250
would be difficult to persuade the unofficials to agree to increased
taxation, not to cover expenditure but to build up reserves. The most we
could do would be to point out again to the Colony that it should provide a
reasonable contribution towards the additional expenditure incurred in its
defence and that it could not expect assistance from H.M.G. in the way of
loans until it had utilised its own resources, including increased taxation
to the greatest extent possible.
Mr. Dugdale summed up by saying that he was glad to have had the
opportunity of discussing the problem and, while he hoped that Hong Kong would
in due course increase its taxation to build up reserves to finance its own
development expenditure, he agreed that in present circumstances and
The
particularly in view of the possible ill-effects on trade due to the "American embargo" and the constitutional aspect mentioned by Mr. Sidebotham,
the Governor should not be pressed to increase taxation immediately. Governor's attention should, however, be drawn to the correspondence on the
defence contribution and access to the London Loan market.
1/2/51.
Page 190Page 191