25
55178/10/46
to
point is developed more fully in paragraphs 1 and 18
of No. 38, on which I regret no action has so far been
taken owing to the pressure of other work. The point
is also referred to in Mr. Lloyd's minute on
55358/46. Since that minute was written the question
of assistance to the Malayan Governments to meet the
cost of compensation for war damage has been raised
with the Treasury and the Treasury attitude has not
indicated any readiness to consider a gesture on the
lines of the grant to Malta. On the other hand it
must be remembered that Hong Kong has had to receive
advances towards meeting administration deficits since
1944 and these advances have so far amounted to about
£3,000,000. In deference to Treasury insistence on
the point the advances have been described as loans
on terms to be settled later. In a conversation with
Mr. Serpell on the telephone he expressed his personal
seemest view that there
little point in treating these
advances as loans as the prospect of Hong Kong being
appeared 16 be somewhat
able to repay seemed/Temote after taking into account
Hong Kong's other liabilities both actual and
potential. This was of course purely a personal view,
but it does perhaps indicate that Treasury are
beginning to recognise that the advances will in fact
have to be treated as free grants. In addition H.M.G.
will, as far as can be seen at present, have to assist
Hong Kong in meeting the cost of compensation for war
damage claims. In spite of Treasury attitude on the
question of similar assistance to the Malayan Union
Government, it is doubtful whether they would be able
to maintain the same attitude in respect of the
assistance required by Hong Kong.
Thus in my view, whilst it is unlikely that
Treasury would agree to any gesture similar to that
made in the case of Malta, nevertheless Hong Kong has
/received