-10 -
(c) Any claims directly arising from the war which
may become payable in the future to be mot from Imperial funds. This would include further possible claims in respect of confiscation by the Japaneso, requisitioning and denial and the more definito commitment in respect of pay to local Government employees who were not intcrnod.
(a)
(e)
Claims already met in respect of foodstuffs requisitioned, which were afterwards seized by the Japanese, and refunds mado in respect of sums borrowed by Dr. Sclwyn-Clarke and Sir Franklin Gimson for the purpose of purchasing supplies for internees to be accepted as a charge against Imperial funds.
The grant of £70,000 and loan of £30,000 to the University to be regarded as having been met from Imperial and not from Hong Kong funds.
49
29.
I venture to submit that a settlement on less gonerous lines than those would fail to discharge the moral obligation which still rests with His Majesty's Government to ensure that Hong Kong resumes its place in the British Commonwealth under conditions which provido a sound foundation for a prosperous future. His Majesty's Government would, to a large extent, only be waiving claims for the refund of sums advanced in furtherance of the common war offort. They would be accepting responsibility for certain payments still in suspense, including one (volunteer pay and pensions) which they have already accepted in rospect of other Colonial Forces, but no heavy cash settlement would be involved as many of the payments, such as those in respect of maintenance and relief, have already actually been met from Imperial funds. It is true that a further cash payment might be necessary in respect of war claims of the types mentioned in paragraphs 11 to 13, but it is hoped that these will never ovontunte. The acceptance of liability for the cost of foodstuffs requisitioned on the outbreak of hostilitios, for refunds of advancos in respect of supplies for the Stanley Internment Camp, and for payments to non-interned local personnel would involve moderately heavy cash commitments, but these only reprosent a vry small fraction of one day's expenditure on the recent war.
30.
A settlement on the terms suggested cannot be regarded as favouring this Colony to an unduo degree. Hong Kong would be accepting full responsibility for the repair of the very extensive damage caused by the war and for the re-equipment of the various Government services. This will probably cost at least $180,000,000 and the charges for the servicing of the
Cast se proposed loan of $150,000,000 will be heavy for a Colony of
-87m
Encl. 4
this size. In doing this it seems to me that the Colony will be shouldering its full share, and probably more than its full share, of the burden imposed by the war. For a Colony to suffer complete devastation and to meet the cost of making good such damage from its own very limited resources is no mean feat, particularly when it is remembered that the surplus balances, which had been built up over a period of years to m.ct a financial crisis, had practically all been dissipated during the years 1938-1941 on preparations for war.
There were,
therefore, no surplus funds invested in the United Kingdom which could be drawn on for reconstruction purposes. All had beon liquidated in an effort to moet the throat which hung over the Colony, and the magnitude of Hong Kong's expenditure in this connection is probably not realised after this lapse of time. I attach a statement which sets out some of the details. Although, owing to the destruction of records, tho statement is necessarily incomplete, it will be seen that, even if expenditure after the 31st March, 1941, is almost complotoly excluded, the total reaches the formidable figure
: