replying to the telegram from the Governor of Hong Kong.
CAPTAIN MURRAY observed that the Colony's Report
for 1931 showed that they had direct communications
with China, Siam and the East Indies, and indirect
communications with Europe, via Manilla and the United
States of America, and the profit on these communications
showed a 50% increase on 1930.
MR. VERNON observed that undoubtedly it was
a profitable service and was at the expense of Imperial
and International Communications, Limited.
CAPTAIN MURRAY suggested that this fact was to
be deprecated, and if the Colony were allowed to proceed
with their extensions and developments it would create
a precedent which might be hard to refuse if similar
applications were made from elsewhere.
MR. VERNON pointed out that the Hong Kong Govern-
ment were already in possession of the service, and
suggested therefore that a precedent would not be
created. The Colony had been prepared to sacrifice
the service in imperial interests on the understanding
that they would obtain thereby the high power service.
As the high power service was not now forthcoming they
were not prepared to release their hold on the existing
services which were remunerative.
COLONEL WILLAN pointed out that apart from the high
power service the Company were willing to provide
all the other services asked for, and the real difficulty
only revolved round the high power service station.
MR. VERNON said that he had discussed this matter
with the Secretary of State for the Colonies before
-2-
49