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improvement of the service in Hongong as it has else- where in similər circumstances. To this end I would be willing favourably to consider a scheme for the contribution from United Kingdom funds of a sum not exceeding $250,000, as suggested in paragraph 5 of your savingram under reference. This contribution
would be made from the £1 million, which as explained in my Confidential Circular Despatch of 29th March, 1949, I have made available from the General Reserve under the Colonial Development and Welfare Act for assisting the establishment or improvement of Colonial broadcasting services. It would be quite separate from any payment by His Majesty's Government of the cost of special services undertaken by the Hong Kong Government, if it were decided to broadcast beyond the Colony itself, and should be considered. independently. This 1 million is available subject to conditions which leave little scope for its application to recurring as distinct from capital costs. I imagine, however, that this is not a serious disadvantage in the case of Hong Kong, since it is the need for assistance in capital expenditure which you have stressed. I have also noted that the number of receiving licences in Hong Kong has recently shown a marked increase and I believe that no other Colonial territory has such good prospects of being able to cover the recurring costs of its broad- casting service from its licence revenue.
4. I shall be grateful to have your comments as soon as possible.
SECER.
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