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HONG KONG'S MILITARY CONTRIBUTION METHOD OF
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ASSESSMENT.
Memorandum accompanying War Office letter to the Treasury, No.16/Abroad/276 (F.l.) of April, 1929.)
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The Present Situation.
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It is an accepted principle that a Colony should pay in proportion to its means towards the general defence afforded it as part of the Empire. Originally, Hong Kong paid a fixed contribution in sterling. It was calculated on an estimate of the amount of surplus revenue that the Colony might pay, having regard to the cost of its garrison, without undue strain on its own capital requirements (to which surpluses were customarily devoted). * The disadvantages to the colony of this procedure were two
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The contribution being fixed, it had to be paid without regard to fluctuations in the prosperity
of the Colony.
The contributions being fixed in sterling, the Colony had to meet losses (and they were considerable) caused by the depreciation of silver currency
The proposal to overcome these difficulties by levying a percentage on local revenue assessed in local currency was discussed by the Haliburton Committee with reference to Hong Kong in 1894 (Section 10 of their Report), but not until the proposal was also put forward by the Straits Settlements did they seriously examine it (Section XI, 1895), and it was then adopted as a principle generally applicable. This principle has continued ever since, and it has not been essentially modified by various minor questions about the classes of revenue on which the percentage should be levied. At present, the military contribution of Hong Kong is based, in accordance with the above principles, on the cost of the garrison or 20% of the assessable revenue, whichever is less. The Colony has almost invariably paid on the latter basis. The Peel Committee (1927) did not recommend any change.
The New Proposal.
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A new proposal has been put forward by the Governor of Hong Kong in despatches dated 24th June, 1926, (No.298) and 28th July, 1928 (two), and supported by the Colonial Office, in letter Nor-5280271926 of 12th October, 1928, to the effect that the Colony should pay 12% of the annual valuation made for rateable purposes during the year previous to that in
which /
Haliburton Committee Report, Section 4,
dated 1888.
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See paragraph 10.
Appendix B,
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