41
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to himself (the S.ef S. for the Colenies), in order that the question may first be submitted to this Beard and the Army
Council. This cendition was definitely reparted to the Colony in C.0. despatch of 19th August, 1911, to the Governor of Hong Kong. The second portion of the Section can obviously not be applied unless it has been previously agreed that an undertaking should be treated under the first portion of the Section as a "productive undertaking".
The fact is that the Section of the Hong Kong Ordinance quoted by the Deputy Treasurer is only of a permissive nature made wide in its terms to obviate the necessity of amending ordinances. It is not general in its application to all productive undertakings in a Colony and neither the whole of the Section nor a portion of it, can be extended to any particular undertaking, not previously approved for treatment on net receipts, without the prior authority of His Majesty's Goverımant. There has thus bee no error in law in the past treatment of waterworks receipts in Hong Kong.
War Office.
August, 1931,