327/47c.
No. 3i
SECRET.
83.
88
HOUSE,
GOVERNMENT
HONG KONG.
2 August 1948.
Sir,
I have the honour to refer to the arrangements
(62) referred to in paragraph 4 of your Secret telegram No. 533,
=
(88)
as the result of which Mr. D.F. Allen, the local representative of the Ministry of Transport, was directed to investigate on behalf of the Services claims in respect of the requisitioning and denial of vessels in 1941, with a view to ascertaining the total potential liability and its apportionment as between this Government and the Services.
2.
You
In consultation with local Service representatives and my advisers, Mr. Allen recently completed his investigations and prepared a report, dated the 1st. July, which he transmitted to the Ministry or Transpor v whom I assume you will by now have received a copy will know, therefore, that the main recommendation made by Mr. Allen is that the total losses should be shared in the following proportions; this Government 35%, the Admiralty 35%, the War Office 25% and the Air Ministry 5%.
3.
While it is gratifying to note that these proposals represent a substantial concession to the views put forward by this Government, I must still urge that the whole cost of these "Denial" claims should be the responsibility of the Service departments. The circumstances in which they arose have been set forth in Mr. Allen's report; I do not propose to enlarge on these in any detail, but the conclusion that is inevitably forced upon one after a perusal of the report is that it is clear that the action taken by this Government and by the various Service departments in sinking the many craft was dictated, not by the requirements of local defence, for it was then clear that the Colony was doomed, but by the earnest desire to afford the maximum assistance to His Majesty's Government in the long term prosecution of the war. The purely selfish interests of the Colony were subordinated to Imperial interests, and public opinion here generally regards with profound disapproval the suggestion that the Colony should bear any part of the cost of this particular war claim. That this feeling has not been more vocal has been due to the realisation that the attitude of His Majesty's Government had at least been modified to the extent of giving consideration to the question of liability. If the Colony is required to bear even 35% of the cost, the public, in view or its sympathy with Britain's present plight which was expressed in the Legislative Council debate of the 2nd. June last, may be induced to accept the settlement, but I feel bound to emphasize that the impression that will remain will be a lasting one, which may have the most unfortunate results in any future emergency, particularly in view of the settled policy of granting increased representation to unofficial interests in the government of the Colony.
THE RIGHT HONOURABLE
RECEIVED
ARTHUR CREECH JONES,.P. 26 AUG 1948
C.C
AM
4. Pending/