CO537-2188 — Page 20

As regards supervision of the Municipality's functions, I think you will find that the by-laws of local authorities in this country require the approval of the Minister of Health, and I should have thought that it would be desirable in Hong Kong to have a provision on the lines of Section 40 of Interpretation Ordinance,requiring by-laws to be laid and giving the Legislative Council power to annul them (but not amend them) by resolution.

The Governor is not in favour of the Legislature retaining power to insist upon action by the Municipality; here again I think you will find that if a local authority neglects its duties, the Minister of Health can step in.

I should have thought that some overriding control by the Government was most desirable in respect to some of the functions which it is contemplated should be exercisable by the

Municipality, particularly Education, Town Planning and Social Welfare this is dealt with in 8,

Part B. in (24).

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With reference to the end of para. 42 of the despatch, if a power to rescind is to be subject to the approval of the Secretary of State, this should be provided in the enactment giving the power. Therefore 4t would be most unusual to instruct the Governor to obtain the Secretary of State's prior sanction before introducing a Bill. The more appropriate course, if some thing of the sort is needed, would be to include a Bill of the nature referred to in the Clause in the Royal Instructions requiring Bills to be reserved for the King's pleasure, unless the Governor has the Secretary of State's instructions.

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Care will be necessary in defining the transferred of functions; in particular the expression (see para. 31) "Public Works" seems much too wide. The Colonial Government must of course retain powers in relation to Government Public Works.

The Commission to be appointed will have finance amongst its terms of reference, and it is not quite clear from this despatch what funds will be placed in the hands of the Municipality from the outset. Obviously, if some functions are to be transferred forthwith, and indeed if the Municipal Council is to function at all, it must have some money to carry on with.

I am not quite sure what is meant by the references to "taxes" in paragraph 34.

Local

In

1

authorities obtain the bulk of their revenue from rates, though there is no reason why they should not also receive licence duties and like charges, incidental to delegated functions, but it be most

delegateɖfunctions, unusual to enable a Municipality to levy taxes. this connection I would refer to the important principal that control of finance should be retained in the hands of the Colonial Government. This matter has been much discussed recently in connection with Northern Rhodesia with reference to the common form Clause to the effect that motions and bills which would have the effect of charging Colonial funds cannot be introduced without the consent of the Governor. As I read this despatch, the Governor proposes a departure from this principle in giving the Municipality freedom to raise money and dispose

funds distance a

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svesting

/of

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