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248
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3. I may take this opportunity to state, with reference to paragraph 6 of the Ciroular despatch of 1894 quoted above, that the Colony desires to retain the surrendered land only in the sense that it wishes to develop it for the general purposes of the community. The price greed upon would be final and would not be affected by a future sale by this Government of a particular area at a price higher or less than that paid for its surrender.
6.
The Defence Contribution Ordnance, 1901, provides that the percentage paid annually by the Colony is a fixed contribution in full return for the annull cost of the garrison, including all capital expenditure for Military Lands and buildings; and it has been the practice to use the Military Lands Account merely as a record of land transactions between the Colonial Government and the .ilitary Authorities, The principle that the Colonial Government does not make cash payments in respect of land and buildings by the War Department was affimed in the Colonial Secretary's letter to the chief Engineer of the 1st April 1909, a copy of which is attached for convenience of reference, and it was accepted by the Military Authorities. The transactions now proposed are however of a different nature from those which are ordinarily entered in the Military Lands Account, and I am prepared to agree that they should be carried out entirely on a cash basis,
7. The Military Lands Account shows a decit balance on some. thing over $600,000 against this Government, and I suggest that it should be for the time being closed and that this obit should stand over until the cash transactions are entirely completed.
8. Under date the 28th September 1921, the War Office informed the Colonial Office that the sum of 2114,317.18.9d. was owing to this Government on account of percentage overpaid under the Defence Contribution Ordnance. I propose that the new cash account shall be opened by the entry of this sun to the credit of this Government, and that, as soon as the Military Authorities are prepared to undertake that certain land will be handed over, the agreed price of that land shall be credited to them. The balance in favour of the Military Authorities will obviously be a large one, and the Colony will be responsible to the extent of the whole of that balance for the reprovisioning of the garrison. For example, taking the value of the land to be handed over at $11,000,000 and deducting $900,000 as the rough equivalent of the refund in respect of defence contribution the Colony would be under obligation to the extent of 10,100,000 to provide land, the value to be settled by agreement or arbitration, and to construct any new buildings which may be required. When the transactions have been entirely completed and the balance to the credit of the Military Authorities has been exhausted, the cash account will be closed, and the Eilitary Lands Account will be re-opened on its present basis.
9. If the Military authorities are prepared to proceed on the lines which I have indicated, I would ask that an immediate corrience:lent may be nade by the surrender of the Fine wood Battery area. The rate of transfer of this land was 11,059 cents per square foot and the Director of Public Works reports that the present day all over value is less than half this sun. I suggest that this Government should accept a debit in the new cash account of the exact sun which was credited to ip the Military Lands Account; the result being that the occupation of the area by the Military Authorities will have been free of charge to then except in respect of money spent on constructional work. The Director of Public Works will of course be glad to discuss with Colonel Davy his figures regarding the valuation of the land.
10.