C. 92622/32 [No. 3].
PROOF.
No.
HONG KONG.
THE OFFICER ADMINISTERING THE GOVERNMENT
to
THE SECRETARY OF STATE.
(Received 9.18 a.m., 30th July, 1932.)
TELEGRAM.
30TH JULY. No. 159. Confidential. Your despatch of 3rd June, Confidential.* Military contribution. Paragraph 9 of War Office letter of 25th April.†
Repeal of Section 15 of Ordinance No. 14 of 1927 will be strongly opposed by Unofficial Members of Council. Ordinance has been in force for nearly five years without question and charge of military contribution on interest and Sinking Fund will arouse all old bitterness on the subject of military contribution. I strongly urge that no effort be made to interfere with Ordinance No. 14 of 1927.
The proposal to charge military contribution on interest and Sinking Fund of new loan will also be very strongly opposed. Revenue has been very largely expanded in Hong Kong in recent years on account of the enlargement of sphere of Government activities see paragraph 3 of Lord Passfield's Confidential despatch of 26th July, 1930-and on this expansion military contribution is paid to an extent which justifies a reconsideration of the basis of contribution settled by Haliburton Committee.
Large capital expenditure is now required which can only be financed by loan and if military contribution is to be levied on interest and Sinking Fund as well as revenue derived from work to be constructed it will so greatly increase cost of work as seriously to retard development. Military contribution is already paid on waterworks revenue estimated for next year at 1,400,000 dollars in addition to water rates included in general rates.
As regards paragraph 14 of War Office letter, whilst it is admitted that military contribution does not cover cost of garrison it is very strongly felt in the Colony that garrison is not maintained here merely for defence of Hong Kong but also for defence of British interests in China and that it would be entirely inequitable to charge Hong Kong with the whole cost.
Before any action is taken to charge military contribution on interest and Sinking Fund either existing Public Works Loan or on proposed new loan action which will arouse acute unofficial opposition I suggest that Peel be consulted.
Matter is urgent as Estimates for 1933 are now being considered and military contribution on interest and Sinking Fund for 1927 Loan alone would be over 150,000 dollars.
* C. 92622/32 [No. 2]: not printed.
Straits Defence Con.-Gp. 6.
‡ No. C. 72756/30 [No. 131/2963.
† No. C. 92622/32 [No. 1].
].
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