CO537-3703 — Page 61

Tel. No. Whitehall 1234

NATIONAL

DISABLE

ED

• Your Reference.

Treasury Reference

TREASURY CHAMBERS,

GREAT GEORGE STREET,

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LONDON, S.W.1

18th March, 1948

We discussed yesterday the problems of external control over the affairs of the Municipal Council which is to be established in Hong Kong. We owe you an apology for not having given earlier comments on your draft despatch, but, as I explained to you, we have found the problem very intractable. In the meantime we assume that the Governor has been going ahead with the preparation of legislation and other detailed preparation as authorised in par.6 of your despatch No.222 of the 3rd July.

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We note that you are sending the Governor material on the control of local authorities in England and Wales, and the relationships between Colonial Govern- ments and some of the major existing municipalities

But it is quite clear that none of these precedents are entirely appropriate for Hong Kong, where the Central Government and the Municipal Council both cover by far the most important part of the territory of the Colony. What you are really doing, in effect, is dividing powers and functions, an operation which has not often been attempted elsewhere.

The general feasibility of the operation is fortunately for you and not for us. It has in any case been decided upon. On the question of financial control, we have been thinking along two divergent lines. principle, there would be much to be said for giving the municipality that degree of responsibility over

N. L. Mayle, Esq.,

Colonial Office.

LIVEL

21 MAR '948

C. O. REGY

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