Mr.
Redman
?
I have read this file with interest. It contains papers we had been expecting to receive from Hong Kong. It seems unfortunate that signal 99625 F5 was despatched on 1st March, when the answer to some of the questions had been received on the 15th February. You will, no doubt, be discussing the agreement attached to the War Office letter of the 15th February and the Hong Kong Rear Link at 28, Grosvenor Street would like to be represented at your meetings.
Do you agree? If so, late Chief Electrical Engineer,
and whilst I am away King Hong Kong can attend.
Stung
(L.M. KING)
pp. D.M. Kenrick
A.O.D.
2nd April, 1946.
Mr. Kenrick
have taken You will, of
[1. I agree that it is unfortunate that it should so long to track down this elusive draft Agreement. course, be aware that our telegram of 1st March was despatched with the concurrence of the Colonial Office (Mr.Palmer's letter of 22nd February) and subsequent enquiries regarding the receipt of the despatch were made by us in letters of 16th March and 2nd April. The Agreement has now been examined by the War Office branches concerned, and their remarks are contained in the following paragraphs. In the meantime, a further telegram from Hong Kong arrived yesterday asking for approval to pay rental and a copy is enclosed for your information.
2. As we see it, in a case like this where Military Administration is forced to take over a private concern in the early stages of occupation of territory previously held by the enemy, a suitable basis of agreement would be one covering out of pocket charges and receipts only, e.g. in starting such services we would regard it as reasonable for the Military Administration to provide labour free and to agree some suitable system of financial adjustment for repair of plant to ensure that, while the military administration bear the cost of minor repairs to get the plant working, they do not bear the full cost of new plant which is an improvement on previous fittings; and once the service was operating as a going concern we should regard it as reasonable for the military administration to bear the operating costs and to take the receipts, at any rate up to the full amount incurred in costs.
3. On this basis we should be prepared to accept the draft agreements in this case (subject to a suitable settlement in detail under Clause 5) with the exception of the provision for payment of rent (Clause 6). It seems to us that this provision is most one-sided when considered against the background of affairs in Hong Kong after the reoccupation. These Companies were engaged at their own risk in providing public services in the Colony; their control of these services lapsed during the Japanese occupation and when British forces recaptured Hong Kong, they were not in a position to supply the public services which were essential for the life of the Colony; the military administration had to step in and cover the first difficult period of 6 or 7 months. It seems to us that Companies in this position would be fairly treated if
/the