105
10. The Deputy Treasurer of the Colony in his memorandum of December 9th, 1930, suggests that the assessments made on the gross revenue of the waterwerks in past yoars were contrary to the terms of Section 3 of the Defence Contribution Ordinance No.1 of 1901, and that, by law, annual deductions of 4% of the capital expenditure met from revenue should be made for 50 years from the gross receipts. This suggestion which is apparently accepted by Colonial Office letter of 27th February, 1931, covering the Governor's despatch is unsupported by the historical circumstances associated with the Section and ignores the correspondence between the Colonial Office and the Hong Kong Goverments when the Section was introduced into the Ordinance.
A section on the lines of Section 3 of the Hong Kong Defence Contribution Ordinance No.1 of 1901 is common to all the Military Contribution Ordinances of the Eastern Colonies. The first portion of the Section follows the lines of the Sections drafted for the Ceylon and lauritius Ordinances in 1897 and 1898 when railway receipts were first
It treated on the basis of net receipts in those Colonies. was introduced in the Straits Settlements Military Contribution Ordinance in 1899, (see paragraph 4, Class I, above) when it was desired to treat a public telephone system on the basis of net receipts, and the C.o. (C.0. letter No. 16849/99 of
C.0, 5th July, 1899, to the Treasury)
to the Treasury), stated that "the insertion of this provision will, ....................remove the inconvenience of having to introduce an amending Ordinance in each case of the establishment of a now preductive undertaking" and "Mr. Chamberlain will instruot the Governor of the Straits Settlements that no new undertaking is to be deemed "of a similar character" to railways or tole phones without pre ious reference to the Secretary of State, who will then submit the proposal to Their Lordships and to the Secretary of State for War".
The second portion of the Section follows the lines of a provision (see paragraph 5 above) introduced in Ceylon, Mauritius and the Straits Settlements in 1904 (Treasury letter No. 6103/01 to the War Office of 19th April, 1904, and C.0. letter No. 14248/1904 to the War Office of 17th May, 1004) to enable capital expenditure met from revenue to be treated as if the expenditure had been mot by a loan deduction for the service of which were provided for in the first portion of the Section.
No such provisions were required in Hong Kong until the construction of the British section of the Kowloon- Canton Railway in 1011 as until that date there were no productive undertakings" in the Colony recognised for military contributions purposes. On the opening of the railway it was agreed that the principle of net receipts should be extended to it and an amonding Ordinance on the lines of the Straits Sottlements Ordinances of 1899 and 1904 was approved.
It was howover expressly laid down (Treasury letter No. 15072/11 to the Colonial Office of 12th August, 1911) that"...as in the similar case of the Straits Settlements (0.0. letter of the 5th July, 1899/16849)...... in the event
other than railways or of any 'reproductive undertakings telephones being established by the Colonial Government principle of net receipts to military contribution shall not be extended to such undertakings without previous reference
the
to/