379
No. 24/1841/46s.
CONFIDENTIAL & PERSONAL.
afton,
Dear Sir ton
COLONIAL SECRETARIAT,
LOWER ALBERT ROAD,
HONG KONG.
18th April, 1950.
I know that the Far Eastern Economic Review used to be read a good deal in Whitehall. I do not know whether it still is, as it has lost caste to a great extent in the Far East during the last eighteen months or so. In case, however, that you have seen the article on page 440 of the issue of the 6th April and are a little alarmed by the statement that we have shelved the proposal to raise the standard rate of earnings and profits tax, it may perhaps be a good thing to give you a little background information regarding this periodical.
The present editor one . E. Halpern, an Austrian Jew, has not been giving satisfaction for some time and his directors decided to get rid of him. They have been trying for a long time to find a suitable substitute. They have succeeded in interesting candidates in the United Kingdom, but they have backed out at the last moment. However, I gathe that now they have at last managed to find someone, No suit- able substitute is available locally so, until they can import someone, it is a matter of bearing with Halpern or closing down the paper.
Halpern was always irresponsible and, when warned over the gold transactions question that he was doing harm, he persisted in his activities. His Board instructed him to submit all his copy to one of the directors for scrutiny before publication, but he only submitted such portion of the copy as suited his convenience. He was in trouble with the Bank of China some little time ago, and had to publish an apology. You may also have noticed an apology which he insert- ed fairly recently in regard to a statement about our Exchange Control which was probably actionable. I enclose a copy of the correspondence for your information.
As
Now just before the Budget Debate, no doubt suspect- ing that we might have to impose additional taxation, he published an article on the finances of the Colony. That this was done with the object of causing us embarrassment I do not doubt and the theme was that, for some unspecified ulterior motive, I consistently under-estimated revenue and over estimated expenditure. Actually the final expenditure figure during the last three years has been slightly over the original estimate so there has certainly been no over-estimation. far as revenue is concerned, receipts from duties on various articles are subject to the most violent fluctuation. example in the case of tobacco they have varied between 182
For million and $35 million and in the case of hydrocarbon oils (mostly kerosene) between $2 million and $13 million. all depends on the exports of duty paid stocks and whether
It any drawback is claimed, which in turn depends on the degree of confusion which obtains at any particular time. We obviously cannot gamble on heavy smuggling of duty paid stcs
Sir Hilton Poynton, K.C.N.G.,
Colonial office,
LONDON.
or on.