C.O. No. 7611
95
40248
489
Sir,
10
No. 88.
Colonial Office to War Office.
Downing Street,
27th May, 1895. In continuation of the letter* from this department of the 22nd instant, relative to the Military Contributions of the Eastern Colonies, I am directed by the Marquis of Ripon to trausmit to you, to be laid before Mr. Secretary Campbell-Bannerman, the draft of a despatch which Lord Ripon proposes, with Mr. Campbell-Bannerman's concurrence, to address to the Governor of Hong Kong relative to the contributions from that Colony.
A similar letter has been addressed to the Treasury.
EDWARD FAIRFIELD,
11
5. When the actual revenue of 1895 is known, should it be found that there was an excess of receipts over the estimate, a further payment of 17 per cent. of such excess can be made. If, on the other hand, the revenue should have fallen short of the estimate, the over-payment can be adjusted by deducting 174 per cent. of the deficit from the first instalment of next year's contribution. A similar course can be followed in each succeeding year.
6. It would probably be agreeable to all parties if a permanent ordinance were passed appropriating a percentage of 174 per cent, of the Colonial revenue to the use of the Imperial Government as a Military Contribution, thus removing what has been a much vexed question from the arena of annual debate.
Sir,
No. 89.
Treasury to War Office.
Treasury Chambers,
22nd June, 1895,
T. No.
8066
1
Sir,
Enclosure in No. 88.
Colonial Office to Governor, Hong Kong,
(Draft.)
Downing Street,
May, 1895.
With reference to the last paragraph of my despatch, No. 75, of 29th March last, I have the honour to inform you that, after careful consideration. Her Majesty's Government have arrived at the conclusion to fix the Military Contribution in future at a certain proportion, viz., 173 per cent., of the revenue of the Colony. This appears to offer a basis of settlement which is the most likely to be acceptable to all parties, and which can be adopted without an undue sacrifice of the claims of the taxpayers of this country.
2. Her Majesty's Government, although hitherto adhering to the principle that the contribution, whatever its amount, should be fixed for the time being in sterling. have never lost sight of the fact that it could not, consistently with the efficient administration of civil affairs, exceed a certain percentage of revenue, and that if at any time, through a diminution of receipts or a fall in the exchange value of silver, the percentage assumed undue proportions, then a case for the revision of the sterling demand would arise; but as a matter of fact, during the five years 1890-94, the average Military Contribution of Hong Kong has fallen considerably short of what the Home Government in 1890 seems to have considered a reasonable proportion of the revenue, namely, between 17 and 18 per cent., and even in 1894 it barely reached 17 per cent. As regards the current year, however, owing to the continued low rate of exchange, the contribution, if continued at the present rate of 40,000, would amount to nearly 20 per cent. of the revenue.
3. The expedient of fixing a proportion of revenue as the amount of the contribution will, I hope, prevent any further feeling of uncertainty and dissatisfaction, and will safeguard the rights of the Home Government as effectually as the expedient of fixing the amount for some years ahead, which was that adopted in my predecessor's despatch No. 3, of 20th January, 1890. In adopting the decision above indicated, Her Majesty's Government have been largely influenced by the consideration that so as the contribution is fixed in sterling, the continued uncertainty in the matter of long exchange is liable to cause a greater dislocation in the finances of the Colony than would be caused to the Imperial finances if the contribution is fixed in dollars.
4. It is to be understood that the revenue on which the percentage will be taken shall include receipts from all sources which are now brought into account as revenue, with one exception, viz., the proceeds of land sales or premia on leases, which are not strictly revenue, but the proceeds of the sale of capital assets. The revenue for 1895, less premia on leases, is estimated at 2,018,526 dollars, so that a contribution of 174 per cent. would amount to 353,242 dollars, and I have now to authorize you to limit the payments for this year to that amount in lieu of the maximum amount (384,000 dollars), provided in the Appropriation Ordinance.
* No. 101 of Correspondence respecting the Straits Settlements Military Contribution. It approves of the recommendations of the Contributions Committee in regard to a contribution based on a percentage of revenge, and promises to send draft despatch in due comve.
Adverting to the letter* from this department of the 14th instant, I am directed by the Lords Commissioners of Her Majesty's Treasury to enclose herewith, to be laid before Mr. Secretary Campbell-Bannerman, copies of three letters, dated the 14th instant, which they cause to be addressed to the Colonial Office respecting the Military Contributions of Hong Kong, Mauritius, and the Straits Settlements respectively, together with a revised draft despatch to the Governor of the last-named Colony on the subject, which their Lordships have proposed for the consideration of the Secretary of State for the Colonies.
Sir,
FRANCIS MOWATT.
Enclosure 1t in No. 89.
Treasury to Colonial Office.
Treasury Chambers,
14th June, 1895.
The Lords Commissioners of Her Majesty's Treasury have had before them Mr. Fairfield's letter of the 27th ultimo, enclosing a draft of the despatch which the Marquis of Ripon proposes to address to the Governor of Hong Kong, respecting the Military Contribution of that Colony.
My Lords concur in this draft, subject to the following amendments, which they suggest for the consideration of the Secretary of State, viz.:-
1. The part of paragraph 1 which begins with the word "after" and ends with the word "country" should form a separate paragraph, following what is now paragraph 2, which will forma a proper preface to it.
2. In paragraph 2, delete the words "seem to have," following the words
"Home Government in 1890."
3. In paragraph 3, substitute "calculated" for "liable," in the last line
but three.
4. In third line of paragraph 4, insert the gross" before "receipts."
FRANCIS MOWATT.
* No. 102 of Correspondence relating to Straits Settlements Military Contribution. Deals with the recommendation in the Report of the Contributions Committee (Section XI.) on the proposal to base the Military Contributions on a percentage of revenue.
† Enclosures 2, 3 and 4 refer to Straits Settlements and Mauritius only, and have been printed with the correspondence relating thereto.
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