4. This contention appears to Lord Knutsford to be well founded, and it seems to his Lordship that no arrangement will be possible under the circular enclosure of 9th June, 1890, until a decision has been arrived at as to the relative shares of the Home and Colonial Governments in the value of the land. All these sites are Colonial assets, and are valuable to the Colony though not immediately available for its use; on the other hand, the military authorities occupy them gratuitously, and will continue to do so as long as they are required for military purposes. Under these circumstances it is evident that each has an interest in the land, which should be capable of assessment, and it can hardly be expected that the Colony should account to the military for the money value of its own interest in the land.
5. The same question is raised, or will be raised in other Colonies, and it seems to his Lordship most desirable that these relative shares be ascertained without delay; and he will be ready to join Mr. Stanhope in taking such steps as may be agreed on for the purpose. It may be admitted that the value of the military interests cannot be defined with complete accuracy, but his Lordship is disposed to think that the right to occupy the land, subject as it is to be terminated at any time by the direction of Her Majesty's Government, could not be assessed at a higher money value than one-fourth of the fee simple value of the land. But even this may be found to be too high or too low a rate if tested by the principles on which are based the actuarial tables used by land agents in England, in respect of properties in which two parties have each an interest, and it may be advisable to consult on the subject some leading firm of land surveyors and valuers. His Lordship would be glad to be favoured with Mr. Stanhope's views upon this question.
6. It will be observed that Mr. Fleming also contends that the arrangement is unfair if the Colony is to contribute the whole value of surrendered lands towards the cost of erecting buildings on a new site, and is also to provide the new site, for which in its turn the Colony might be required to pay, if afterwards surrendered by the military. Lord Knutsford considers that there is much force in this objection, and that it would only be just that in estimating the cost of new buildings, the Colony, if it were required to contribute the whole value of the old site, should be credited with the value of the new site. But if, as suggested above, only the value of the military interest in the land is to be calculated under the circular of June, 1890, this further question is of less importance.
JOHN BRAMSTON,
It would be incorrect to say that such land had been "gratuitously acquired" by the Colonial Government. It would be the fact that land, by the military occupation of which the Colonial Government had suffered an increasing annual loss, had been restored to it, being no longer suitable for the purpose for which it was originally granted.
I am at a loss to understand how the Imperial Government could justly claim the unearned increment acquired by the useless ground being incorporated in the city. And the sale (for that is what it practically amounts to) to the Colony of land which was originally freely bestowed by the Colony on the War Department, irrespective of any immediate requirements by that department, would appear to be a scarcely legitimate way of improving the Imperial finances.
7. For the better consideration of this question I have obtained from the Surveyor-General a return (copy of which is enclosed) showing the area and value of all lands in Victoria and Kowloon in military occupation. It does not include lands outside Victoria and Kowloon occupied for forts and defensive purposes.
Mr. Brown estimates the value of such lands as have been obtained by free grant from the Colonial Government at 4,442,205 dollars.
The value of the lands rented and purchased by the War Department he estimates at 541,611 dollars.
Taking the total of 4,983,816 dollars as the value of the lands in military occupation, and which are treated, although not so under the actual terms of law, as being exempt from rates and taxes, it will be seen from the enclosed report* of the Assessor of Rates, that 37,000 dollars represents the annual loss in revenue which the Colony suffers on account of the immunity of the Imperial Department from the incidence of taxes.
But this is a very small item compared with the amount which this Government loses in Crown rents and premiums on the sale of all this land, which is some of the most valuable in the Colony.
Sir William des Voeux, in his despatch, No.334 of the 31st of October, 1889, mentioned that he estimated the total amount which this Colony paid annually for its military defence at 300,000 dollars, and the detailed returns, which I enclose, will, I think, show that your Lordship that his estimate was not an exaggerated one.
8. Taking these facts into consideration, I think your Lordship will agree with me that the Military Establishments in this Colony are an excessively heavy burden, and that in place of making ever-increasing, and what I cannot but regard as exorbitant demands upon this Colony, the Imperial Government should endeavour to lighten that burden as much as possible.
