Sessional_Paper_1899 — Page 198

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Revenue.

Appendix 6 contains a statement of the revenue of the San On District drawn up by the District Magistrate, from which it appears that the total annual revenue amounts to $52,220, or, say, £5,000. But from information derived from another source it is estimated that the annual revenue of that portion of the San On District contained within the leased area amounts to $160,000, or, say, £16,000.

Owing to the inspection of the new territory having been somewhat hurried, it was not possible to institute a minute inquiry into all the items of revenue. Some of these may not be regarded as satisfactory sources of revenue, and may be ultimately abandoned, whilst it may be deemed advisable to modify the mode of collecting others. For instance, the revenue derived from opiumn includes a duty on raw opium, which produces annually $23,611.11. In Hongkong the duty on opium is charged not on the raw but on the prepared article, which in the new territory is said to yield only $4,166.67 a year, an amount obviously much lower than that which could be collected. And the same remark is applicable to other items of revenue, which, when British rule is established, will be greatly increased. However, until further experience has shown in what manner revenue can be best raised without exciting the suspicion or irritating the feelings and pre- judices of the inhabitants, it would be well to interfere as little as possible with the present system and sources of taxation. If this be done, it is anticipated that there will be no difficulty in raising at the start an annual revenue sufficient to meet the cost of administering the new territory. The expenditure is estimated at $125,000. To cover this outlay taxation to the amount of 14 dollars or 2s. 6d. per head of the population will be sufficient.

Expenditure.

The cost of administering the new territory is estimated at $125,000. The chief items of the estimated expenditure are :—

Police....

Surveyors

Miscellaneous...

Total

$33,223

$14,400

$24,657

$72,280

•

When the work of survey has been completed such a large staff of surveyors will be unnecessary, but it is important, as has been pointed out, that the land under cultivation should be surveyed as quickly as possible. Miscellaneous ex- penditure has been estimated at a high figure, as unforeseen expenses are sure to be large when the territory is first taken over.

Loan,

The finances of the new territory should be kept distinct from those of Hong- kong, and, so far as can be judged, there seems to be no reason why it should not be self-supporting as soon as it has been taken over. But the collection of the annual revenue will necessarily take some time, especially at the commencement of British rule, and before that rule has been established, it will be necessary to have in hand funds sufficient to meet current expenses and to cover initial outlays. Buildings for public offices, for officers' quarters, for a gaol, for a school, will have to have to be constructed; the present roads will have to be improved and new ones made.

To meet this expenditure I recommend that recourse be had to a loan. The Government of the new territory might be empowered to borrow up to a maximum amount, and to arrange with a local bank for an overdraft, so that it could obtain such advances, not exceeding the amount it has been authorised to borrow, as it may from time to time require.

BOUNDARY LINE.

*

The boundary line indicated on the map attached to the Convention (Map I.) is the shortest line from sea to sea that could be found, measuring on the map only eleven (11) miles. Following the river from Deep Bay to Sham Chun and the road from the latter place to Starling Inlet, the actual distance is about thirteen (13) miles.

• Not printed.

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