53652/49
The Church House,
Great Smith Street,
S.W.1.
16th August, 1949.
57
We sent you copies of the 1949-50 Hong Kong Estimates, with the Governor's despatch and the covering memorandum; and you will also recall our telegram No. 285 of the 12th March, 1949, commenting on the advance outline of the Estimates with which the Governor had furnished us.
We should now like to send a telegram
approving the estimates and I enclose a draft. You will see that we make reservations on the linked questions of the level of taxation and the raising of a loan on London. The despatch with which we propose to follow up this telegram would discuss these, in the light especially of probable future liabilities such as construction of reservoirs and of the Deep Bay airfield, and possible liabilities in respect of defence expendi ture. The question of whether Hong Kong should be asked to make a contribution towards the extra cost of re-inforcing the garrison has already been raised. On this and on the other matters in issue we shall of course be seeking discussion with you before sending our despatch to Hong Kong,
Meanwhile
LIEUTENANT COLONEL W. RUSSELL MUNDS,
TREASURY.