Pago
9.
54
3.
It transpired subsequently that goods were consigned by the Supreme Coplandor for the Allied Powers direct to local importer's without advice having been sent to Government and that, in some cases, shipping firms released goods so consigned under Letters of Guarantee given by the consignees. As a consequence, Government was not in a position either to insist on pre-payment by the local importers before delivery of the goods, nor, in fact, to know what goods had been shipped by the Supreme Commander for the Allied Powers until the detailed statements of account were received (at a much later date) of the amounts which SCAP had charged against Govern- ment in the "Two-way" Account. It is understood that for certain shipman ts action was taken to obtain details of all cargoes, and the names of consignees, from ships' manifests but the attention of Goverment was drawn to the possibility of loss in this connection in respect of goods which were not consigned by SCAP to the Supplies, Trade and Industries Department. Acting Director subsequently stated that SCAP has been informed that Govern-
The ment will accept liability only in respect of goods con signed direct to the Supplies, Trade and Industries Department.
35.
(c)
"Two-Way" Account with the Supreme Commander for the
Allied Powers.
This Department has not been informed of any limitation placed by the Hong Kong Government on the extant to which SCAP night be allowed to be either in debit or credit with Government through the "Tip-Way" Account, but in the memorandum addressed to the Accountant General referred
to in paragraph 33 above, the Acting Director undertook to limit the amount owing by SCAP at any particular time to a naxinun of U.S.$1,750,000, and stated "there is little danger of the amount due to us fra SCAP reaching too high a figure as our difficulty is rather the opposite, i.e. that of selling enough to Japan to finance our import trade. present relying on purchasing credits from the Singapore Governant".
We are, in fact, at
56.
Subsequent audit examination of the "Two-way" Account revealed that the balance owing by SCAP had been allowed to exceed the figure of U.S.$1,750,000 and that at the 31st of December, 1947, it stood at U.S.$3,258,885.69. This matter, and the fact that the accumulation of this balance involves an appropriation of public funds of a like amount which has not been authorised by the Legislature, wore brought to the notice of Government and the view was expressed by my predecessor that the arrangements made with the SCAP should be covered by a formal agreement. 37.
In the draft despatch to the Secretary of State prepared by the Director and referred to in paragraph 6 above, it was stated that authority had been given to extend the limit of U.S.$1,750,000 to U.S.$2,500,000; but when commenting on the draft despatch I informed the Colonial Secretary that I have not been informed of this extension nor of the authority under which it was conveyed.
58.
In connection with the purchase from the Malayan Govement of credits with the Supreme Commander for the Allied Powers in Japan, a query has recently been addressed to the Accountant General an a payment of H.K.$11,967,276.96 to the Hong Kong and Shanghai Bank for the cost of a draft in Singapore for Straits $6,357,615.89 which has been charged to the Industries Section Suspense Account. No details of the transaction are given on the Payment Voucher (No.1147 of July, 1947) and I have accordingly asked to be fully informed in this connection and of the authority under which the exponditure has been charged to Suspense. A reply is awaited.
39.
Certain discrepancies have been observed and brought to the notice of the Director between statanants of account received from SCAP and the account for SCAP in the department's books of account. At the time that the