86
1. As regards paras 10 and 11 of
your letter, it is noted that the
Army Council i draw a distinction
(and actual profits, and recondly between the forfits)
firstly between book profits arising from
sterling appreciation of the securities,
and profits arising from depreciation of
the Hong Kong dollar. As regards the first,
I am to point out that the considerati ons
put forward in the Colonial Office letter
of 20th November, 1931, apply just as much
to realised profits and losses as to book
profits and losses. If such profits, whether
realised or not, are included in the revenue
liable to assessment, it should be admitted
as a corollary that deductions should be
made for
losses. Moreover, it is felt
that it is not proper to draw a distinction
between changes due to ordinary appreciation
or depreciation of securities, and changes
due to alterations in the value of the
Hong Long