082
[2]
5. Turning now to the Estimates for 1870, you will find that although they propose nothing very remarkable or which appears to invite special attention, they possess unusual interest as showing that, after many difficulties, a tolerably sound financial state has been attained, because it is one which gives fair promise of permanence. No fleeting surplus is shown by disposal of the Colony's Capital, viz. its land—the receipts from Licensed Play Houses do not appear as part of the Revenue and yet the permanent means of the Colony are made to meet all its liabilities and provide fairly, though not extravagantly, for the general demands of a Community in a state of progressive improvement.
6. So recently as 1867, the estimated surplus of the Colony's Assets over its Liabilities amounted only to $24,000, whilst of those, $60,000 were unavailable coins, which no creditor could have been compelled to accept, so that practically the Colony was bankrupt. The worst feature, however, of its financial position then, was not so much the diminishing surplus, as the fact that the Colony had been steadily dropping into this insolvent state from a condition of comparative affluence. Thus at the beginning of 1865, it possessed a bonâ fide surplus of $298,000--at the beginning of 1866, one of only $184,000-and at the commencement of 1867, an imaginary surplus of $24,000, but practically a deficiency of nearly $30,000.
7. It must be remembered also that in 1866, when I arrived, I found the Expenditure of the Colony increasing in proportion as its Income was diminishing --the worst of all conditions whether for States or individuals. So much was this the case that its actual Expenditure in 1865, exceeded its Revenue by $94,361, and in 1866 by $167,877. The Expenditure in 1867, however, was then decreased at once from $936,954 in the previous year, to $730,916—but not without leaving the Military Contribution in arrear. At the same time the Revenue was permanently raised by means of the Stamp Ordinance, which however did not come into operation till late in 1867 and thus the Colony began to right itself slowly—its Expenditure in 1867 being $128,584 within its Revenue, and in 1868 $142,794—though in the latter year all arrears of the Military Contribution were paid off.
8. Probably many suppose these results could only have been produced by using the fees received from the Police measure of licensing Gambling Houses under certain Regulations. That, however, is altogether a mistake. The Colony has recovered from its difficulties, paid its current expenses, and discharged all its heavy liabilities without using for those purposes one cent of the License fees in question. At the same time I look doubtfully on the estimate of $120,000 as excess of Assets over Liabilities at the end of this year. I also question the excess of Assets, put down for the end of 1870, viz.: $111,000. I recommend you not to count on more than $30,000 really available surplus Assets at the latter period. (Vide Estimates, Page 3.)
9. It is undeniable, and I see no reason to regret it, that much assistance in other ways, as we shall presently find, has been derived by the Colony indirectly from those License Fees. It is, however, equally true that all its previous debts were paid, and its ordinary current expenditure met, as well as considerable Public Works carried on out of its own permanent Revenue. This would appear more clearly, if I could lay before you the Colony's account with the Special Fund, as for brevity it may be styled. I am, therefore, sorry I cannot publish it as its details are still under consideration of Her Majesty's Government. Full information, however, on the subject is accessible to individual members of Council. You will find, however, from the Estimate of the Colony's Liabilities at the end of 1868, (Supplementary Estimates, Page 3) that amongst the Liabilities of the Colony is inserted an amount due to the Special Fund of $160,065. At the
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end of the current year there will probably be an amount due to it of $140,000. The difference, therefore, between the latter sum and the $317,807, estimated total receipts of the Licenses from September 1867 to the end of this year, would indicate the amount appropriated from that fund during more than two years and a quarter, and that amount is $177,807.
10. Let us, however, inquire how that money has been expended. You will not find it appropriated to any selfish outlay on objects calculated to diminish the burdens or promote the convenience of the Foreign Residents. Expenses which should be borne by the ordinary Revenue of the Colony continue to be so borne, and I may inform you that it is not merely the wish, but the positive order of Her Majesty's Government that no part of the Special Fund be expended in relieving you of the taxation entailed by duties which every civilized Community is bound to discharge.
