Mr Clauson Mr Ellis
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I have set out the chief points of the present
Hong Kong proposals for changing the basis of
assessmen
ent, and the Treasury and War Office views on them.
I agree generally with Mr Caine. The
fact is that the Home Government will not give any
serious consideration to any proposal for revising
the system of assessment unless they can be satisfied
that there will at least be no decrease in the total
sum payable by the Colony, whereas in the "reserved
claims" simultaneously put forward on this occasion
by Hong Kong the cloven hoof appeared and has
frightened the Treasury and the War Office away
pretty completely.
My own view is that if it is necessary and
equitable to require a Colony to pay nearly 1/5 of
its total revenue away as a contribution to the War
Department towards the cost of its De fence we shall
not avoid bitter resentment by the Colony from time
to time simply by changing the basis of assessment:
and I agree with the Treasury that the resentment
To be
will be more likely increased if the assessment is
A
focussed on so particular a basis as the annual
valuation in place of general revenues.
The War Office and the Treasury make it
clear that they will not consider any change or any
claims for exemption except such as involve virtually
no decrease in the amount payable.
The Hong Kong
Government, or in any case the Unofficial Members,
will see no satisfaction in that.
As I read the War Office memorandum the
War
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The Inter
any ment
we apply to
acnotiomes!
But there are my reupl from aprodhones
premit in it.
Quile, why not?
War Office does not seem prepared to favour a
inrespect of
concession to any of the particular classes of
revenue in which claims are made by the Governor
except that the net receipts instead of gross
receipts should be artessable in the case of
wireless telegraphy since that is a class of
revenue not existing in 1895.
It seems that they are further prepared
to consider the exemption of 6%, in place of
4%. of the capital expenditure incurred in the
establishment of "railways, telephones, or
other public undertakings, the cost of which
was de frayed out of the revenue of the Colony
and not by means of a loan".
They point out that such a concession
It is not difficult to undusland Would properly have to be applied to other
the w.o. apprehensions a accomml", this
ine
Colonies al so.
I suggest that before we pursue the
question of an inter-Departmental Conference,
we should draft a despatch to Hong Kong (who
have now asked for an early reply to "the
questions at issue") setting out the principles
from which His Majesty's Government cannot
depart in any review of the present system of
assessment: and refer to the percentage of
capital expenditure on railways etc. (as in
§ 3 of the Ordinance) and to the position of
such classes of revenue as Wireless Services,
which were non-existent in 1895; but add in that
respect a statement of the principle which I
have marked in paragraph 17 of the War Office
memorandum - I think it is a perfectly good
one
age 9
age 9
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Still less is is likely to put on To the ILK any increased bunden undu this head.
one ; and say that of the reserved claims put
forward in the Officer Administering the Government's
confidential despatch of 28th July in 52802/28
these are being considered as affecting both
Hong Kong and other Colonies where a defence
SS
contribution is acessed under a like system.
The draft should go to the War Office
and the Treasury for concurrence mentioning that the
Governor has urged us to give a reply, and saying
that the two matters mentioned as possible points
for concession to Colonial Governments paying
Military contribution can be considered thereafter.
(Signed) G.E.J. Gent.
30.9.
I am inclined to deprecate the mild '"defatiom' of Mr. Gent's batte min-
༡ -ute. I agree that the 'ratiable value' proposal sht be dropped, but I think that the Col. Goot has are admirable case on most
of t points in which they want to the items knocked out of the
gross revenue.
I am not alarmed by the "W.O. dictum that an alteration of the basis of assessment she be accompanied by an increase of percentage. No Goot, least of all the present one, is going
to ask a fol. to pay more than 20% in defence of it's revenues away
contributions.
I think that we she have a
ally conference stry to put acfol's
case as strongly
strongly as we can.
G.L.M-Canson
1/10/29
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