majesty's Troops. The Europeans all live together and the population is well in hand being collected within a radius of about two miles. The Chinese population are unarmed and though addicted to thieving and petty crimes are not given to eineutes and have now a large stake in the Colony. The national characteristic of the people too is a love of order and quiet, and a submission to the powers that be, except under long and unendurable provocation. There are further at all times from one to two hundred foreign Merchant Ships-partially armed-laying at anchor off the Town, and the Harbour being the head quarters of a large Naval Station and having a Dockyard and Docks is never likely to be totally denuded of Men-of-War. These considerations enable me confidently to assert that the presence of Her Majesty's Troops in Hongkong is not necessary for the security of its European Inhabitants or for the protection of Colonial interests.
Her Majesty's Troops are stationed in Hongkong I imagine because England's share in the Foreign Trade of China is estimated at over 30 Millions Sterling; because this Trade is carried on mostly in British vessels from the open Ports in China, at each of which we have British settlements and British subjects for whom we claim exemption from territorial jurisdiction; because in the management of this vast Trade, and in the government of our own subjects scattered along the whole length of the Seaboard of China in the Foreign settlements-now 14 in number--we are necessarily brought into constant intercourse with the Chinese Government, and there can be no doubt that the presence of a small body of Troops somewhere nearer China than India has an excellent effect in averting difficulties, while they form a basis for operations, if misunderstandings should unfortunately arise. Such being the case the only place in the China seas where Troops can be permanently stationed is Her Majesty's Colony of Hongkong.
The connection of the Colony of Hongkong with this Foreign Trade is very slight and remote. The buyers and sellers do not reside there. The Trade is carried on outside it. The Colony produces nothing itself and the Produce exported from China never touches its shores. The Tea aud Silk is all bought and shipped at the open Ports, to which Markets also the great bulk of the Imports is consigned direct. The connection of Hongkong with this great Trade consists chiefly in the fact that a certain number of the Heads of the China Houses and Banks elect to live in Hongkong as a convenient centre from whence to direct the operations of their Establishments scattered throughout China.
It is useful as a spot from whence as it were all the wires can be pulled; but for one British subject residing in Hongkong there are scores residing in the country where the actual Trade is carried on. It is at this moment a very doubtful question whether in consequence of the destruction of the Canton trade Shanghai would not be a more convenient directing centre for the foreign trade than Hongkong, and already some of the large Houses have moved there: and I cannot well conceive a policy more likely to drive them all there than to place the Residents in Hongkong under contributions for national objects from which those residing in the open Ports in China are free. It would be placing Hongkong at a most unfair disadvantage and might just turn the scale which is at present hanging in the balance.
The Chinese traffic of the Colony it must be remembered is quite distinct from the Foreign Trade and it is the Chinese who have made Hongkong what it is, and not its connection with the Foreign trade. The Chinese have flocked to the Colony for the advan- tage which it offers of a quiet and secure Government than which a Chinaman values nothing more, and for this they have been made to pay. They constitute 98 per cent of the popula- tion and probably contribute nearly a similar proportion of the revenue. They have made the Colony the centre of a large local coasting trade-a Depôt at which the produce of the North and South destined for consumption in China changes hands. And although this is a trade which enriches the Colony, it is one in which no national interest is concerned, while the chief profit derived by the Colony from the Foreign Trade (which is an object of National interest, and for the protection of which Troops are maintained in China) con- sists in the mere personal expenditure of those connected with that trade who use the Colony, as already observed, as a directing centre for their operations outside it. I conceive therefore, I am justified in asserting that the Troops stationed in Hongkong are maintained there for national as distinguished from Colonial objects, and that with those national ob- jects the Colony has but an insignificant connection compared with that of the British settlements at the open Ports in China, which can never be called upon for any contribution similar to that now asked from Hongkong.
I am far from denying that the Colony derives several indirect advantages from being the spot selected as a Military Station. The Garrison forms an agreeable addition to the society of the place, while the Troops add to its prestige and importance and lead to a considerable expenditure. But if Her Majesty's Troops are there as a matter of convenience for the Mother Country, and for the maintenance of National objects, and not for the protection of the Colony, I do not see that the Colony can justly be called on to contribute to their support simply because it profits by their presence; or at all events I do not see how in common fairness it could be refused the option of doing without them.
It is one thing to take with thankfulness and to profit by what you can get for nothing, and another to pay an exorbitant price for what, although acceptable, is not indispensably necessary.
I am aware it may be said, "Oh it is well known the Troops cannot be withdrawn and so "the threat to do so, is a mere brutum fulmen." But I would answer that if they cannot be withdrawn it is because they are indispensable for Imperial purposes, for that as far as the Colony is concerned I think they might safely be removed;" and I can only say in sup port of my opinion that I am prepared to undertake the responsibility of maintaining law and order in the Colony without Troops, if Her Majesty's Government should think it un-
104
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