5
Mr. Caine.
I agree with Mr. Mayle that the two points mentioned in his minute are points of substance which we ought to consider.
Prima facie, I should not be disposed to press the objection made in Mr. Mayle's second point, because although the partial remission of premiums in the case of war damaged buildings is open to the theoretical objection of giving special treatment to a particular class of property owners, I can well believe that the practical need of getting property rehabilitated as quickly as possible out- weighs this.
On the other hand, there seems to me very much force indeed in Mr. Mayle's first point. Unless the Hong Kong Government are under some obligation which is not stated in the Governor's despatch and enclosure to extend tenures at the rent applicable in the period immediately before the outbreak of the war, it seems to me an extraordinary thing to have done, since it presents lease-holders with two unearned increments in the value of the lease-hold as compared with the rent, namely:-
(1) that due to the fall in the value of money
since 1941, and
(2)
that due to any appreciation in the value of property after allowance has been made for (1) which has occurred or is in prospect.
Subject to your views, I would suggest proceeding on the general lines proposed by Mr. Mayle, though I would emphasise the differing weight to be attached to the two objections as indicated in this minute.
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7.8W.
20.8.46.
As stated by Mr. Mayle I took a considerable interest in this subject while in Hong Kong and am glad to have seen the papers again. I was then perhaps the principal supporter of the view that the government should secure the whole, or substantially the whole, of its legal rights on the renewal of the 75 year leases. I still think that is right as general policy, but agree with the views now expressed by the local govern- ment that special conditions now apply. What we were dealing with before the war was a claim from certain property owners to substantial uncovenanted benefits merely because they happened to be in possession of certain properties and without their doing anything by way of additional development to deserve such special consideration. Today I agree with the Governor that there is a real public interest in getting people to renew their leases and undertake new development or
/redevelopment