A
Treasury letter of the 27th January, 1947, while disagreeing with the terms of the proposed Colonial Office message to the Far Eastern Governments on the whole subject, agreed with the Colonial Office view that the first step must be for the War Office to draw up a statement of the invoice costs of the supplies in question (the Treasury letter also spoke of certain information being required from the Colonial Office itself, but that was not in relation to the "hangover" stores with which we are now concerned). copy of the Treasury letter, as well as the Colonial Office letter to which the Treasury were replying was sent to the War Office, and it is a fact that the latter Department did not succeed in producing the figures which were agreed between the Treasury and the Colonial Office to be the necessary prerequisite to any further action. In saying this, I am not seeking to lay blame on the War Office indeed, it is becoming increasingly apparent that agreed figures on this subject would be virtually impossible to obtain. Nor am I saying that it was necessarily the job of the Treasury rather than the Colonial Office to remind the War Office after a certain time had elapsed. At that time the pressure of work on all concerned was very heavy indeed, and no doubt all the Departments concerned must share in any blame which is duc. I do say, however, that any attempt to place the blame entirely or mainly on the Colonial Office is contradicted by the facts.
5. So much for the past. We have now reached the time when some definite solution must be achieved. The position, as we see it in the Colonial Office, is that a provisional arrangement was made on the clear understanding that it was only provisional, and that the whole question remains open for settlement (without either side being in any way committed by what has happened in the past), in the light of all the relevant facts as we see them today.. Let us therefore endeavour to look at these facts impartially and see what conclusions should be drawn. It would be possible to adopt either of two extreme stand-points. On the one hand, it would be possible to claim that the Far Eastern Colonial Governments should reimburse His Majesty's Government in respect of the full expenditure incurred by the latter on all the stores in question, and to support this claim by arguing that the goods
(a) fell into the lap of the restored Civil Governments and were used
for their benefit, no matter when or by whom they were ordered, and
(b) were supplied by His Majesty's Government in good faith and to the
best of their ability, even though they may not have proved suitable in all cases.
On the other hand, it could be claimed that in paying over the proceeds from sales the Far Eastern Colonial Governments have fully discharged any debt for which they could equitably be held liable, and this claim in its turn could be supported by a number of arguments. First, it could be pointed out that the goods were originally accepted as a military commitment, for procurement by the War Office during the period of Military Administration, and that the Colonial Governments have nothing to do with the delays in shipment which subsequently took place. From this it could be argued that the goods should be treated in exactly the same way as military stores which arrived before the end of the Military Administration, payment for which has ultimately been settled on the basis of His Majesty's Government receiving only the proceeds from sale. Secondly, it could be argued that the Civil authorities, both in London and in the Far East, were in no way concerned with the choice and procurement of the goods, many of which proved on arrival to be unwanted and unsuitable, and that it would therefore be iniquitous to saddle the Colonial Governments with the liability for the losses which
were
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