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way of excess from this amended estimate it can only be by the inability to expend within the year some of the money voted for public works, which will only have to be expended next year, and will make no real difference in the

statement.

12. From the nominal excess, however, of assets over liabilities it must always be borne in mind that a considerable abatement must be made to arrive at the actual available surplus at any moment; because the revenue accrues due half yearly while the debts of the colony are paid monthly, so that there is always far more due to the colony than it owes. Thus I find that while on the 1st of January last the excess of assets over liabilities was estimated at 98,5491., the actual cash on hand including the current balances in hands of Treasurer and Agents-General amounted only to 83,8417. In the same way a nominal excess of assets over liabilities of 73,000l. at the end of this year would represent but a cash balance of about 58,000l., the whole of which sum even would not be available for disposal, as small balances must be retained in the Treasury in Hong Kong and in the Crown Colonies Office in London, besides a stock of the subsidiary coinage for issue to the public as required.

13. Against this real available balance of between 50,000l. and 60,0001. which is likely to be found at the end of the year, the following engagements will be outstanding :---

(1.) The new convict settlement on Stone Cutters' Island, and the new Central Police Station in Victoria, the completion and fittings of which will cost at the least 15,0001. over and above all sums now voted.

(2.) The Kowloon compensations, assessed by Her Majesty's Com- missioners under Treaty at 133,000 dollars (27,7087.), exclusive of the valuation of four large villages not yet assessed. The whole of this may not have to be paid by the colony, as lands may be regranted instead of bought, and the naval and military services will have to pay a portion. But a considerable payment will have to be made by the colony, probably not less than 10,000l. or 15,000l. in addition to the 2,000l. entered in the votes of this year.

(3.) And lastly, the establishment of a mint, the plant and machinery for which, judging by the cost of the Sydney Mint, would probably come to 18,000l. exclusive of buildings, which would perhaps amount at the least to 10,000l. more

14. Items 1 and 2 are unavoidable and must be met, but the establishment of a mint might no doubt be postponed if necessary to a more urgent claim, but it would be, I consider, a very "injudicious" policy to do so, looking even at the interests of the Imperial Government alone, for the annual saving which the mint will effect to the Imperial Exchequer on the item of "loss by exchange will probably far exceed the largest contribution which under any circumstances could be drawn from the colony in aid of military expenditure.

"

15. I have now carefully gone over the actual present financial position of the colony and reviewed its prospects as far as they can be conjectured from existing facts, and have shown that the revenue* is barely equal to the ordinary expenditure, and the maintenance in repair of the existing public works. I have shown also that the surplus in hand is already fully appropriated either for undertakings absolutely indispensable or urgently desired; and I submit, therefore, that the colony is not in a position consistently with a sound financial

£

£

* Revenue

章網

105,000

Ordinary expenditure

85,000

Repairs to public works

20,000

105,000

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