in
36
written a pencil comment on "A" (No. 21) to the effect
that he prefers the second of the alternatives there
mentioned unless there is any objection to it of which
he is not at present aware. "The express approval of
the Legislative Council" mentioned in the second
alternative must be taken to mean the express approval
of all or the majority of the unofficial members of
the Legislative Council and it further may mean a
pledge that no tax on incomes would be introduced in
peace time in Hong Kong without the express approval
of those members. We have experience of placing
ourselves in the hands of the unofficial members of
the Legislative Council in some particular respect
viz., in the matter of the Defence Contribution in the
Straits Settlements. I would not say that for that
purpose in the Straits Settlements the result has been
altogether objectionable from the point of view of
the C.0. or the Colonial Government but to the defence
authorities at Singapore and to the Treasury here it has placed a fairly effective difficulty in the way
of increasing the provision for the local forces and increasing the Colony's statutory Defence Contribution.
But far more objectionable would be such a barrier in
Hong Kong against a particular and potentially important
field of revenue. I should expect that we should
meet with allegations of breach of faith if any new taxation were thereafter attempted in Hong Kong which contained a substantial element ofatax on incomes
without the express approval of the unofficial members
of the Council. Personally therefore I should prefer, and it ought to meet the needs, that any agreed income tax measure introduced in the present emergency
should