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264 statement of income and expenditure for the year 1848, shewing £28,509 local revenue (apart from the Parliamentary Grant) and £62,308 expenditure, a local paper summed up the position of affairs by saying, 'the Colony is now in a state of insolvency, the public works are suspended and the officials only paid a portion of their salaries.' The difficulty was enhanced by the fact that a public loan was out of the question, that the Parliamentary Grant for 1849 had been reduced to £25,000, and that but little could be saved by retrenchment of the civil establishment without committing an act of injustice or impairing efficiency. Sir George was, indeed, even then of the opinion which he expressed later on, that, 'were this Colony taxed in the same way as are the Settlements in the Straits under the government of the East India Company, it would in a year or two be made to pay its own expenses.' But he also knew that any attempt at additional taxation would be violently resisted by the community as injurious to trade. All eyes were therefore directed to the Imperial Exchequer. Sir George himself appears to have considered the temporary continuance of a small annual grant from the Exchequer a reasonable measure. 'Seeing,' he wrote (April 2, 1850), 'that the trade of the Colony benefits the British Exchequer and the Indian Government conjointly to the extent of upwards of seven millions Sterling, an expenditure on the part of the mother country of from £12,000 to £15,000 annually, to uphold the establishment of a Colony which is the seat of the Superintendent of British trade with China, ought not to be considered excessive.' This was, however, a question to be decided by Parliament, and public opinion in England declared that the Colony was now out of its swaddling clothes and ought to learn to stand on its own legs.

Sir G. Bonham did his best to bring about this desirable result by revising taxation as far as practicable and enforcing retrenchment in every possible direction. For the ad valorem duty on goods sold by auction, he substituted increased auctioneers' licence fees. He introduced a tax on the exportation