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(d) The preliminary money deposit coupled with the foregoing guarantees will protect the Government against any liability; the arrangement may of course tend to raise the price of the work, for timid con- tractors especially will charge for these risks, but the increase in the expense will fall on the lot-owners. At whatever cost to others the Government must protect itself This cannot be helped. against liability in any shape or form, except of course in respect of its own reclamations opposite Government lots, and there the Government must accept risks like any other lot-ówner.
The foregoing safeguards will do away--as regards the Government-with any speculative element that may appear to exist if the work is done for the lot- owners, but if the Government does the work for itself it must take on itself what- ever risks and uncertainties there may be in the venture, and itself become the speculator.
A printed contract will have to be entered into between the Government and each individual lot-owner by which as already stated the Government must be pro- tected absolutely against any liability.
2. The assessment of values ($7,910,821) of the new lands to be reclaimed from the sea is based on the prices at present ruling in the leasehold-estate market in this Colony, and may be accepted as correct. Each allotment of reclamation
has been appraised at the market value of the piece of land iminediately behind it. The figures are given in great detail in a voluminous Appendix to my letter to the Colonial Secretary of the 1st of June, 1888. I requested Mr. CHATER to give me bis ideas as to the price of land along the Praya, independently of my own appraisals, and I found the discrepancies between us were trifling and limited only to two of the Sections.
3. If the Government were to carry out the reclamation on its own account, the profit would of course be lessened by the amount of compensation to be paid to the present marine lot-owners; that is to say the $5,764,593 would be materially reduced, though it is certain it would not disappear entirely since it is impossible to conceive that the claims for compensation could amount to anything like this sum. But whatever profits may be left, large or small, after paying off all indemni- ties, the Governor considers such profits might more fitly go into the Colonial Treasury than into the pockets of the marine lot-owners, and on this account His Excellency thinks the work might be done by the Government ou its own account and for its own benefit, more especially in view of the fact that the doing of the sections by piecemeal reduces risk and limits the consideration of possible claims to small groups at a time, and thus gives an opportunity to advance or recede as the Government may elect hereafter. As regards risks of injury to the work by typhoons I consider such risks would be the same in either case, for the sections would be quite as liable to be injured or destroyed if carried out one after the other in detail as they would be if done as a whole at the same time.
4. The main advantage would therefore be in the having to deal only with a small number of marine lot-owners' claims at one time, and with regard to marine lot-owners' claims, I do not find in the whole of these papers or in the many oral discussions that have taken place in connexion with this proposed scheme of Recla- mation that the Governor has ever had a legal opinion as to the rights of the Crown in respect of foreshores opposite lands leased to individuals.
5. Briefly recapitulated the Government contention has always been that the foreshore is the property of the Crown absolutely, that the Crown has the right to reclaim the sea, at the public expense, in front of the premises of any marine lot- owner and to interpose fresh building sites between those premises and the sea, subject to the payment of such compensation to the lot-owner as may be due him for losses or injury accruing by the interposition of such new lands and of buildings erected thereon.
6. As set forth by Mr. FRANCIS, Q.C. the contention of the marine lot- owner (doubtless put into his head by Mr. FRANCIS himself) is: that in granting him a marine lot-lease for 999 years the Crown has invested him for that term with an indefensible right (by way of casement), of direct access to Fligh Water Mark, from which access the Crown has no legal power to cut him off. He
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contends that the shore may silt up from natural causes, or it may--with the con- currence of himself-be reclaimed by the Government, and that tlie land thus silted up or artificially formed may be absolutely the property of the Government, but that the Government, cannot without trespass on the legal rights acquired by him under his marine lease, utilize such land for building or put it to any other uses.
7. If there be anything in the contention of Mr. FRANCIS it is clear that the Governor would not have the power to carry out the Reclamation at the public expense for the public benefit, and His Excellency would have no option but to adhere to the present plan and give the lot-owners whatever benefit may accrue to them under the scheme after reserving one half their reclamation for public roads. Would it not be desirable in these circumstances to obtain the Attorney General's opinion on the opinion of Mr. FRANCIS?
It seems to me that before the Governor can be in a position to make any specific recommendation to the Secretary of State in the matter of these Recla- mations His Excellency must have this point as to the alleged rights of marine lot-owners thoroughly cleared up.
8. I entertain a strong view in favour of the proposed scheme as a whole for the reasons set forth at such great length in my Report to the Acting Governor (General CAMERON) dated the 18th of July, 1887, (C.S.O. 1997) and in view of the dearth of building sites in the town and of the appalling yearly junudation of i Chinese from the mainland which is likely to culminate in an epidemic that will engulph the Colony unless steps are taken to build more houses, I consider that the Colonial Government should not stop short at a mere acquiescence in the scheme but that it should--in its wisdom-go much farther and hold out such inducements to the marine lot-owners as will secure the earliest possible realization of the scheme by private enterprise in the manner proposed.
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9. For reclamations from the sea made hitherto at the expense of the marine lot-owners the Government of Hongkong has never charged premium in money. It has contented itself with premium in land. In the proposed Reclamation, the total area proposed to be recovered from the sea will be nearly 58 acres, of which five will be Government property and the remaining 53 will be private property. Of these 53 acres of private reclamation the Government proposes to take for public roads 26 acres and will leave the marine lot-owners nearly 27 for their own use. the filling in of the 26 acres to be taken away from them, these people will have to expend no less a sum than $1,000,000. Of course it may be said that in devoting this million of dollars to the construction of roads and streets the lot-owners are benefiting themselves equally with the public, inasmuch as wide and hand- some streets will be sure to enhance the value of their reclamations. On the other hand does not the Public benefit very largely by the creation of these proposed roads reclaimed for them from the sea at enormous cost but towards which they contribute nothing?
10. It may be that in order to secure the early realization of this scheine at I inay the expense of the marine lot-owners and not of the Colonial Treasury have counselled over liberal terms. If I have done so it has been because of the great urgency of new building sites for the relief of a population congested to a degree that cannot but cause anxiety to thinking minds, and because of the risk of the scheme being deferred to an indefinite date in the future if claims and litigation come to interpose between the intention of the Government to do the work on its own account and the actual realization of that intention.
11. As however it seems to me that the question as to who shall carry out the work and reap the full benefits from it, wholly pivots on the correctness or otherwise of the contention of the marine lot-owners as explained by Mr. FRANCIS, His Excellency will no doubt wish to have this point cleared up before going further in the matter and I would therefore advise that the papers be referred to the Attorney General for his consideration and opiniou on this particular point.
28th June, 1888.
J. M. PRICE.
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