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revenue for the year 1913 appears to include an item of $7,000,000 for salt. But the revenue under this head only reached 84,000,000 in 1912, as I am informed, and no allowance has been
made for the probable transfer of all revenue under this head from
the Provincial to the Imperial Treasury. The estimate of revenue also includes $2,000,000 for butchery and spirit taxes combined which is regarded as exceedingly optimistic.
3.
The financial situation is, therefore, very
bad. To deal with the note issue alone, which is at present at a
Some 20
discount of A per centum, and to protect the Provincial Treasury from further forgeries, it is necessary to make a new issue proper- -ly secured, and with it to redeem the old notes. Such security might be furnished partly by an appropriation from the Sextuple Loan and partly on the revenues of the Province But it is obvious that these latter must first be placed in a condition cap- -able of more than meeting current expenditure and of furnishing interest and sinking fund on the portion of the Loan allotted to
the Province.
4.
•
I see no prospect whatever of the existing
Provincial Government proving capable of accomplishing such financial reform. On the contrary they are likely to sink deeper and deeper into the pit which by their incompetence, dishonesty and weakness they have digged for themselves. One night view this result with equanimity were not the trade of this Colony threaten- -ed by a financial crisis in Kwangtung and did not financial stress drive the Kwangtung Government to objectionable intrigues to replenish their Treasury out of the pockets of the Chinese
resident in Hongkong.
5.
I have sent a copy of this Despatch to His
Majesty's Minister at Peking.
I have the honour to be,
Sir,
Your most obedient, humble servant,
Governor,&c..
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