Sessional_Paper_1892 — Page 5

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moment to state what the actual revenue and expenditure of 1891 have been, but I am informed that the amount collected was $2,019,136 instead of $2,052,098 as estimated. The difference is owing to the fact that land sales realised only $55,325 out of an estimate of $100,000. The total expenditure of 1891 will be as nearly as possible $2,357,488 instead of $2,416,626 the estimated amount. The expenditure therefore for 1891 will have been $338,352 in excess of the revenue. You will of course notice that those figures do not agree with the revised estimates for 1891, which are embodied in the Colonial Estimates issued in October, but they are compiled from the latest returns in the Colonial Treasury. The balance of assets over liabilities on the 31st December was, it is said, about $150,000. This is not a very large sum and points to the necessity of economy in the future. It will be my duty to prevent any ordinary expenditure therefore which is not absolutely necessary. There are some satisfactory features in the returns for 1891. For example, stamps were estimated to yield $179,356; there have been collected $193,959, showing an excess over the estimate of $14,603. The revenue from this source in 1890 was $203,160, an excessive yield which can easily be explained. In the Registrar General's department there has been an increase of $7,138; in the Supreme Court a decrease of $4,000. In the returns of that Court there is one most gratifying feature, namely, a remarkable decrease in the number of criminal cases tried. They amounted in 1891 to only 32, whereas the average from 1882 to 1886 was 87, and the average from 1887 to 1890 73

per annum. There is only one other item to which I would call special attention, and that is the tonnage of shipping in and out during 1891. My predecessor in one of his able and elaborate speeches stated that the total tonnage in and out in 1890 was 13 million tons, and he regarded it as phenomenal; but it may surprise you to learn that notwithstanding a slight shrinkage in the foreign junk trade, which is principally owing to the river steamers having absorbed the carriage of kerosine and matches, the shipping in and out last year represented no less than 14,005,698 tons.

Some very interesting and lucid returns from the Acting Harbour Master in reference to this stupendous traffic will shortly be published. During the last six weeks I have visited nearly every public institution and every public department. No stranger coming to Hongkong can fail to be struck with the magnificent works which have been and are being carried out by the Public Works department; the water and drainage works, Bowen Road, the great Reclamation Scheme, and the Central Market are and will be lasting monu- ments of the energy and ability of that department as well as of the liberality of the Legislative Council. But there are other works which have been recently executed or are nearing completion which might, in view of diminishing assets, have fairly been postponed until more prosperous times. With regard to the future, it is evident that if the public works extraordinary described in pages 43 and 44 of the Estimates are to be carried out, and I assume for the moment that their necessity with perhaps very few exceptions is admitted, the revenue will not be able to bear the expenditure without a considerable increase of taxation. To my mind it is both unfair and illogical to tax the present generation for public improvements which will be of more benefit to posterity than they can be to existing taxpayers, and the only way of proceeding with these undertakings is by a loan, the Council having previously approved of the detailed estimates and designs as the case may be in respect of each of those works. I am sure that you will give me a patient hearing if I deal with this question at some length on the assumption that a loan must be contracted, and that with little delay. Before doing so I would remark with regard to the proposed expenditure in 1892 that it is possible that a saving can be effected under item 9, improvement of the Recreation Ground, The lowering of Queen's Road West has been abandoned. The re-construction of Governor's residence at the Peak cannot be undertaken. The house is in a most dilapidated condition, and according to the report of the Surveyor-General practically unfit for occupation. It would be unsafe to attempt to repair it. Doubtless the Council will not object to a revote of a portion of the $10,000 voted for the repair of Mountain Lodge for the hire of a residence for the Governor and his family if necessary. As to the contemplated Gaol extension I have asked the Secretary of State to allow me to postpone it for a short time in the hope that more economical arrangements can be made than those which have been proposed. This matter is engaging my most anxious consideration, but no doubt a large expenditure for additional accommodation will be required. The revenue for 1892, owing to the diminution by $114,000 of the opium farm receipts, will be $2,030,178 instead of $2,144,178, and the ordinary expenditure $1,773,918, leaving an estimated surplus of $256,260. The balance of assets over liabilities is said to be $150,000, making, with that surplus, $406,260. The proposed expenditure for 1892 on public works extraordinary is $680,000, which may perhaps be reduced to $640,000. The total sum required for all the public works extraordinary in contemplation is say $2,680,000. Of this sum upwards of $900,000 was expended to the 31st December last, leaving a balance of $1,780,000 to be provided in 1892 and subsequent years. Assuming that $640,000 is spent during 1892 the surplus and assets amounting to $406,260 will be swallowed up and a further sum of over $233,000 will have to be found before the 31st of December, 1892. From the correspondence which took place previous to the loan of 1881 the Secretary of State for the Colonies is clearly averse to raising a fresh loan

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