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(a) the fact that given the strength and intensity of
prevent inflationary tendencies in this restricted area, the genorrl reasons against overspending in Hong Kong at the present juncture are very strong.
evertheless, I could not cccept the view that it will not be both practicable and desirable for Hong Kong in the near future to supplement from her om resources the Colonial Development and elfore assistance which she is due to receive, and I will await with interest your proposels for the expenditure of the second half of the Hong Kong allocation under the Colonial Development and elfure not, in connection with the urban develop- ment of long Song.
I understand from the Financial Secretary
that the proposals which have hitherto been submitted cannot in frot be said to represent an integral part of Hong Kong's development plan es auch, but are rather in the nature of interim proposals for the expenditure of a proportion of the colony's Colonial Development and Felfare allocation, pending the elabora** tion of a full plan which will include the remainder of that allocation and which must depend, at least in some mensure, on the outcome of Sir Patrick /bercrombie's investigations.
I em encouraged by this to believe that expenditure of Hong Kong funkis for developeæent purposes, side by side with the expenditure of the Colonial Development and elfare allocetion and the items of developmental character included in the 1948/9 Estimates is, indeed, contemplated,
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Turning to the proposals subedtted in your despatch, the only general coment I have to offer is that some of them seem to be of directly remmerative nature and should more properly be finamed by loan then by grant, and that it would be preferable to confine Colonial Development and elfare ausistance to those It proposals which might properly be financed by free grants. certainly should not follow that because a project of a commercial nature is to be run by Goverment it should not ucite a prorit, although further consideration would obviously be necessary of the
In this purposes to which profits so made should be applied. general context you should of course continue to bear in mind tho possible use of the Colonial Development Corporation.
5. The proposals for the improvement of landing facilities at the Bennedy Tora Dakot, referred to in paragraph 13 of your despatch, and for roelmation at Aberdeen, referred to in paragraph 14 of your despatch, have already been approved as schemes Nos. 3. 925 and D. 924 respectively (vide my telegram No. 385).
$
6. The recommendation for a pond fisheries survey, referred to in paragraph 16 of your despatch, is also accepted in principle. I understand that there ay be difficulty in securing the required export, and I suggest that when the terme on which une can be secured are inom, a formal application for & (olonial Development and elfore grunt should be made to me. in the meantime, I agree that expenditure may be incurred if necessary in anticipation of the application,
7. I enclose a nemorenúm commenting on the reunindor of the proposals, to which I shall be prepared to give further consideration on the receipt of your views on these couents.
8. In conclusion, i would take this opportunity to refer to the reclamation schemes which formed the subject of telegraphic correspondence, concluding to date with my telegrum To. 624 of the 4th June, in which I informed you that finance for those projects could not be provided under the Colonial Development and ́elftre vote. the opportunity has been triken of a preliminary,
/Mgcussion