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that it should borrow the amount required to complete the Praya Reclamation and advance it to the Marine Lot Owners on their undertaking to repay their advances within twelve months of the completion of their respective sections, stated inter alia that the fall in the rents of houses was purely temporary and would soon rectify itself. But even, as it is, rents in Hongkong are in many cases extremely high. The Colonial Secretary informs me that he pays for a six-roomed house (dining-room, sitting-room and four bed-rooms) more than four times what he paid for a very commodious house in Colombo; and the rent demanded for this year for my residence at the Peak, a very insufficient and unsuitable house, is $2,400.

The statement that "the annual valuations have hardly yet been altered" is perfectly true for the very sufficient reason that the value of house property has not generally depreciated as the Memorialists wish it to be believed. A valuation is made every year, and every house-holder has an appeal against the valuation. The mis-statement that "it was solely on the ground of the great increase in house rents in the Colony that Lord KNUTSFORD sanctioned the increased salaries," is of a character on which I prefer not to comment.

9. Paragraph 7 quotes a passage from my address to the Council on opening the Session, and adds that I recognised the need for retrenchment in every direc- tion. I have only to observe that I did not recognise the need for retrenchment in every direction.

10. Paragraphs 8 and 9 profess to detail my views as to the directions in which economies may properly be effected and repeat the demand for the immediate reduction of certain salaries. The latter point I have already dealt with, and I need not go over the same ground again. As to the former, the paragraphs are misleading in so far as they seem to imply that I am of opinion that the civil service proper is generally overpaid. I have never expressed that opinion, and I' do not hold it. On the contrary I am unable to see any sufficient reason for pay- ing the Members of the Executive Council, for example, in Hongkong, where the cost of living is much higher than at Singapore or Colombo, lower rates of salary than those drawn by the corresponding Members of Council in the Straits Settle- ments and Ceylon. The only apparent exception is the Attorney-General, and it must be remembered that he is debarred from private practice in Hongkong. I may further state that it strikes me as anomalous, to say the least of it, that while steps are being taken in those Colonies to compensate the civil servants for their loss by the further depreciation of silver, the opportunity should be seized in Hong- kong to move the reduction of official salaries, and the fall in silver urged as a reason for such reduction!

11. Paragraph 10 states that I have admitted in my address that the financial position is not entirely satisfactory and that the necessity for economy and retrench- ment is imperative. I am of opinion that in the absence of a loan for the public works extraordinary the financial position is not satisfactory, that a loan, for that purpose is absolutely and immediately necessary, and that when the loan has been raised the position will be satisfactory. I may add that the revenue prospects have materially improved in several directions since I prepared my address to the Council. I have already stated to Your Lordship what economies I consider may be judiciously effected in the ordinary expenditure.

12. Paragraph 11 is not a little curious and difficult to understand. It states that the Unofficial Members are the guardians of the public purse, and that it was in vindication of their rights and powers as such, as well as for the protection of the interests of the Colony that they were compelled, on account of the treatment they had received "on many financial questions," to move the immediate reduc- tion of certain salaries. This is not the first occasion on which it has been con- tended that the Unofficial Members not only have in common with their Official colleagues, as Members of the Legislative Council, a responsibility in regard to the expenditure of public funds, but that they are in some special and peculiar sense the guardians of the public purse in contra-distinction to, or even, as it would seem, to the exclusion of the Official Members. The resolution moved by Mr. WHITE- HEAD on the 7th December, 1891, stated that the Unofficial Members are

"the lawfully constituted guardians of the public purse," and it based on this assump- tion a request for the appointment of a Retrenchment Committee "composed of Members exclusive of Government officials." The assumption that the Unofficial Members do not merely share a responsibility which devolves on the whole Council, but have an especial responsibility which is not equally borne by the Official Mem- bers, involves a strange misconception which I am quite unable to account for.