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33. 4. Russell Edmunds (IM)
23-11-48
(30) is the first of Hong Kong's reviews of her financial position and policy. Mr. Radford's minute of 3/11 and the statement filed at (32) give what seems to me the correct position, leaving out of account rehabilitation and developmental expenditure.
Unless the liability on account of requisitioned property denied to the enemy amounts to something near the maximum possibility of $25 million (which is most unlikely) it seems possible for Hong Kong to settle its war-time liabilities (as known to us) and yet have a moderate revenue surplus in hand at the end of 1948/49. But prediction is particularly unsafe in the present state of affairs in China.
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Paragraph 5. We have recently written to the War Office (from 55136/90/48) asking for an early decision on the claim referred to in this paragraph. The amount involved is between 82 million and $2 million. As regards the claims against the Governments of India and Burma the se were registered on Commercial Relations and Supplies Department files. At the moment I am trying without avail to trace these files so as to give the matter a fillip.
3. Paragraph 8. The matter of the small crafts supplied to Hong Kong by the Ministry of Transport after the war is dealt with on 54337/48, which is with me at the moment.
4. Paragraph 9. Paragraph 32 of (9) told us that Hong Kong might find it necessary to make a further public issue of the Rehabilitation Loan before the end of this year. (We have as yet had no definite announcement of such an intention). The position is that only one issue (of $50 million) out of the $150 million sanctioned has so far been made. The question of whether Hong Kong is to be allowed to make its later issues in bearer bonds (as it did the first issue) is still under discussion on 54126/4/48(sent to Mr. Kelvin-Stark and Mr. Palmer on 17/11).
5. We must acknowledge receipt of this Report, but in the uncertainty of the moment as to the turn events in China will take, there seems little that can usefully be said by way of comment.
I have put in a draft savingram which is self- explanatory. I shall be only too glad if Finance Department can think of something more worth saying.
Whatever we reply will of course have to be cleared with Treasury, who were sent a copy of (30) when it came in.
J.useen
24.11.48.
sending this
un.
amendments after speaking