* Sec. 24/1486/48
SAVINGRAM
To the Secretary of State for the Colonies.
From the Governor, Hong Kong.
81
Date 8 January, 1950.
No.
SECRET.
18 47
(47) on/49
With reference to your telegram No.1502 of the 29th October, 1949, on the subject of a contribution towards the cost of reinforcements, I observe that you consider tirat the question of such a contribution is a separate issue, and no related to certain claims arising from the last war, of which the largest item amounts to some
I twentyfive million dollars in respect of denial claims. think you will agree, however, on, consideration of the following points that the two atters are in fact very closely related from the point of view of this Government.
2.
In 1941, when any Service department wished to acquire any supplies, venicles, ships, etc., they presented their demands to the Colonial Government who onerated the necessary requisition which was invariably signed by the competent civil authority. This had the effect of rendering the Civil Government lera ly liable for any compensation etc., which might become due, with the unfortunate results set out in my despatch No.195 of 1th November, 1949, regarding the failure of the Naval authorities to accept 54485 liability for a large consignment of flour requisitioned on
(3)
their behalf.
3.
Tt is unuerstood that in certain Colonies such as Malta, officers of the fighting services were designated as competent authorities for the purpose of requisitioning, which could. however, only be carried out with the concurrence of the Civil Coverment. But, as the actual requisition order was signed by an officer of one of the Services, the Tgal liability fo compensation rested with the 3ervice Kinistry concerned.
44.
Unfortunately, as I have explained, tnis was not the position in Hong Kong, and the owners of the ships which
*.7 and sunk as block ships or merely to deny their use to the enemy are in a position at any time to institute proceedings against this Goverment for the recovery of the compensation due to them. There could be no possible defence and thus at any moment this Government might be forced to find a very large sum indeed at very short notice to settle these claims. It is quite within the bounds of possibility that such a move may be made. As you will recollect, Sir Robert Ho Tung raised the
matter while he was in London recently, and, as he did not obtain satisfaction there, iu is quite probable that he may initiate more drastic action at this end. It is known that such a move has hitherto not been made only because the interested parties take it for granted that it is merely a question of time before His Majesty's Government honour their obligations.
5.
A similar legal liability against this Government exists in respect of a claim for wool tops ordered by the War Supplies Board on behalf of the Government of India. This amounts to £80,557, and the reason why there is a legal liability against the Colonial Government in this