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16. CONFIDENTIAL
AIR MAIL
RE
USH
(Enatra 150)
GOVERNMENT HOUSE,
HONG KONG.
39
2
Copy to Trees
ASO
Sir,
22nd June, 1938.
Since I assumed the administration of the
Government of this Colony I have repeatedly had brought to my notice instances of the inconvenience of the present method of assessing the Defence
Contribution paid by it; and I wish to urge very strongly that consideration should be given to the
adoption of a more convenient and at the same time
fairer basis.
2.
I may in the first place recapitulate
briefly the main historical features. From 1864
onwards Hong Kong paid a fixed contribution towards
the cost of its garrison of £20,000 per annum. In
1890 it was increased to £40,000. Actuated largely
by the inconvenience of the wide variations in the
dollar equivalent of this fixed sterling contribution,
and having in mind also the absence of any provision
for periodic re-assessment, the authorities at Home
and in the Colony agreed in 1896 to a contribution
at the rate of 17% of the Colonial Government's
revenues.
In 1900 the percentage was increased to
20% so as to cover certain capital charges for which
THE RIGHT HONOURABLE
J
MALCOLM MACDONALD, M.P.,
20.,
&C.,
&C.