financial settlement as set out in paragraph 3
below which would in their view be a
reasonable and indeed a generous one.
3. The settlement would be as follows:
In the first place
(a)/H.M.G. will not seek any contri-
bution from Hong Kong towards the
cost of the military administration:
(b) H.M.G. will treat as free grants the
advances made prior to and after the
establishment of civil government in
Hong Kong, amounting to £3,250,000
in all, except insofar as that sum
has been used for the purchase of
stores for re-sale which has
resulted in cash receipts by the
Hong Kong Government.
are prepared to
(c) H.M.. fake an interest-free
loan to Hong Kong up to a maximum`
of £3,500,000 to supplement funds
available to Hong Kong for the con- the projectan
struction of /international air-
port at Deep Bay. (For your information
(i) "the funds available to Hong
(include
the sum
Hong" would be/received by
Hong Kong if Kai Tak aerodrome were
sold plus the £500,000 to
4.K.
be met from/loan funds,referred
para 256
to in your despatch No292.
(ii) aux¤¤xunderstandxthay H. M.G.
would require repayment of the
loan in an appreciably shorter
period than the 50 years
suggested by you.)
196
The terms of the loan will need to form the subject of further discussions and in particular
/(a) I.m.G.