CO129-253 - Public Offices & Others - 1891 — Page 180

1.4

7

177

Sir,

T. No. 18191

88

Despatch of 2nd April, 1863, para. 14.

Para. 15.

Enclosure in No. 6.

Treasury to Colonial Office.

Treasury Chambers,

28th September, 1889. 1. The Lords Commissioners of Her Majesty's Treasury have discussed in a letter which is now before the Secretary of State the question of the Military Contribution to be asked from the Straits Settlements. In the present letter they will express their opinion upon the contribution which the Colony of Hong Kong may fairly be expected to make towards the cost of its defence.

Defence of Colonies, Naval and Military.

2. The defence of the Colonies is entrusted to two forces the Navy and the Army. Hitherto the British taxpayer has defrayed unaided the whole cost of the Navy. The altered conditions of naval warfare, however, have added, and are adding, so much to the cost of naval defence that the question must arise hereafter whether the pros- perous settlements which are members of the Empire, should not contribute in reasonable proportion to the cost of a service so essential to their security. The Australian Colonies have indeed anticipated the question, so far as they are concerned, by offering spontaneously a liberal subsidy towards the provision and maintenance of the ships required in their waters. The Imperial Government undertakes alone the cost of the service in other quarters, and my Lords raention the subject hore, not because they are about to ask a Naval Contribution from Hong Kong, but because the Colonial Office and Colonial Governments are apt to forget or overlook the heavy charge which the Imperial Government incurs in providing for the naval defence of the Colonies, and to take it for granted that the Colonies can only be asked for a proportion, and, as the Colonial Office contends, a very moderate proportion, of the cost of military defence..

The Garrison of Hong Kong.-

3. Hong Kong became a Colony in 1844. During the first 14 years of its existence as a Colony, it cost the Imperial Exchequer 273,0001. for its civil establishunent, exclusive of any sum spent during that period on naval and military protection. It became self- supporting, so far as the civil government was concerned, in 1859. About this time the Imperial Government found it necessary to increase largely the Imperial Military and Naval Estimates. In 1861 attention was directed to the subject of Colonial Militery Expenditure, and a Committee of the House of Commons was directed to enquire whether the most wealthy and important Colonies might not, with due regard to justice and to their own interests, defray a larger proportion of the cost of their military defence, than up to that time had been laid to their charge.

The Committee advised that those Colonies which more particularly imposed a burthen upon the Imperial Exchequer for military defence, should be required to increase considerably their contributions towards that object, if the state of their revenues. would justify the additional charge.

4. The revenue of Hong Kong averaged for the years 1860, 1861, 1862, rather more than 117,000, and the Duke of Newcastle, in disregard of the urgent remon strances and despairing predictions of the then Governor (Sir Hercules Robinson), of the Colonial authorities, and of the community itself, required a Military Contribution of 20,0002, equivalent to rather more than one-sixth of the entire revenue, the garrison. being then estimated at 1,000 men of all ranks, costing 100,000l. a-year.

The Duke of Newcastle intended that the contribution should remain in force for five years, and should then be subject to such revision as the altered circumstances of the Colony might require. It is clear that his Grace contemplated an increase of the contribution at the end of the five years, for he said that he desired, in fixing the amount at 20,000%, uot to press too heavily at first upon the Colonial revenues, and the Governor of Hong Kong himself interpreted this passage as meaning that the contribu- tion was to be raised to a higher rate at a future occasion.

5. Changes, however, occurred in the post of Secretary of State, and at the expiration of the five years, the intention of the Duke of Newcastle appears to have been forgotten. The contribution remained unchanged, and nothing more was heard upon the subject until 1884, when the Secretary of State for War wrote to the Colonial

NOTE.It should be noted that roference is made in the letter to two separate Committees which have reported on subjects connected with the Military Defence of the Colonies. 1. A Committee on Colonial Military Defence. 2. A Committee on Colonial Military Contributions, over which Sir A. Haliburton presided.

(N.B.-This note forms part of the Treasury letter.)

