7
53652/47
My dear Neve Dongall;
548
Colonial Office,
Downing Street,
S.W.1.
12th July, 1947.
When Young came to the Colonial Office the other day our discussions with him touched, amongst other things, on Hong Kong's financial position, aná he enquired whether, as Hong Kong is not actually in receipt of assistance from H.M.G. at the moment its finances are still subject to general Treasury control.
Je assured him that the Treasury will still feel bound to insist on exercising this general control since, as his despatch No.11 of the 9th May shows, the balancing of the present budget, though a noteworthy achievement, is still pretty precarious, and there are still the various indeterminate liabilities referred to in our confidential despatch No.452 of the 14th June, which the Treasury will have to underwrite if we don't succeed in persuading them to relieve you of them altogether. Moreover, it was the case before the war that a territory which had been in receipt of Treasury assistance had to show a clean bill for, usually, three successive years after last receiving any grant or loan from H.H.G., before Treasury control over its finances was removed. Whether or not it would be necessary to continue control for such a lengthy period in Hong Kong's case is, of course, something we can consider later in the light of the extent to which the Colony seems able to stand on its own feet again. Personally, I should hope this would not be
necessary
D.M. MACDOUGALL, ESQ., C.M.G.