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(f). The posts of Boxing Instructor, Pianist and two Needlework Teachers have been abolished. There is no teacher of Portuguese. It is not considered desirable abolish the posts of Carpentry Instructors.

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Paragraphs 38-43.-Government is in touch with the authorities of the Diocesan Boys' School and negotiations are proceeding. It would be premature at this stage to make any disclosure. The Executive Council is being kept fully informed. Incidentally it may be remarked, with regard to the las: sentence of paragraph 39, that the loan of $175,000 to the Diocesan Boys' School was made with the full knowledge and con- currence of the Secretary of State, the Executive Council, and of the Finance Com- mittee which contains all the Unofficial Me nbers of the Legislative Council. The reference to the proposed new Central British School is based on inadequate information. Government is unaware of the source from which the Commissioners derived the erroneous idea that the cost was to be one million dollars, while the site was selected after consultation with the Board of Education, including the representative of the Kowloon Residents' Association, and with is concurrence. The cost is estimated at about half a million dollars for the buildin is necessary to enable the present school buildings to be evacuated, but the finances o' the Colony will not permit of the early commencement of the work, however desirable.

TREASURY.

Paragraph 1.-It is proposed to purchase two machines next year, and though it is too early to give any definite undertaking it is hoped to effect a saving of six clerks as soon as the machines are in full working order.

Paragraph 2.-The Government has at all times been willing to accord full value to the importance of the Treasurer's post. The extent to which that importance can be realized in practice must depend largely on the personality of the holder of the post.

Paragraph 3.-It is proposed on the completion of the Census to appoint the officer who is in charge of that work, a Cadet Officer of sixteen years seniority and with previous experience in the Treasury, as an Assistant Treasurer.

Paragraph 4.-This is the policy of Government.

Paragraph 5.-The recommendation contained in this paragraph is a matter which has as ardent advocates as it has opponents. Admittedly last year with the drop in the value of the dollar Government would have gained had it fixed exchange. On the other hand when the dollar tends to rise the effect might easily be disadvantageous to the Colony. The Government as at present advised is not prepared to accept this recom- mendation of the Commission.

Paragraph 6.It is difficult to see what would be gained from adopting this sug- gestion. The liability for Widows' and Orphans' pensions is unlimited. Any figure purporting to show this liability would therefore be quite hypothetical,

Paragraph 7-Government shares the opinion of the Commissioners that the assess- ment of the Colony needs a thorough overhaul. The Assessor's branch of the Treasury is being specially strengthened for the purpose. The transfer to the Assessor's Office of all valuation work for Government is contemplated, as soon as the major resumption. work in New Kowloon is completed. This will not be until the end of next year at the earliest. It is not improbable that the staff will have to be further augmented later on. Government also agrees that the Assistant Assessor should have a knowledge of Chinese But even more important is a knowledge of valuation and assessment work. tunately no officer has hitherto been found with both qualifications.

Unfor-

COLONIAL SECRETARY'S OFFICE.

HONG KONG, 1st October, 1931

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