regarding the financial aspects of the hand-over, in the terms of which you concurred. since, however, the period in question was 80 snort, we feel that the most expedicnt arrangement would be for the War Office to bear the cost of the prolongation of military administration in Sarawak up to the time of hand-over on the 15th April, and in view of the consideratione I have set out above we trust you will be able to agree with this view, and that an appropriation in aid from Colonial Office Votes will not be considered necessary
(c) British North Borneo, Brunei and Labuan:
As the decisions to defer the transfer were based on political rather than military considerations we agree that the Colonial Office will have to be responsible for meeting the cost of the Military Administration as from the 1st pril, 1946. I gather from James' letter that, in fact, the cost will be met in the first case on War Office Votes but that you would ask that corresponding amounts should be paid to you from Colonial Office Votes and used as an appropriation in aid on War Office Votes. Provision for such a charge will presumably have to be met from Sub-head 7.2 of the Colonial and Middle Eastern Services Vote (Civil Estimates Class II, 10). The present provision of £800,000 is unlikely to be sufficient to meet the cost of the Military dministration in those territories subas quent to the 31st March, and also to meet any assistance which will be require d by the Civil Administration when established.
3. The position will, we hope, be clearer after the Civil Administrations have been established for
a few months and we shall then be in a position to estimate
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