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tendered or accepted; that their votes were illegal and void; that the Amendments proposed by the Unofficial Members should have been declared to have been carried, and should have been embodied in the Bill as reported from the Finance Committee. The Unofficial Members believe that on principle and by every rule of Parliamentary practice and procedure, the Official Members of Council were disqualified from voting on the occasion in question, and submit that the Bill should have been allowed to pass as amended by the Unofficial Members in Finance Committee of the Council.

4. The Unofficial Members of Council beg further to submit, for your Lordship's consideration, a short history of the increased salaries question, so that in dealing with it you may have before you not only the official view but also the popular aspects of it, and that you may be able to understand the connection which un- doubtedly exists between this special question and the general financial condition of the Colony, and the repeated efforts unavailingly made for some time past by the Unofficial Members to get from the Colonial Government an independent examination into the steady and constant increase in the aggregate cost of the administration of the Government, which we regard as exceptionally heavy if not excessive.

(a) In 1888 and 1889 this Colony was undoubtedly, so far as appearances went, in a very prosperous condition, and there was no reason to anticipate any serious alteration in its financial position in the immediate future. We need not do more than refer your Lordship, in proof of this, to Sir WM. DES VEUX's exhaustive despatch of 31st October, 1889, to Lord KNUTSFORD, then Her Majesty's Principal Secretary of State for the Colonies.

(b) In that despatch our late Governor was able to refer to the great wealth of the Colony, to the increased market value of the shares in all registered Companies in Hongkong, to the enormous rise in the value of land, and to the certainty of a further increase therein, leading to a great enhancement of revenue from land sales, crown rents, and an increased volume of taxation, and to a vast commerce in a healthy state of progress, etc., etc.

(c) A proposal was made at that time and most cordially supported, not only by the then Unofficial Members of Council but by the community generally, to improve the pay of the Civil Servants, compensating them in some way for the then rise in the cost of living in the Colony generally, but more especially in the item of house

The value of land in the Colony at that time was indeed very great, and rents were higher than they had ever been before. Early in 1889 a Commission, composed entirely of Unofficial Members of Council (the Chairman only excepted), recommended a general advance in salaries all round. The then Secretary of State for the Colonies approved of the recommendations with various alterations and modifications and after prolonged consideration and discussion in despatches and in Council a revised scale was approved and introduced into the Estimates for 1891. But, during the two years that had elapsed since the first proposals were made, great changes had taken place in the financial condition of the Colony. In his speech in the Council, on 19th March, 1891, Sir G. W. DES Vaux forcibly pointed out that the Colony was suffering largely from three causes which had hit Hong- kong extremely hard--one was the restrictive legislation against Chinese in the Australasian Colonies and in America; another was the increased cultivation of the Poppy in China, which had diminished our Opium Imports; and the third was the decline in the export of Chinese Tea owing to the competition of India and Ceylon. Land had fallen greatly in value; we were largely over-built in the City of Victoria, at the Peak, Magazine Gap, and at Kowloon; house rents were going down considerably in almost all instances; immense sums of money had been lost through unprofitable trade in tobacco planting in British North Borneo, mining ventures in the Malay Peninsula and elsewhere, and a number of the new local enterprises had not yet yielded any return on capital invested, while many others were in course of liquidation; the unprecedentedly violent fluctuations in the gold value of silver had paralyzed and rendered Export and Import trade not only un- profitable but disastrously bad, resulting in heavy losses, and the Colony's revenue showed every symptom of a serious falling off, more particularly the revenue deriv- able from the Government's Opium Farm, which was at that period about one fourth of the Colony's total income. This state of affairs was aggravated by the Military Contribution to the Imperial Government from the Colony being increased from £20,000 to £40,000 per annum, or to nearly one sixth of our total annual revenue, on the ground that an increased Garrison was essential.