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9. The Colonial Office have referred to the Colonial Defence Committee a separate despatch, dated the 6th July, 1900, from the Governor on the subject of the recommendations contained in paragraphs 38, 46, and 47 of the Commandant's Report, and of further recommendations by that officer for considerable increases to the establishment of the corps. The Governor approves, with one exception, of all the recommendations made by Sir John Carrington, and raises the question of the incidence of the additional expenditure. He submits that, in view of the large amount paid by the Colony directly and indirectly as military contribution, the expense of the Volunteers above the amount entailed by the present establishment of 350 all ranks might fairly be borne by the Imperial Government.

The despatch and the inclosed letter from the Commandant, dated the 26th May, 1900, are printed as Appendix II to this Memorandum.

10. The Colonial Defence Committee are informed that since the date of the Governor's despatch a new arrangement has been proposed to the Colonial Government, by which a definite percentage of the Colonial revenues would be payable by the Colony to cover all contributions towards the Imperial garrison, works, and arma- ment.

The effect of such an arrangement would be to proportion the Colonial appropriation in aid of Army Votes more exactly to the financial condition of the Colony, and so to enable the Colonial Government to estimate more readily the expenditure which can properly be incurred from year to year in the maintenance of the Colonial troops.

As regards the general question of principle, the Colonial Defence Committee are not prepared to recommend any departure from the universally-accepted rule that the maintenance of Colonial troops, even at Imperial coaling stations, should be defrayed. entirely by the Colony. The Committee fully recognize the valuable services which are rendered by the Hong Kong Volunteer Corps in the defence of the Imperial coaling station; but they do not regard these services as differing in kind, or even (in comparison with such Colonics as Ceylon) in degree, from those of other corps similarly circumstanced, and they would deprecate any new departure in financial arrangements based on a comparison of the value of the services of different corps to the defence of the Empire. The Committee would be sorry to see any change in the system of unmixed Colonial responsibility for the condition of Colonial Volunteer Corps, a system which has, on the whole, been attended by very beneficial results.

11. As regards the specific recommendations brought forward by the Commandant in his letter, the Colonial Defence Committee would have been glad to have had before them the views of the General Officer Commanding, especially as to the utility of mounted infantry. The Governor does not look upon this arm as suitable to the conditions existing at Hong Kong, but the Committee are inclined to think that in certain circumstances it might prove useful in the defence of the territory on the mainland. The augmentation of the engineer and infantry companies is mainly a question of money, and the increase in the rate of camp allowance and in small-arm ammunition, though encouraging very useful forms of training, are not points on which the Colonial Defence Committee can on this occasion usefully advise. The proposal of the Commandant to add two permanent instructors to the staff of the corps stands on a somewhat different footing, and the Committee desire to suggest, for the consideration of the Colonial Government, that the addition of a permanent instructor, qualified to impart instruction in both mountain-battery and machine-gun drill, would be a profitable object of expenditure. It is a matter of importance, in the interests of the immediate usefulness of the corps, and of the continued efficiency of its reserve, that the instruction should be placed on a sound basis of thoroughness and continuity.

M. NATHAN, Secretary,

Colonial Defence Committee.

September 6, 1900.

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