11. The appropriation of any part of that Fund has therefore been limited: 1st—to purposes auxiliary to the Police object for which the Licensing system was instituted, and which alone could justify such an experiment, viz.: the suppression of crime and more especially crime such as was formerly generated by frequent contact of the ignorant and needy with the criminals of the Colony in illegal gambling haunts, where the former were tempted to join in schemes for Piracies, Burglaries, and Theft. It has, therefore, been suggested that improvements in the constitution of the Police, whether by land or water, and in all appliances for detection of crime, which could not have been undertaken by the unaided ordinary Revenue of the Colony, might on that principle be temporarily borne by the Special Fund. Thus the cost of the Colonial vessels, which patrol the waters of the Colony, and whose utility becomes more apparent by every day's experience, is at present borne by the Special Fund. The erection of a Telegraph round the Island, and of additional Police and Telegraph stations to complete the guarded circuit so effectually as to render improbable future landings of such parties, as attacked Sowkewan on the 18th of April last, may be similarly regarded as a reasonable charge on the Fund for suppression of crime.
12. Nevertheless, to prevent any diminution of the Police Rates being effected by an unfair resort to the Special Fund, it has also been suggested that the Colony should always provide from its ordinary Revenue the means of defraying the highest Expenditure on its Police incurred in any year preceding the License system. That year was 1866 and the actual expenditure then on the Colonial Police was in round numbers $120,000, an amount ascertained after deducting from the sum charged against Police, several items improperly entered under that head—as for example Lighting Street Lamps, $20,000—an item now placed under "Miscellaneous." Therefore $120,000 is the least sum for Police which the Colony is bound to find from its own resources. At the same time to promote Police protection and prevent an inconvenient accumulation of the License Fund, expenditure in excess of that amount, if approved by the Secretary of State, may be temporarily borne by the Special Fund.
13. 2ndly. You may assume that no application of the License Fund for any but the Police purposes, already explained, will be permitted unless for the special benefit and improvement physically or morally of the Chinese population. The Council is aware that none but persons of Chinese or Malay origin, and that no females of any nation whatever, are now admitted into the Licensed Houses, whilst the License Fees have been proportionally reduced so as to compensate for such restrictions. Even foreign travellers are not permitted to visit the Houses, The Chinese alone frequent them. Therefore, the Fees if used at all, and it would not be easy to justify a perpetual and unmeaning accumulation of them, ought
082
[2]
5. Turning now to the Estimates for 1870, you will find that although they propose nothing very remarkable or which appears to invite special attention, they possess unusual interest as shewing that, after many difficulties, a tolerably sound financial state has been attained, because it is one which gives fair promise of permanence. No fleeting surplus is shewn by disposal of the Colony's Capital, viz. its laud--the receipts from Licensed Play Houses do not appear as part of the Revenue and yet the permanent means of the Colony are made to meet all its liabilities and provide fairly, though not extravagantly, for the general demands of a Community in a state of progressive improvement.
6. So recently as 1867, the estimated surplus of the Colony's Assets over its Liabilities amounted only to $24,000, whilst of those, $60,000 were unavailable coins, which no creditor could have been compelled to accept, so that practically the Colony was bankrupt. The worst feature, however, of its financial position then, was not so much the diminishing surplus, as the fact that the Colony had been steadily dropping into this insolvent state from a condition of comparative affluence. Thus at the beginning of 1865, it possessed a bonâ fide surplus of $298,000--at the beginning of 1866, one of only $184,000-and at the commen- cement of 1867, an imaginary surplus of $24,000, but practically a deficiency of nearly $30,000.
7. It must be remembered also that in 1866, when I arrived, I found the Expenditure of the Colony increasing in proportion as its Income was diminishing --the worst of all conditions whether for States or individuals. So much was this the case that its actual Expenditure in 1865, exceeded its Revenue by $94,361, and in 1866 by $167,877. The Expenditure in 1867, however, was then decreased at once from $936,954 in the previous year, to $730,916-but not without leaving the Military Contribution in arrear. At the same time the Revenue was permanently raised by means of the Stainp Ordinance, which however did not come into operation till late in 1867 and thus the Colony began to right itself slowly-its Expenditure in 1867 being $128,584 within its Revenue, and in 1868 $142,794--though in the latter year all arrears of the Military Contribu- tion were paid off.
