A.
contribution on net profits of $744,230 in 1933.
The amount payable would have been $148,846.
Actually in 1933 the Hong Kong Government paid
$110,150 approximately on account of Military
contribution in respect of the revenue required
for the service of the 1918/43 inscribed Stock
and nothing on the net profits of the Railway.
Therefore, if the identity of the 1906 Railway
loan is held to have been extinguished by the
conversion, the Hong Kong Government will
probably in future have to pay more on account
of Military Contribution in respect of the
profits on the railway than they paid previously
on the revenue required for the service of the
plus the wet propts (if any) on the Railway)
1918/43 Stock notwithstanding the fact that
£1,241,100 of that stock will have been redeemed,
and the remainder (£244,633) converted.
It would
be unfair to ask them further to increase their
payments by making the revenue required for the
service of the converted portion liable to
assessment for the purpose of calculating
Military Contribution.
If on the other hand it is held that
the identity of the remainder of the 1906
Railway loan of £1,143,933 which is to be
converted, namely £244,633, will not have been
destroyed by the conversion the position will
be that so long as that remainder is unredeemed
the Government of Hong Kong will be at liberty
to include the revenue required for its service (31% of $3,400,000 annually on account of interest) on the expenditure side in calculating the net profits on the railway.
It is impossible to say what the exact
results of doing so will be, but on the 1933
figures
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9
figures the position would be as follows:
Railway
Gross Receipts
Revenue
Expenditure