The War Department has, by fortuitous circumstances, been allotted a vast area of land in the very heart of the best quarter of the city, thereby causing immense loss of revenue and much inconvenience to the Colony, and their endeavour should be to remedy, where and whenever possible, this abnormal state of things, instead of endeavouring to gain still greater advantages.
E. FLEMING.
Enclosure in No.10.
Administrator Fleming to Lord Knutsford.
Government House, Hong Kong,
8th October, 1890.
5. The contingency mentioned in Section 6, cannot happen under existing arrangements, as a reference to the Duke of Newcastle's despatch, No.15 of the 27th of January, 1864, will show. It is there laid down that land not required for military purposes will revert to the Colony, the Colony, however, being bound to make reasonable compensation for the improvements which have been effected on the abandoned site, and also that if the abandonment imposes on the Imperial Government the necessity of procuring a fresh site elsewhere, that site must be acquired at the expense of the Colony.
6. The above arrangement appears to me an equitable one, and this Government would, I venture to say, be at all times favourably disposed to defraying the cost of military buildings on a new site, provided that such cost was within the value of an old site surrendered to them, but where the Imperial Government has acquired for a specific purpose a piece of land, which was at the time of comparatively small value, but has, through becoming incorporated in the city, perhaps become of greatly enhanced value, and has no further use for such land, nor desires to replace it by land elsewhere, I certainly think that the land should revert unconditionally to the Colonial Government.
No.11.
War Office to Colonial Office
War Office,
5th September, 1891.
7. It seems unnecessary to discuss the causes which have led to the increased value of properties held by the military for the defence of the Colony. The primary cause of the increase in the value of Hong Kong lands, and in the general wealth of the Colony, is clearly the confidence and safety which the Colony has enjoyed under the protection of the Imperial Government, a protection which has only been secured by an expenditure of many millions of Imperial revenues, while the Contributions of the Colony, to the same end has been comparatively infinitesimal.
Page 1271
Hong Kong
8
in No. 9,
10
4. This contention appears to Lord Knutsford to be well founded, and it seems to his Lordship that no arrangement will be possible under the circular Euclosure of 9th June, 1890, until a decision has been arrived at as to the relative shares of the Home and Colonial Governments in the value of the land. All these sites are Colonial assets, and are valuable to the Colony though not immediately available for its use; on the other hand, the military authorities occupy them gratuitously, and will continue to do so as long as they are required for military purposes. Under these circumstances it is evident that each has an interest in the land, which should be capable of assessment, and it can hardly be expected that the Colony should account to the military for the money value of its own interest in the land.
5. The same question is raised, or will be raised in other Colonies, and it seems to his Lordship most desirable that these relative shares be ascertained without delay; and he will be ready to join Mr. Stanhope in taking such steps as may be agreed on for the purpose. It may be admitted that the value of the military interests cannot be defined with complete accuracy, but his Lordship is disposed to think that the right to occupy the land, subject as it is to be terminated at any time by the direction of Her Majesty's Government, could not be assessed at a higher money value than one-fourth of the fee simple value of the land. But even this may be found to be too high or too low a rate if tested by the principles on which are based the actuarial tables used by land agents in England, in respect of properties in which two parties have each an interest, and it may be advisable to consult on the subject some leading firm of land surveyors and valuers. His Lordship would be glad to be favoured with Mr. Stanhope's views upon this question.
•
6. It will be observed that Mr. Fleming also contends that the arrange- ment is unfair if the Colony is to contribute the whole value of surrendered lands towards the cost of erecting buildings on a new site, and is also to provide the new site, for which in its turn the Colony might be required to pay, if afterwards surrendered by the military. Lord Knutsford considers that there is much force in this objection, and that it would only be just that in estimating the cost of new buildings, the Colony, if it were required to contribute the whole value of the old site, should be credited with the value of the new site. But if, as suggested above, only the value of the military interest in the land is to be calculated under the circular of June, 1890, this further question is of less importance.