8. Probably many suppose these results could only have been produced by using the fees received from the Police measure of licensing Gambling Houses under certain Regulations. That, however, is altogether a mistake. The Colony has recovered from its difficulties, paid its current expenses, and discharged all its heavy liabilities without using for those purposes one cent of the License fees in question. At the same time I look doubtfully on the estimate of $120,000 as excess of Assets over Liabilities at the end of this year. I also question the excess of Assets, put down for the end of 1870, viz.: $111,000. I recommend you not to count on more than $30,000 really available surplus Assets at the latter period. (Vide Estimates, Page 3.)
9. It is undeniable, and I see no reason to regret it, that much assistance in other ways, as we shall presently find, has been derived by the Colony indirectly from those License Fees. It is, however, equally true that all its previous debts were paid, and its ordinary current expenditure met, as well as considerable Public Works carried on out of its own permanent Revenue. This would appear more clearly, if I could lay before you the Colony's account with the Special Fund, as for brevity it may be styled. I am, therefore, sorry I cannot publish it as its details are still under consideration of Her Majesty's Government. Full information, however, on the subject is accessible to individual members of Council. You will find, however, from the Estimate of the Colony's Liabilities at the end of 1868, (Supplementary Estimates, Page 3) that amongst the Liabilities of the Colony is inserted an amount due to the Special Fund of $160,065. At the
[3]
380
fend of the current year there will probably be an amount due to it of $140,000. The difference, therefore, between the latter sum and the $317,807, estimated total receipts of the Licenses from September 1867 to the end of this year, would indicate the amount appropriated from that fund during more than two years and a quarter, and that amount is $177,807.
10. Let us, however, inquire how that money has been expended. You will not find it appropriated to any selfish outlay on objects calculated to diminish the burthens or promote the convenience of the Foreign Residents. Expenses which should be borne by the ordinary Revenue of the Colony continue to be so borne, and I may inform you that it is not merely the wish, but the positive order of Her Majesty's Government that no part of the Special Fund be expended in relieving you of the taxation entailed by duties which every civilized Community is bound to discharge.
11. The appropriation of any part of that Fund has therefore been limited: 1st-to purposes auxiliary to the Police object for which the Licensing system was instituted, and which alone could justify such an experiment, viz.: the suppression of crime and more especially crime such as was formerly generated by frequent contact of the ignorant and needy with the criminals of the Colony in illegal gambling haunts, where the former were tempted to join in schemes for Piracies, Burglaries, and Theft. It has, therefore, been suggested that improvements in the constitution of the Police, whether by land or water, and in all appliances for detection of crime, which could not have been undertaken by the unaided ordinary Revenue of the Colony, might on that principle be tem- porarily borne by the Special Fund. Thus the cost of the Colonial vessels, which patrol the waters of the Colony, and whose utility becomes more apparent by every day's experience, is at present borne by the Special Fund. The erection of a Telegraph round the Island, and of additional Police and Telegraph stations to complete the guarded circuit so effectually as to render improbable future landings of such parties, as attacked Sowkewan on the 18th of April last, may be similarly regarded as a reasonable charge on the Fund for suppression of crime. 12. Nevertheless, to prevent any diminution of the Police Rates being effected by an unfair resort to the Special Fund, it has also been suggested that the Colony should always provide from its ordinary Revenue the means of defraying the highest Expenditure on its Police incurred in any year preceding the License system. That year was 1866 and the actual expenditure then on the Colonial Police was in round numbers $120,000, an amount ascertained after deducting from the sum charged against Police, several items improperly entered under that head-as for example Lighting Street Lamps, $20,000--an item now placed under "Miscellaneous." Therefore $120,000 is the least sum for Police which the Colony is bound to find from its own resources. At the same time to promote Police protection and prevent an inconvenient accumulation of the License Fund, expen- diture in excess of that amount, if approved by the Secretary of State, may be temporarily borne by the Special Fund.
13. 2ndly. You may assume that no application of the License Fund for any but the Police purposes, already explained, will be permitted unless for the special benefit and improvement physically or morally of the Chinese population. The Council is aware that none but persons of Chinese or Malay origin, and that no females of any nation whatever, are now admitted into the Licensed Houses, whilst the License Fees have been proportionally reduced so as to compensate for such restrictions. Even foreign travellers are not permitted to visit the Houses, The Chinese alone frequent them. Therefore, the Fees if used at all, and it would not be easy to justify a perpetual and unmeaning accumulation of them, ought
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