Page 11.
56
42.
No claim was made by Mr. J.A. Galvin for expenses, referred to in paragraph 40 above, prior to his relinquishing the agency in Japan but I have recently been informed that Government have approved a lump sum payment to him of H.K.$8,000 and U.S.$2,000 (payable to Mr. Galvin's bank account in New York) which it appears it is not possible to support with details of the actual espenditure incurred by him on behalf of the Hong Kong Goverment during the period he acted as Government Agent, Japan. 43.
In January, 1948, the Governor signed an Imprest Warrant for $10,000 in favour of Mr. Kenrick, to be available to him for his office expenses. The Director, Supplies, Trade & Industries Department was instructed by the Financial Secretary that he should reimburse to the imprest the office expenses and the salaries of staff engaged in Japan from the Japanese Trade Suspense Account and for the salaries of the Supplies, Trade and Industries Department staff such as Mr. Kenrick, the Director was instructed to reimburse by transfer from his Personal Emoluments vote. The Financial Secretary also approved that expenditure on the purchase of a motor car for the use of the Government Agent, and on the purchase of wines and spirits up to $250 per month for entertain- ment purposes by this officer, should also be charged against the Suspense Account for Japanese Trade. My predecessor expressed the opinion to the Financial Secretary that the expenditure incurred in the running of the Government Agency in Japan is not proper charge to Suspense and that from the point of view of financial control it is unsatisfactory, as well as irregular, that the Government Agent should be authorised to incur cxpenditure which is outside the authority of the General Warrant and is not limited by the estimates approved by the Legislature. been informed that the payment to Mr. Galvin referred to in the preceding
I have recently paragraph is to be charged to the Suspense Account
Japanese Trade
and
I have enquired whether the covering approval of the Secretary of State is being sought for this expenditure to be so charged. In the meantime I propose to adhere to the view expressed by my predecessor in this connection. 44.
In the draft despatch to the Secretary of State prepared by the Director, referred to in paragraph 8 above, it was stated that Government had made arrangements with the Hong Kong & Shanghai Banking Corporation to operate the Japanese Trade Suspense Account "for Government and to handle all documents making and receiving payment for authorised imports and exports under normal commercial safeguards as to margins etc." and I informed the Colonial Secretary at paragraph 2(11)(b) of my comments on the draft despatch that I had not been informed of the agreement that had been made with the Bank in this connection. I have since seen, on the Supplies, Trade and Industries Department files, a copy of a circular issued by the Financial Secretary, and dated the 4th of March, 1948, in which it is stated that the Hong Kong & Shanghai Bank will "act as agents for the Government both in Hong Kong and Tokyo, for the examination and forwarding of documents and the receipt of Hong Kong Currency against such documents". Details are also
set out in a memorandum attached to the circular as to the procedure for dealing with exports to and imports from Japan, rates of exchange and commission charges. It appears that the latter are as follows:
20
(a) Imports from Japan
-
11% of which the Bank will retain %,
7
(b) Exports to Japan 1% of which the Bank will retain 1%.
Full information is awaited as to the authority for this agreement and of the accounting arrangements and I shall inform you further in this connection in due course.
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