10
should be exempt from military contribu-
tion. The Governor has asked for a
decision on this claim without waiting
for consideration of the others (see 8
on this file). War Office desire further
information as to the nature of these
overpayments.
Water works undertakings built out of revenue.
Hong Kong claims the deduction of 4% in
respect of interest and sinking fund:
but apparently does not claim that the
revenue could be treated on a net
receipts basis, (which it could not very
well do ef. my minute of 24.12.29 on 62832/29). War Office could not agree
to net receipts basis and they therefore
refuse to agree to the deduction in
respect of interest and sinking fund.
I think we should try to argue that this
is a non- Sequitur.
So much for the claims of Hong Kong.
The War Office on their part claim that deduc-
tions from assessable revenue of the cost of
service of the P.W. Loan 1927 should not have
been made and should now cease. This has been
dealt with in 5 and 7 on the present file.
? We should admit the War Office claim
? Arrange conference with War Office, discussing the proposals with them on these
lines and drafting an agreed despatch for
submission to the Treasury. Meanwhile, if the
general papers become available we can go into
the