8
X52941/28
* But Of is any case if news probable that there worth be us Sout Wiritus before long. 1.M.M:
interest rates now obtaining"
•
The War
Office agree to 5%; but only in respect
of capital expenditure incurred between
1915 and 1930 (for the usual 50 years
period). The only Public Loan raised in
that period is the P.W. Loan at 6%; but
part of the loan was issued at a premium of 2xx. There is a sinking fund designed
to amortise the debt in 1938;
but it may
be repaid in 1932. It appears from page
7 of Mr. Taylor's memorandum in 1 on
82818/31 that Hong Kong could now borrow
at 4 to 40%. ? In the circumstances the
War Office compromise (non-retrospective)
offer of 5% (in respect of capital
expenditure incurred between 1915 and
1930) should be accepted. The same rate
will apply to capital expenditure met
from revenue during that period in respect
of other undertakings treated on a net
receipts basis.
(b) Revenue Gross and Net.
Hong Kong claims that the net receipts
principle should be applied.
concur.
War Office
Use of Motor Vans. Hong Kong claims
that this is a commercial undertaking
and should be treated on net receipts
basis. War Office concur provided it can
be clearly established that this is
"outside the nonnal functions of the Hong
Kong Government"
Gap