411
82
total contribution under the old system between 1901 and 1927 was approxi- mately 59 million dollars as compared with 494 million on the new basis The figures of 1901 to 1922 were 36 and 31 millions respectively. Obviously on the face of it it looks as if you would have lost if the new basis had been adopted earlier but it must be remembered that if the claims for relief which Hong Kong are now putting forward had been conceded earlier, the con- tribution would have been considerably less. You will see from the Hong Kong despatch of the 1st of November, 1928*, that the estimated deductions amount to something like a third of the total contribution, so that you would have been decidedly worse off if these had been made. Moreover it must be remembered that the valuation increased less rapidly than the aggregate revenue during the disturbance of prices in the war years owing to the natural slowness with which house and land rents adjusted themselves to the new level of prices. In the last three or four years you will observe that the assessment has risen although the revenue has fallen, and looking at the pre-war years only the two systems give almost identical figures ($17,800,000 and $17,500,000 respectively). It is dangerous, therefore, to lay too much stress on a comparison which includes the war years.
(2) I do not think there is very much in this fear. It is, of course, obvious that rents in Kowloon, which is undeveloped, will be lower than on Hong Kong Island itself, but it will be somewhat remarkable, if, owing to the develop- ment of Kowloon, the aggregate assessment decreases. It is very difficult to forecast the movement of the valuation of property even a few years ahead but experience generally suggests that the more thickly populated a place becomes the higher the rents rise.
Para-
(3) We have no exact information as to what area the valuation covers.
graph 14 of the Governor's despatch of the 24th of June, 1926, stated that it extends to the whole of the island of Hong Kong, Kowloon, and New Kowloon, and we assume that it excludes only the less settled parts of the new territories. We agree, however, that it will be essential to get an exact definition of the area before we reach any final agreement, and are asking Hong Kong by telegram to send an exact definition, with map.
(4) We do not think that the adoption of the proposed new basis in Hong Kong would be followed by a similar proposal for the other Eastern Colonies. Conditions in Hong Kong are quite peculiar. Practically speaking Hong Kong consists of a large urban area and very little countryside. The Government is the Municipality and accordingly raises part of its revenue from rates levied on an assessment, which rates would elsewhere be received by a separate Municipality. These conditions are not reproduced in the Straits Settlements, Ceylon, or Mauritius, and I do not think there is any likelihood of any of them proposing to adopt a similar system. (Apart from this I do not quite see, if you decide that it is a good system to adopt in Hong Kong, why you should be afraid of its extension elsewhere.)
(5) As you will have seen from our official letter of the 14th of December†, the Hong Kong Government is not now prepared to waive the refund of £114,000 overpaid.
(6) Our not writing to the Treasury was an oversight and we have now sent them
a copy of our official letter to you of the 12th of October.
Yours, &c.,
W. C. BOTTOMLEY.
• No. 63.
† C. 52802/28 [No. 16]: not printed.
1
C. 62832/29 [No. 1].
(Confidential.)
SIR,
83
No. 65.
HONG KONG.
THE GOVERNOR
to
THE SECRETARY OF STATE. (Received 15th April, 1929.)
Government House, Hong Kong, 13th March, 1929. With reference to your telegram of the 2nd January, 1929*, regarding the military contribution to this Colony and requesting to be furnished with the exact definition of the arca intended to be covered by the assessment, I have the honour to inform you that the area covered by the assessment consists of the whole of the island of Hong Kong, the whole of Kowloon, and that part of the New Territories between Laichikok and Lyemun Pass which drains in a southerly direction from the Kowloon Mountain Range and is known as New Kowloon.
I enclose in duplicate a plant showing the areas assessed.
I have, &c.,
C. CLEMENTI,
Governor, &c.
C. 62832/29 [No. 3].
No. 66.
TREASURY
to
COLONIAL OFFICE.
(S. 33955.)
SIR,
Treasury Chambers, 31st July, 1929.
The Lords Commissioners of His Majesty's Treasury have had before them your letter of the 26th January, 1929, with enclosures relative to a proposal made by the Governor of Hong Kong for changing the method of assessing the military contribution of Hong Kong.
I am now to request you to inform Secretary Lord Passfield that My Lords have consulted the War Office on this proposal and They desire me to transmit herewith a copy of a letter dated the 25th April, 1929, with enclosure which They have received from that Department.
My Lords after careful consideration find Themselves in general agreement with the conclusion of the Army Council that the proposed substitution of a 12 per cent levy on rateable value for 20 per cent of gross revenue as the limit of the contribution (subject as at present to the cost of the garrison not being exceeded) is not only not justified on its own merits, but is likely to prove unfavourable to this country. To the detailed arguments adduced by the War Office. They would only add:-
(1) that there is the possibility that the recent gradual fall in the price of silver may continue and that valuations of property may not be adjusted thereto, and while there may be a recovery in the price of silver (though existing indications cannot be said to point in that direction), the fall that has already occurred is in any case likely to be much more fully reflected in the yield of revenue generally than in rateable value;
(2) that, while My Lords have not the material to enable Them to make a detailed examination of the figures of revenue and expenditure of the Colony for the years 1925 and onwards, They suspect that the revenue for those years was so much affected by the boycott and the disturbances in China generally that the comparison between actual yield on the present basis of assessment and that under the proposed alternative for those years is of very doubtful value.
* C. 52802/28 [No. 19]: not printed. ↑ Not printed.
C. 52802/28 [No. 23]: not printed.
1
PUBLIC RECORD OFFICE
Reference :-
TREEC.O. 882/11
PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO