57/20/4567 (1.0.C.F.)
WAR OFFICE PO CROWW AGENTS
9333
APR 12J
War Office, S.V.
25th March 1912
Gentlemen,
I am directed to acknowledge the receipt of your letter dated 7th ultimo, No.6/Hong Kong/1233,
respecting the price charged for some ammunition supplied
to Hong Kong ard to inform you that it is the
practice to charge Colonial Governments the actual cost,
as closely as it can be ascertained, of the stores
manufactured for them in the Ordnance Factories. To
arrive at euch cost all expense incurred in carrying
out the order, including such unremunerative
expenditure as is referred to in your letter, is
charged.
The result is that although a Colony may be
saddled in rare instances, es in this case, with an
exceptionally heavy charge, it pays, on the whole, no
more than would be the case if a percentage to cover
the risks of manufactur ing lossen were added on all
orders.
For contracts placed with the Trale, the
prices quoted by the private manufacturer are such
as to cover manufacturing risks as well as a margin for
profit. In the Ordnance Factories riske are only
charged when they actually occur.
-1-
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