Sessional_Paper_1891 — Page 189

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Works; making together $61,000; so that from these sources alone there would be sufficient to pay interest and 1 per cent. sinking fund on a Loan of $1,220,000 at 4 per cent.

All things considered therefore thongh I am by no means sure that some of the increases of salaries do not require re-consideration, I am completely satisfied that with a very moderate loan for public works and in the absence of circum- stances impossible to foresee, there is every reason to believe that the Ordinary Revenue from its present sources will be sufficient to cover the salaries, as increased by the vote last October, as well as the increased Military Contribution.

As regards the future, though there may be expected some loss in the next sale of the Opium Farm as compared with the large sum obtained for it under exceptional circumstances in 1889 (being some $246,000 per annum higher than previously), there is good reason for anticipating advances in other directions: (1) If at this time of exceptional depression (from which the facts above referred to seem to indicate the beginning of improvement), the assessed taxes should prove to have fallen off as estimated only 24 per cent., I venture to think in view of the increasing general trade that there is good reason for believing that this loss will be very quickly com- pensated by return to a normal condition, even if there should not be, as I con. fidently anticipate, a further upward progress in prosperity. (2) The revenue from profit in subsidiary coinage, so far from shewing any signs of diminution tends steadily to increase. Owing to the exceptional demand for these coins, not- withstanding the institution of the Canton Mint I have been compelled to raise from $1,000,000 to $1,500,000 the annual requisition upon the Crown Agents; and if the Mint should be able to supply us with the amount, I anticipate that the revenue from this source for this year will be at least $90,000. (3) Rent from Land must continue to increase in amount as further Land is sold, and will even make a considerable advance this year. Indeed the permanent revenue from this source will mount very rapidly, if, as I most sincerely hope the policy should be maintained of permitting the commuta- tion for increased rent of a considerable portion of the premiums. There will always be a strong temptation to abandon such a policy at a time like the present, when the current account is running low; but I am confident that it is the only sound policy, and that, if steadily maintained, it will in the course of not many years render it possible to considerably diminish the weight of taxation. And while refer- ring to this matter of taxation, I think it well on the eve of my departure to correct an impression which I may have given in a recent speech, as to the possibility that any substantial increase of taxation would, by driving trade away, cause this Colony to meet the same fate as the West Indian Island of St. Thomas.

From further enquiry into this question (which I may mention only suggested itself to me on the spur of the moment), I have been led to believe that any appre- hension on this score may be entirely dismissed. Without troubling you with all the reasons which have induced this more favourable view | may mention the principal one as being that the large size of the steamers which are ordinarily required to bring goods from Europe and America, would render it impossible for them to conduct coasting work on any large scale at a profit, and that consequently a distributing centre, such as Hongkong and for which no other port would afford anything like equal facilities, is an absolute necessity. And I am further told and believe that the present tonnage dues night be very considerably increased, and might be made something much more nearly approaching the average of other ports, and yet all, or nearly all, the vessels which now come here would still have to come here, inasmuch as their not coming here would cause them a loss considerably greater than the increased tax. Whether this, view is completely correct, I cannot say; but I believe there is at all events sufficient truth in it to suggest the consideration whether additional revenue might not be raised, or whether with the revenue remaining at the same amount the incidence of tax-