16
impose any extra taxation to meet the interest on
this loan. There was no substantial increase in
taxation until last year, and I do not think that
we can pretend that that was imposed as a result
of the 1927 loan. I am afraid, therefore, that
our case on the merits of the matter is weak, but
we are practically in the very strong position of having passed the Ordinance, and the War Office have got to prove that it is now desirable to
They have
amend it, is accepted i faits accomplis
in the past/in the case of the Mauritius Mare- aux -
Vacoas Water Works in 1897 M'ria's Sagan export curly in 1923 ( Eu W.O. mamo.)
(2). Rate of interest on capital expenditure
net from revenue. I have ascertained the average
rates of issue of Colonial loans in this country
from the Crown Agents, and these are given in the
accompanying draft to the War Office. I think
these figures fully justify us in asking for a 6
per cent allowance on the Hong Kong Wireless
Telegraph expenditure, a good deal of which was
incurred before 1921; but perhaps they do not
quite justify the adoption of a rate of 6 per cent
for general application in future, bearing in
mind the reduction in sinking fund contribution
consequent on the increase in the rate of interest.
We may therefore have to compromise on 52 per cent,
although an excessive allowance now would only be
a just compensation for the inadequate rate which
has been allowed in the past.
(3).
Revenue from land sales. This revenue
has always been excluded from the calculation of
military contribution, and Ir. Roseway stated that
he understood that it was the intention that the
interest on investments made out of proceeds of
land