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Your Reference 5440.3/48.........................
Treasury Reference L...36/187/025
copies sent to Accts. & D.22.
Dear Jallace,
53.
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W. 10/67
TREASURY CHAMBERS,
GREAT GEORGE STREET,
LONDON, S.W.1.
9th June, 1948.
(5)
2
Please refer to your letter of 14th May about development planning in Hong Kong. I apologise for the delay in replying. We have the following comments on your draft despatch.
Paragraph 3. While noting your intention to communicate separately with the Governor about the question of supplementing the Colony's C.D.W. allocation from local resources, we feel that mention should be made in this despatch of the alteration in Hong Kong's financial outlook which has been brought about by H.M. Government's recent generosity. We should not, of course, wish to link the Colony's ability to provide funds for development too closely with the financial settlement which has just been agreed. Indeed it would, we think, be better to enlarge on the manifest duty of the Government to raise revenue to the figure necessary to enable a full development programme to be undertaken. In this context the
financial settlement should be regarded as a catalyst; but, as I am sure you will agree, development will never be treated with proper seriousness until Government makes regular provision for it as a matter of policy.
*
Paragraph 4. We are in wholehearted agreement with your view that the mere fact of Government operating a project should not entail its being run on a non-profitmaking basis. We feel you should go on to make the point that there should be an indication, at an early stage, of what will be done with the profits of Government financed undertakings. Clearly they should not be used merely to reduce taxation but (particularly in view of paragraph 3 above) to
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W.I.J. Wallace, Esq.,
Colonial Office.
/reinforce