No. 35

I have to acknowledge your Despatch No. 9 of the 28th January last,
enclosing the estimates of your Government for the year 1870 accompanied
by a report from the Auditor General, and various returns called for by
my instruction the 18th August last.

2. It has given me much satisfaction to receive these Estimates in
so greatly improved a form, but I have to point out to you some defects
which should be remedied on future occasions.

3. In the first place the Estimates are not accompanied by the
Appropriation Ordinance. You have no doubt forwarded the anticipation
of the passing of the Ordinance in order to place me in earlier
possession of your financial arrangements for the year, but as a general
rule, it will be more convenient to adopt the course already prescribed
in the 3rd paragraph of my instructions referred to vizt. not to separate
the appropriation Ordinance and the Estimates.

4. Secondly, the returns submitted of assets and liabilities
include the permanent Debts and sinking Fund. This is erroneous. The
floating or Temporary debt should no doubt appear among the liabilities,
but permanent debt and in the like manner Sinking Fund should be given
in a separate statement as pointed out towards the end of paragraph 2 of
the printed Despatch to the Straits Settlements enclosed in my Despatch
of the 18th August.

5. Thirdly, the detail in the estimates does not extend to the
expenditure for the civil establishments sanctioned by permanent Law.
Only the gross amount of this Expenditure is given. The Estimates
should be set out in detail in future, the entire proposed expenditure
for the year, at the same time that they distinguish as is of course
proper, what has been secured permanently, on the one hand, and what has
to be voted and included in the annual Appropriation Ordinance on the
other. The best mode for giving this information appears to be to
print, preceding the detail of Establishments (page 5 of the present
Estimates) a Tabular statement of the sums permanently secured.

6. As regards measures for the consolidation of the debt I refer
you as (I have already done by Telegraph) To my Despatch No. 13 of the
23rd February sent on the 26 Idem. Otherwise I have for the present no
objections to make to the financial arrangements submitted. I however
necessar[il]y postpone sanctioning the Estimates till it is made known
by receipt of the Appropriation Ordinance, that they have been adopted
by the Legislative Council.