RML.
Tel. No. Whitehall 1234
NATIONAL
SCHEM
Your Reference. 54126/5/47.
SABLED Treasury Reference IF.16/10/02.
(5)
Dear Palmer,
138
TREASURY CHAMBERS,
GREAT GEORGE STREET,
Copies sent to Accts. D.22
LONDON, S.W.1
23rd December, 1947.
(6) Please refer to my letter of 20th November about the arrangements
for the exercise of Treasury control over Hong Kong, about which Wallace, you and I have had some discussion. As you know, on further consideration, I had felt rather concerned about the probable effects of the adoption of the proposal 4(b) in your letter of 2nd September. Without wishing to depart from the principle that Hong Kong should be encouraged, as far as possible, to stand on its own feet, I had felt increasingly doubtful whether that end would be attained by your proposals, particularly in regard to the colony's programme of rehabilitation and development expenditure. I there- fore asked you how, even that programme was brought within the Hong Kong Estimates, the new arrangements would work in respect of Public Works expenditure. From the ensuing conversation I learned, what I had certainly not understood before, that the Colonial Office's intention was to continue to exercise a fairly rigorous control over Hong Kong and to give that colony only about one-fifth of the latitude proposed in paragraph 4(b) of your letter to the
(5) Treasury of 2nd September.
In the light of this information, I suggested that we should think again, more on the lines of Misc. 460B, about the form of control for Hong Kong. I understood you to say that you would like to consult the Governor. To this proposal we have no objection providing it is made clear that for the time being a measure of control will be necessary, and that this will involve prior Treasury approval of Estimates. I daresay, indeed you will agree that it
H. Palmer, Esq., 0.B.E.,
Colonial Office,
/may