PUBLIC RECORD OFFICE
Reference :-
TTTLC.O. 882
minimumím
9 PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO
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view of school fees, &c., and finally refused to offer any more detailed accounts of the cost of the garrison than hal hitherto been submitted.
As Sir John Anderson was expected shortly to arrive Letter of
on Anim on leave, the Secretary of State informed the Treasury 10th April, that he would defer consideration of their letter until he had had an opportunity of discussing it, with the Governor.
Shortly afterwards (in May) a despatch was received fo from Hong Kong, in which Sir Fa Lugard suggested that 1941. the revenue raised to meet the war charges on the Canton- Kowloon Railway should not be assessable to contribu tion; he thought, however, that the gross receipts were
18th May properly assessable. This, of course, was not in accord. Letter of on 14924. ance with the system in force, but the Secretary of State
Thul took the opportunity to ask the Treasury and War Office p accept the prevailing system in the case of Hong Kong: despach of at the same time he explained to the Governor what the 18th May, accepted system was, and consequently why he could not W.O., weept Sir F. Lugard's proposals. The War Office and 1983/11. Treasury agreed, and after the necessary draft ordinance Treasury, had been submitted to the two Departments and agreed 2011. to, the Governor was instructed by a despatch of the 19th Angust to pass the Ordinance without amendment.
Thut letter of
13th July.
W.O..
23572 11. Treasury. 26608/U1.
Bud. despatch.
In June, 1911, Sir F. Lugar reported that the un-
24251/11. official members of Council had been much exercised over Gev., the contribution, and that a resolution fixing the annual payment at $1,000,000 a year had only heen defeated by the official majority. The Governor, besides sending home a report of the debate on the subject, expounded his views at some length; they were that--
(1) Discontent would be removed if all the Eastern colonies paid the same percentage, assessed in the same
way.
(2) An implied condition of the contribution was that
the defences should be adequate, and they were not.
(3) The unofficials urged that the garrison was largely
maintained for Imperial purposes,
A reply was deferred, pending consideration of the line
of attack on the general question. After discussion with Treasury.
Sir John Anderson, the Treasury were informed on the 8014/11.
5th August, 1911. that certain details had already been disposed of, viz., Government buildings and liquor revenue, and that as regards the other points of detail raised by the Treasury or War Office, Mr. Harcourt regretted that he He urged that was quite unable to accept their views. there were so many points of detail to be considered that, in view of the attitude adopted by the War Office and Treasury, a Committee was the only solution. The letter proceeded :—“ I am to observe that the amount by which "the revenue of this country benefits is wholly incom mensurate with the irritation and friction, which is "caused in the Crown Colonies by the present arrange- ments, and I am further to suggest that it is open to argument whether it would not eventually prove to be more in the interest of this country that the amount now “devoted to military contribution should be expended on "the development of the resources and trade and shipping Mr. Harcourt "facilities of the Colonies concerned." therefore again demanded a Committee.
.
.
Gay. 20055, 11
Clay
36469411.
Treasury, 34164/11, Enclosure.
Ibid.. Letter of
23rd
December, 1911.
Treasury, 1139/12.
Treasury,
1420/12.
W.0.. 9031/12.
63
While the two Departments considered this letter, Sir F. Lugard sent a further despatch, dated the 3rd of August, urging that various items of revenue of a municipal character should be excluded from assessable revenue; he, however, expressed the personal view that the Colony did not contribute an undue proportion of revenue, and suggested that the Colonies of Ceylon, the Straits Settlements, and the Federated Malay States should pay a like proportion similarly assessed in every particular as a means of removing the existing grievan e in Hong Kong.
In reply to his despatches the Governor was informed that the Secretary of State was in entire sympathy with his desire to place the contribution on a more equitable and logical basis; that if the Inter-Departmental Committee were appointed he would endeavour to secure the most favourable terms possible for Hong Kong; but that he thought that Sir F. Lugard's views might damage the Colony's case, and therefore that he could not consent to the publication of any of the correspondence, for which the Governor was particularly anxious.
At this time there began a further quarrel between the Treasury and Colonial Office over the grant made to Hong Kong in respect of the loss of revenue due to the opinin policy initiated by His Majesty's Government. The War Office suggested that the amount paid should be subject to the 20 per cent. contribution, and "My Lords accordingly assuined that, like the recent grant-in-aid of
C
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postal expenses, and like the opium revenues, whose
place it partly takes, the grant would be included in the "revenue of the Colony for assessment, and it was on this "basis that they fixed the amount payable." They asked accordingly for contribution on the grant.
My Lords
" did not
It is desirable to remark that fix the amount. They agreed to the proposals of the Secretary of State after an appeal had been made to the Cabinet.
The reply was to the effect that it had not occurred to the Secretary of State or to the Colony, that the grants were liable to assessment for contribution, and that the Secretary of State regretted that he could not ask the Colonial Government to pay.
The Treasury replied, on the 11th of January, 1912, that, in their opinion, it was not necessary to make any mention of the fact that contribution would be payable; that the exclusion of the grant from assessment would be wholly opposed to the principle on which Colonial contri- butions are based, and that they trusted that Mr. Harcourt would feel able to meet their wishes.
The Treasury followed this up with a letter of the 13th January, 1912, again refusing a Committee. The letter enclosed a copy of one from, the War Office, of "In which the following sentence may be quoted: "conclusion I am once more to point out that the present "scheme of Colonial contributions was devised by agree. "ment between all the Departments concerned, to carry " out the long settled policy of the Imperial Government, "by which a Colony making no contribution to the cost "of the Navy pays such contribution to the cost of its "land defence (not exceeding their full cost) as its means will allow."
After semi-official correspondence and personal inter views between the Secretary of State for the Colonies and the Secretary of State for War, it was decided that an
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