A
114
DRAFT REPLY TO HONG KONG TELEGRAM No. 526.
As regards 2(a) I agree that you should not oppose the motion and that you should say that you have my agreement in principle to relaxation of Treasury
control.
I propose that as a first step there
should be a general review of Hong Kong's financial policy, prospects and administrative arrangements
in which I suggest Followes should participate. In the light of this review former Treasury control would cease and in its place would be substituted an arrangement [similar to that now in force for Malaya] of which the following are the principal features: (1) The Secretary of State's approval will be required for (a) The annual estimate.
(b)
(c)
Additional expenditure not provided in estimates
involving items of capital expenditure exceeding
one million dollars or the current expenditure exceeding 250 thousand dollars per annum under each
individual head.
New posts where salary exceeds
(a) Expenditure involving important points of principa
e.g. changes in salary structure.
(ii) The Secretary of State is kept informed monthly
of the general trend of the Colony's financial
position.
On all these points the Secretary of State will of course consult H.M. Treasury as he may consider
necessary.
Full details will be given in a following telegram but these should suffice for purposes of
your statement.