Sessional_Paper_1885-1886 — Page 5

2

necessary for the immediate benefit of the public health.' Under these circumstances, I concur with the Executive Council in what appears to be the general opinion of the Colony, viz. that the present generation of Colonists ought not to be deprived of the advantages referred to, while it cannot, of course, be expected to defray the entire cost of works of a permanent and reproductive character; so that, consequently, it will be expedient to raise, on the exhaustion of the existing assets, a moderate loan not much exceeding the revenue of a single year. This question will not have to be decided in its details during the present Session; but, I desire to elicit the opinion of the Council on the principle involved."

3. In your address in reply, the Council said: "We agree with your Excellency in the opinion that, in justice to the present generation of tax-payers in Hongkong, a moderate loan should be raised on the exhaustion of the existing assets, to defray a portion of the cost of those Sanitary and other Public Works, which are recognised as of permanent importance for the security of the general health and well-being of our population.'

4. You have, therefore, Honourable Gentlemen, already sanctioned the principle of a loan; and there will now be laid before you Bills (already approved by Her Majesty's Government), for raising One million of Dollars, (that is, less than one year's income of this Colony,);-and to establish a Spirit Farm, the produce of which will be required to provide for the interest and Sinking Fund of the Loan.

5. From the Report of the Acting Colonial Secretary and Auditor General, it will be seen that the state of our Finances is briefly as follows:-In consequence of the exercise of rigorous economy in the general administration, while considerable progress has been made in the chief Public Works, there will still remain in the Treasury on the 31st of next December a balance of $190,000. Now, the Extraordinary Public Works, that is, those to be defrayed out of Balances and Loan, including among others, the Tytam Water-Works; the completion of the Victoria College, and of the pernament Lazaretto; the Defence Works, and the Sanitary Works; are estimated to cost $579,800; consequently, it will become necessary to raise by loan during the ensuing year not less than about $400,000.

6. The Estimates for 1886 show a surplus (in round numbers) of $122,500, if we include the increase expected from the proposed Spirit Farm, which is estimated at about $63,500, and which will be devoted to the payment of interest and Sinking Fund on the Loan. Consequently, there will remain only a nett surplus of $59,000, not more than is required to meet unforeseen expenses.

7. At the present time, the taxation of this Colony, both general and municipal, does not exceed £1.1.0 per head of the population. With the increase from the Spirit Farm, it will not exceed £1.3.6 per head. It will be recollected that the aggregate taxation, general and municipal, per head of the people of England, and of the Australasian Colonies, exceeds £3.0.0 per head.

8. Under the circumstances stated in a Report of the Colonial Treasurer which will be laid before you, it has been found necessary to increase the Police rate by 1 per cent. As the law of this Colony has hitherto stood, the power of assessing the Municipal rates is vested solely in the Governor in Executive Council. I think that this anomaly, for which there is probably no precedent in any other part of the British Empire, should be removed; and that, for the future, the municipal, like the general taxation should be imposed, after full consideration, by a vote of the Legislative Council. I have recommended to Her Majesty's Government that I should receive authority to carry out this reform.

9. And here I will take the opportunity of observing that I have always advocated the creation in all British and homogeneous communities of Municipalities freely elected by the Rate-payers, as in England. I took an active part in encouraging the extension of such Municipalities during the twenty years that I was Governor successively of three of the principal Colonies in Australasia. But, I recognise the fact that it is practically impossible to create here an elective Municipality; for probably not a single Englishman would be elected to it. From an Official report, it appears that there are:-

(1). English Rate-payers,

(2). Chinese,

(3). Others (chiefly Portuguese),

83 ...947

98.

As the constant policy and action of my Government abundantly prove, I feel much sympathy with the Chinese who have settled in this British Colony. I will never sanction any unnecessary interference with their national customs or national feelings; I have always given favourable attention to the petitions addressed to me by them; and I have appointed one of the most respected members of the Chinese Community to represent his countrymen in this Council. At the same time, it is obvious that neither the Colonial nor the Imperial Government can leave to an elective Municipality which would be composed entirely of Chinese, or in which the Chinese element would be largely predominant, the arrangements necessary for the health, water supply, good order, and general administration of one of the principal Naval and Military Stations, and Marts of Commerce in the British Empire. In addition to the European Civil residents and to the crews of the Merchant Shipping annually visiting this harbour, (the tonnage of which exceeds to 5 millions of tons, that is, it exceeds the tonnage entering all other British Ports except London and Liverpool), it will be remembered that we have to take into account some three thousand of Her Majesty's seamen and soldiers.