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regarded it in this light; and yet I am bound to say that if the extremely lugubrious picture which the Honourable Member has painted of the condition and prospects of the Colony were a correct one, there would be at least ground for arguing the exist ence of the condition which would justify-I will not say repudiation--but breach of a legal contract, viz.: inability to pay other equally binding obligations in full. I am sure that the Honourable Member had no intention of this kind; and I gather that his object was simply to show our inability to pay these increased salaries in permanence in the absence of additional taxation. But whatever may have been the Honourable Member's intention, the effect likely to be created by his speech if unanswered, is far beyond this; and as I regard injury to the credit of the Colony as likely to inflict greater loss upon the Colonists than that involved in these increased salaries, even when coupled with the increased Military Coutribution. I have deemed it my duty to examine this subject calmly and deliberately in all its various bearings with a view to determine whether the picture of our position as drawn by the Honourable Member is a correct one, and I must now make a short further trespass upon your time in the endeavour to present to you the result of that examination.
In approaching the subject of the Honourable Member's speech, I am bound to bear testimony to its ability, and to admit that the painstaking research of which it bears evidence, has brought forward facts well worthy of reflective con- sideration; but on the other hand as the result of my examination of the question I find it impossible to regard it otherwise than as the address of an advocate which, to say the least, makes the most of the facts adduced in favour of his In order view, and entirely ignores all those which tell in favour of the other side. to heighten the effect of the gloomy picture which (whatever his motive) it has pleased him to draw, he has instituted a contrast between the present, (as he would seem to allege) abject, position of the Colony, with that portrayed by my so-called "brilliant" despatch of October 1889, and he unmistakeably conveys the inference, though he does not actually say so, that the description there given was incor- rect. In one passage if correctly reported he alleges himself to be almost quoting my very words when he says that I referred to a vast commerce in a healthy state of progress with prosperity extraordinary and prospects magnificent." Now any one hearing or reading these words "prospects magnificent" (which by-the-bye I never used) as contrasted with his subsequent representation of the depressed condition of the Colony, would infer that I had dealt largely in prophecy as regards the immediate future, and that such prophecy had been falsified by the event, whereas this is not only not true but in one important respect the exact opposite of the truth. I indeed referred to a trade as apparently in a healthy condition of progress, despite the restrictive measures against Chinese in the United States and Australia, and the decline of the Tea Trade the full effects of which I mentioned as having not then been fully felt-and this reference I shall presently give reasons for believing correct--while I expressed no doubt that land would in the course of time become more valuable than it was then, and this I have still stronger reason to believe now. But, with reference to the immediate future I most distinctly expressed doubts whether speculation had not unduly raised the prices both of shares and of land, and plainly intimated the possibility of reaction and consequent distress to all those who had been speculating beyond their means. So far from partaking largely in prophecy whether about the immediate or distant future, my despatch dealt almost exclusively with facts, not one of which in so far as I know has ever been impugned; and the only passage other than those referred to in which the future was touched upon at all was the following:-" As far as is known all, or nearly all, of these Companies especially those whose field of operations is Hongkong, have good, some of them excellent, prospects of success.” And even here I am not expressing my own opinion, but (as is shewn from the words "as far as is known") the opinion of the community, and that I was entitled to infer from the prices of the shares and the fact that no note of warning had anywhere been sounded. It is true that I expressed no
dissent from this opinion, because I had no reason to do so, and it would have been presumptuous for me with regard to purely mercantile matters to express opinions opposed to those of a inercantile community. But even if the anticipation had been my own, I am by no means sure, despite the Honourable Member's statements, that I should have much cause to regret it. For I find some 26 out of the 35 Companies referred to are not only carrying on business with a paid-up capital of 6 millions, but appear to be on a sound footing. From the present value of the shares, the greater portion of the capital mentioned appears to have been well invested, while others of these Companies though their shares at this time of depression are at a discount cannot be yet said to be a failure as they have not yet had time to fully test their capabilities of success. It is no doubt true that 7 of the Companies referred to, not "many" as stated by the Honourable Member, are in liquidation, but even as regards these as well as some of the others which have not yet been successful it might very possibly have been said, not without a certain correctness, on their being launched, that their prospects were good, as their failure or comparative failure may have been due to faults of management or insufficiency of capital. And in confirmation of this view it may be observed that the enterprises of some of these Companies in liquidation, as for instance the Borneo Planting Companies have, I am informed, only quite recently found persons outside the Colony who sufficiently believe in their prospects to pay a considerable sum for their properties. Mentioning these things by the way as furnishing some justification, not of my own, but what I intended to convey as the public view of the prospects of these Companies, I must now point out that the aggregate capital of the Companies referred to which have failed or the shares of which are at a heavy discount, is extremely insignificant as compared with the total paid-up capital of local Joint Stock Companies which are at a premium and for the most part at a very high premium.
Taking up the list of local enterprises published in the Daily Journals I find that the shares of the Hongkong and Shanghai Bank with a paid-up capital of $9,300,000, backed as it now is by a reserve fund of over a million sterling, are worth now in the aggregate about $28,000,000. The shares of the two local Fire Insurance Companies with an aggregate paid-up capital of $800,000 are quoted in the one case at 500 in the other at 300 per cent. premium. The shares of the local Marine Insurance Companies with aggregate capital of $1,350,000 are quoted at nearly 300 per cent., 150 per cent. and 100 per cent. premium, respectively. Carrying my eye down the list I find the Hongkong and Whampoa Dock Company shares (with a paid up capital of 14 million dollars) are at 98 per cent. premium, while those of the Hongkong and Kowloon Wharf and Godown Company on which an aggregate of $1,000,000 is paid up are now worth over $1,590,000; the China and Manila Steam Navigation Company's shares with paid-up capital of $175,000 are at about 150 per cent.; and the $1,600,000 paid-up capital of the Hongkong, Canton and Macao Steam-boat Company is worth $2,660,000. Similarly the shares of seven other Companies (China Sugar Company, Hongkong Land Investment Company, Société des Charbonnages du Tonkin, Hongkong Hotel Company, Humphreys Estate and Finance Company, A. S. Watson & Co., Hongkong Ice Company) principally owned in Hongkong on which was originally paid $6,223,000 are now worth $12,940,000, which added to the figures repre- senting the paid-up capital and present market value of the Hongkong Bauk and 6 Companies just mentioned give a total of $22,010,500 paid in respect of shares which are now worth $56,177,500. This, however, gives only a partial view of the situation, A more complete view is furnished by the following statements and figures supplied to me by the Registrar of Public Companies.
"At the end of the year 1887 there were 26 public companies whose shares were dealt in in the Hongkong Market having an aggregate paid-up capital of $26,233,000 and the market value of which was then $46,870,125. In 1888 3 of "these Companies went into liquidation and a fourth reduced its capital by
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