CO129-394 - Governor Sir May & Public Offices - 1912 [12] — Page 282

57/20/4567 (1.0.C.F.)

WAR OFFICE PO CROWW AGENTS

9333

APR 12J

War Office, S.V.

25th March 1912

Gentlemen,

I am directed to acknowledge the receipt of your letter dated 7th ultimo, No.6/Hong Kong/1233,

respecting the price charged for some ammunition supplied

to Hong Kong ard to inform you that it is the

practice to charge Colonial Governments the actual cost,

as closely as it can be ascertained, of the stores

manufactured for them in the Ordnance Factories. To

arrive at euch cost all expense incurred in carrying

out the order, including such unremunerative

expenditure as is referred to in your letter, is

charged.

The result is that although a Colony may be

saddled in rare instances, es in this case, with an

exceptionally heavy charge, it pays, on the whole, no

more than would be the case if a percentage to cover

the risks of manufactur ing lossen were added on all

orders.

For contracts placed with the Trale, the

prices quoted by the private manufacturer are such

as to cover manufacturing risks as well as a margin for

profit. In the Ordnance Factories riske are only

charged when they actually occur.

-1-

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