IWAD TELEGRAM
DUPLI
This document must be paraphrased if the communication of its contents to any person outside Government Service is authorised.
TO THE SECRETARY OF STATE FOR THE COLONIES
Orij. on 94003/10/49.
FROM HONG KONG (Sir A. Grantham)
41/
D. 21st October, 1949. R. 21st
**
14.10 hrs.
IMMEDIATE
No. 1121
Garrison.
Secret
Your telegram No. 1392.
Contribution towards cost of reinforcement of
This was raised tentatively at last meeting of Finance Committee, and as was expected, attitude of Unofficial Members was that they were not prepared to consider contribution towards present emergency until slate had been wiped clean in respect of the last war.
2.
By far the largest item still outstanding is the denial claims, which amount to some 825 million. It will be remembered that Government made it quite clear that they accepted the terms of the War Expenditure Settlement with H.A. Government early in 1948 on the understanding that these claims would be met by the Service Departments, but that owing to miscarriage of one of my telegrams a serious misunderstanding arose and the impression at the Condon end was that these claims were excluded. (My telegram No.426 of 1948 and my savingram No. 40 of 1948 refer ). It was finally agreed that claims should be re-examined by the Service Departments concerned but nothing further has transpired. Denial was effected at the instance of the Services and tbls Government merely acted as the agent of the latter in signing the requisitions.
3
A similer situation has arisen in another connection, where the Admiralty have repudiated a large claim from local firm for flour requisitioned on their behalf in 1941. Again, this Government merely signed the requisition as agent for the Admiralty, and this is not disputed. It is argued, however, that owing to the surrender
the Navy
was only able to consume a very small portion or the flour and that as they received no benefit from the romainder they should not
pay for it. This is clear evidence however, that they became the legal owners of the whole There is also the question of War Supply Board claims dealt with in your confidential despatch No. 87 of 21st April.
4.
before
stock.
Unofficial Members will urge very strongly that they consider any contribution towards the coaf of the present emergency they should be given an 28surance that Hong Kong will not be expected to meet these outstanding elatus and that other omparatively small items of war Papenditure which for the reason er another st$11 remath unsettled, should rest when they lis
I 90 submitting the Hong Kong gede h you in detail by despatch as soon as possible
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