Enclosure No.3.
53
Your Excellency,
The Taxation Committee which you, Sir,
appointed in 1938 "to consider and report what methods of taxation could best be adopted in the Colony, should
it be necessary to raise additional revenue, having regard to the Colony's general economic position and the importance of distributing any additional burden
in the most equitable manner in relation to the
incidence of existing taxation" among its minor
recommendations under the heading Utility Companies
stated, in connection with the Telephone Company, "We
are informed that the present franchise of this
Company is unsatisfactory in various ways both to the Company and to Government and we recommend that
the possibility of revision in such & manner as to
secure higher royalties for Government, while removing
the features which are at present objectionable to the
Company, should be investigated in collaboration with
the Company".
Before the Telephone Ordinance No. 9 of 1925, which it is now proposed further to amend, was
introduced into this Council a Resolution moved by
the then Colonial Secretary, Sir Claud Severn, Was
passed. That Resolution described the negotiations which led up to the deter ination under the Ordinance of the franchise to operate telephones which had been granted in 1905 by the Government to the China and Japan Telephone and Electric Company, Limited and the
creation of its successor, the present Hong Kong
Telephone Company. The main objects of Government in 1925 were to secure that the Company should in
future be domiciled in Hong Kong and work on a dollar
basis and to provide an improved telephone service
The first object was realised by
in the Colony.