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authority of the Secretary of State would be
required, since the only possible solution
of the deadlock would then seem to be a decision
It is, as I have previously
of the Cabinet.
indicated, an, inconvenient feature of these
arrangements for the payment of military
contribution that there is no provision for
an ultimate decision as to the interpretation
of the provisions of the arrangements.
If the War Office adhere to their
previous view, I think it would be necessary to
prepare proposals for a definite revision of
the arrangements under which military contribution
is paid.
The amount of the contribution
is assuming alarming proportions, and is
likely to increase still more rapidly if the
existing arrangements are maintained. I think
it is clear that the scheme adopted in 1895
is by no means suitable for the existing
conditions under which the Hong Kong Government
have extended their activities into fields which
were not contemplated when the arrangement
was made.
It is clear that this increasi ng
burden is causing serious resentment in
Hong Kong. If there were in Hong Kong a
legislature comparable to the State Council in
Ceylon, it is clear that the demand for
revision of the arrangement could not be
resisted,s since the Council would almost
certainly hold up the whole administration
until what they regarded as their legitimate
claims were met.
It is for serious consideration
whether we shall not be compelled to allow the
Hong