Office that the Military Contribution paid by the Colony would have to be reconsidered with reference to the proposed increase of the garrison. No action followed this intimation, and revision of the existing arrangements was not undertaken until the Committee on Colonial Military Contributions, consisting of Sir Arthur Haliburton, Mr. Bramstou, and Mr. Ryder, made their report on Hong Kong in July, 1888-three and twenty years after the actual imposition of the contribution which the Duke of Newcastle had demanded in 1863. The Committee on Colonial Military Contributions have, in the case of Hong Kong, as in that of Singapore, discharged thoroughly the task entrusted to them. They have put before Her Majesty's Government the facts of the case in compact and intelligible form, and the Treasury, the War Office, and the Colonial Office are now fully informed of the intentions of those who tixed the present contribution, and of the financial progress of the Colony during the intervening period.

6. My Lords have stated that the contribution of 20,000%, as originally fixed, represented about one-sixth or one-seventh of the revenue of the Colony, and one-fifth of the military charge of the Colony defrayed by the Imperial Exchequer. In the intervening time the garrison has risen to 1,445 men of all ranks, exclusive of volun- teers, the cost to the Imperial Exchequer rising from 100,000 to 160,000l. a-year, The Colonial Defence Committee now recommend that the garrison of the future shall consist of 2,525 Imperial troops of all ranks, and of 493 local regulars, or 3,018 in all, costing about 280,000%. a-year. If the total net estimated cost of the British Army for 1889-90 be divided by the number of men ou the Home and Colonial establishments, exclusive of India (17,000,0007, by 152,000 men), the result gives 111 per man, and the corresponding cost of 3,000 men would be 333,0001. Sir A. Haliburton's Com- mittee exclude from their computation Militia and Volunteers, costing approximately 3,000% a-year.

7. The Committee further point out that the revenue of the Colony has risen since 1863 from an average of 568,000 dollars to 1,638,000 dollars, the amount as estimated for 1888. They reckon that after allowing for the loss which attends the discharge by silver-using communities of obligations payable in gold, the proportion of the Military Contribution to the revenue of the Colony is only 8 per cent., or one-half of the propor- tion which the contribution bore to the revenue in 1863.

8. My Lords observe that the Colonial Office has not in the case of Hong Kong, as in that of the Straits, indirectly reduced the Military Contribution by allowing the Colony to pay a sterling debt in silver at an obsolète rate.

Works and Buildings.

this

9. Sir A. Haliburton's Committee state when the defence of Hong Kong was under consideration in 1883-84, it was contemplated that the whole cost of the project, esti- mated at 100,0002, should be defrayed by the Colony. The Imperial Government has, however, subsequently decided that the Colony should provide the works, and the Imperial Government the armament. According to the first estimate framed upon basis, 60 per cent, of the expenditure would fall upon the Colonial, 40 per cent, upon the Imperial Exchequer. As the estimate now stands, 35 per cent, only will fall upon the Colonial, and 65 per cent. upon the Imperial Exchequer, the sums being respectively 116,0004 and 209,000l. My Lords cannot but observe that in this case, as in that of Singapore, the estimates upon which the Treasury gave its assent to the principle of partition, have been absolutely misleading. The War Office proposed by their estimate to throw the larger part of the defensive works on the Colony in the proportion of three to two. In effect, this proportion has been more than reversed. My Lords do not presume to criticize the principle upon which the estimate was based; they are willing to believe that error was unavoidable, but it is unfortunate that the errors in such cases should be always against the British taxpayer. They may at least plead that, had they not been misted by these erroneous estimates, they would to the best of their power have insisted upon a more equitable basis of partition. But the War Office does not even carry out its own rule of division, for it proposes to charge upon the British taxpayer the cost of submarine mining (about 9,0001) works, merely because the whole item of submarine mining had been omitted from the original estimate. It appears to my Lords neither logical nor equitable to punish the British taxpayer because the science of submarine mining was undeveloped at the time when the original estimate was framed.

Barracks.

10. It will be necessary to provide additional barracks at Hong Kong for double the existing garrison. The rough and preliminary estimate of cost is 212,0004, apart

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