CO537-4320 — Page 87

14349/13/48

BAVING

From the Secretary of State for the Colonies

To the Officer Administering the Government of HONG KONG.

Date 21 October, 1948.

No. 216 Saving

TOP SECRET,

F

Your despatch No. 21 of 9th June, Proposal to amend Telephone Ordinance No.9 of 1925.

1.

I am advised that the insertion of this amendment in the Ordinance would create a new and important obligation as a condition on which the concession was granted and in accordance with which it is operated(vide Section 3 of Ordinance 9 of 1925). Fresumably refusal of compliance with a requisition under the proposed new Section 55a would have to be met by some kind of action, otherwise the Governor's order would be ineffective, in which case Section 45 or 46 (or both) of the Ordinance would no doubt be invoked. The Company might well complain that to legislate in this way is something very much like a breach of contract introduced after the agreement under which the concession was ranted, and which, because it is legislation, they are powerless to prevent.

2.

It would, therefore, be inadvisable to proceed with the amending Bill without obtaining the formal agreement of the Company. I note, however, from demi-official correspondence on this subject (MacDougall's letter of 22nd September) that this may present difficulties at the present time, and I must say that, in any case I should have thought it preferable to avoid recourse to legislation in this matter if at all possible.

3. If, however, it is decided to proceed with the amendment proposed after obtaining the formal agreement of the Company, I should see no prave objection provided you are satisfied that the considerable objection from the public which you anticipate can be effectively answered.

R.