2.
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Naval and Military magazines in Hong Kong were
indivisible parts of one comprehensive scheme.
(ii) That the Colonial Government failed to
implement its undertaking with regard to the Military part of the scheme and is therefore solely responsible for the complications that
have arisen in the fulfilment of the Naval part.
Neither of those assumptions is admitted by this Government.
With regard to the first assumption, from the
point of view of this Government the reprovisioning of the
Naval and Military magazines formed two entirely distinct
matters. It is true that they were under discussion at the
same time, but the Colonial Government had no reason to
suppose that they were inter-dependent except in so far as there had been a proposal by the Admiralty (vide the
Admiralty letter to the Colonial Office of 7th February,
29 1929) that there should be a joint Naval and Military magazine
on Stonecutters Island. This proposal was not pursued owing
to the opposition of Major General Sandilands for the reasons
given in his secret letter to the War Office dated 9th May,
1929. The questions of Naval and Military magazines then
became separate and distinct so far as this Government was
concerned, and the possibility of their being undertaken at the expense of the Colonial Government became largely a question of finance balanced against benefits accruing to
the Colony.
5.
With regard to the second assumption and to the opinion expressed in the third paragraph of the War Office letter, that the Colonial Goverment receded from its
understanding with the War Department, I take this