JOHN BRAMSTON,
11-
It would be incorrect to say that such land had been "gratuitously acquired" by the Colonial Government. It would be the fact that land, by the military occupation "of which the Colonial Government had suffered an increasing annual loss, had been restored to it, being no longer suitable for the purpose for which it was originally granted.
I am at a loss to understand how the Imperial Government could justly claim the unearned increment acquired by the useless ground being incorporated in the city. And the sale (for that is what it practically amounts to) to the Colony of land which was originally freely bestowed by the Colony on the War Department, irrespective of any immediate requirements by that department, would appear to be a scarcely legitimate way of improving the Imperial finances.
7. For the better consideration of this question I have obtained from the Surveyor- General a return (copy of which is enlosed) showing the area and value of all lands in Victoria and Kowloon in military occupation. It does not include lands outside Victoria and Kowloon occupied for forts and defensive purposes.
Mr. Brown estimates the value of such lands as have been obtained by free grant from the Colonial Government at 4,442,205 dollars.
The value of the lands rented and purchased by the War Department he estimates at 541,611 dollars.
Taking the total of 4,983,816 dollars as the value of the lands in military occupa- tion, and which are treated, although not so under the actual terms of law, as being exempt from rates and taxes, it will be seen from the enclosed report* of the Assessor of Rates, that 37,000 dollars represents the annual loss in revenue which the Colony suffers on account of the immunity of the Imperial Department from the incidence of
taxes.
But this is a very small item compared with the amount which this Government loses in Crown rents and premiums on the sale of all this laud, which is some of the most valuable in the Colony.
Sir William des Voeux, in his despatch, No. 334, of the 31st of October, 1889, mentioned that he estimated the total amount which this Colony paid annually for its military defence at 300,000 dollars, and the detailed returns, which I enclose, will, 1 think, show that your Lordship that his estimate was not an exaggerated one.
8. Taking these facts into consideration, I think your Lordship will agree with me that the Military Establishments in this Colony are an excessively heavy burden, and that in place of making ever-increasing, and what I cannot but regard as exorbitant demands upon this Colony, the Imperial Government should endeavour to lighten that burden as much as possible.
The War Department has, by fortnitous circumstances, been allotted a vast area of land in the very heart of the best quarter of the city, thereby causing immense loss of revenue and much inconvenience to the Colony, and their endeavour should be to remedy, where and whenever possible, this abnormal state of things, instead of endeavouring to gain still greater advantages.
E. FLEMING.
Enclosure in No. 10.
'Administrator Fleming to Lord Knutsford.
Government House, Hong Kong,
8th October, 1890.
5. The contingency mentioned in Section 6, cannot happen under existing arrange- ments, as a reference to the Duke of Newcastle's despatch, No. 15 of the 27th of January, 1864, will show. It is there laid down that land not required for military purposes will revert to the Colony, the Colony, however, being bound to make reasonable com- pensation for the improvements which have been effected on the abandoned site, and also that if the abandonment imposes on the Imperial Government the necessity of procuring a fresh site elsewhere, that site must be acquired at the expense of the Colony."
6. The above arrangement appears to me an equitable one, and this Government would, I venture to say, be at all times favourably disposed to defraying the cost of military buildings on a new site, provided that such cost was within the value of an old site surrendered to them, but where the Imperial Government has acquired for a specific purpose a piece of land, which was at the time of comparatively small value, but has, through becoming incorporated in the city, perhaps become of greatly enhanced value, and has no further use for such land, nor desires to replace it by land elsewhere, I certainly think that the land should revert unconditionally to the Colonial Government.
·
No. 11.J
War Office to Colonial Office
War Office,
5th September, 1891.
7. It seems unnecessary to discuss the causes which have led to the increased value of properties held by the military for the defence of the Colony. The primary cause of the increase in the value of Hong Kong lands, and in the general wealth of the Colony, is clearly the confidence and safety which the Colony has enjoyed under the protection of the Imperial Govern- ment, a protection which has only been secured by an expenditure of many millions of Imperial revenues, while the Contributions of the Colony, to the same end has been comparatively infinitesimal.
• Not here printed.
Hong Kong
8 1271
201
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