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4. The main objection to the charge appears to be, that the Colony considers that it has been deceived in the matter, inasmuch as my despatch of 20th January, 1890, led the Colony to believe that the contribution of £40,000 was considered to be the proportion which the Colony should pay towards a garrison costing £280,000.

5. I have fully dealt with this misunderstanding in my despatch No. 47 of 7th March, which has been received in the Colony and laid before the Legislative Council, since the despatch under acknowledgement with its accompanying protest was written, and I trust that that despatch will have removed from the minds of the Un-official Members of the Council all idea that there has been any "breach of faith" or "shifting of ground" on the part of Her Majesty's Government in this

matter.

6. I can only add that Her Majesty's Government adhere to the view expressed my despatch of 7th March, that no sufficient grounds exist for delaying the payment of the full contribution.

in

7. With regard to the troops which are to be drawn from India for service in Hongkong and other Eastern colonies, much greater delays have occurred in India than was anticipated in determining the class of natives to be recruited, the condi- tions of service, &c., &c. The subject is now, however, in an advanced stage; the Officer Commanding the regiment for Hongkong has been selected, and though I am not yet able to say when the Indian troops will be actually present in Hongkong, I am assured that every effort is being made to expedite their arrival there.

I have the honour to be,

Sir.

Your most obedient,

The Officer Administering the Government of

HONGKONG.

humble Servant.

KNUTSFORD.

MY LORD,

The China Association to the Colonial Office.

CHINA ASSOCIATION,

122 LeadenhalL STREET, 13th May, 1891.

A telegram has been received from Hong Kong, inviting the concurrence of this Association in a protest which has been formulated by the un-official members of the Legislative Council against the exaction of an increased subsidy notwithstanding that the addition to the garrison on which the demand was originally grounded has not yet been made.

When it was resolved some years ago, in pursuance of the recommendations of Lord CARNARVON's Committee, to strengthen the defences of certain important coaling stations, the principle was laid down by Lord HARTINGTON in the House of Commons (in July 1884) and endorsed by Lord DERBY (in a despatch bearing the same date) that the Straits Settlements and Hong Kong should bear the cost of the necessary works, Her Majesty's Government contributing the armament; and I need not recall to your Lordship's memory the cordial appreciation which was soon after expressed, of the promptitude with which those works were undertaken. Hong Kong has expended £120,000 upon the new forts; and though some surprise was felt at the supplementary demand that its former contribution of £20,000 per annum should be doubled, as a subsidy towards the cost of the increased garrison, that vote also was loyally passed in reliance on the promise by which it was accompanied, that an additional battalion would be at once added.