CO129-519-4 Adjustment of exchange account- payment of military contribution on profit on exchange 10-9-1929 - 10-6-1931 — Page 25

No.400.

My Lord,

C.

GOVERNMENT HOUSE,

HONGKONG, 10th September, 1929.

/30

Goo.47207/25

Coisant Treas: & W.C.

62832/79. 19/2/30.

I have the honour to refer to Mr. Amery's

despatch No.431 of November 26th, 1925, and to state that

the suggestions of the Director of Colonial Audit on the subject of the "Exchange Account" have been adopted, and

that the total profits on sterling transactions, i.e. the

direct sterling appreciation of securities realized as well as the appreciation in the dollar values of the original

investments, due to lower exchange, have been carried to

Revenue. I have however, on the Treasurer's representations

retained provisionally in a "Suspense Account Military

Contribution" the 20% Military Contribution payable on the

dollar appreciation factor partly on account of the Colony's

financial difficulty in meeting the payment and partly because I hope to obtain your consent on reconsideration to

the exemption from assessment of what is, I submit, in

reality only a book profit.

2.

As the issue is somewhat complex and has

never been put before you as a comprehensive whole, I propose

at the risk of repetition, to review the general position. regarding "Profit on Exchange" prior to the events which led up to Mr. Amery's despatch under reference and to report

THE RIGHT HONOURABLE

LORD PASSFIELD,

certain

&C.,

&C.,

&c.