CO129-532-1 Basis of assessment for military contributions 9-12-1930 - 29-3-1932 — Page 17

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impose any extra taxation to meet the interest on

this loan. There was no substantial increase in

taxation until last year, and I do not think that

we can pretend that that was imposed as a result

of the 1927 loan. I am afraid, therefore, that

our case on the merits of the matter is weak, but

we are practically in the very strong position of having passed the Ordinance, and the War Office have got to prove that it is now desirable to

They have

amend it, is accepted i faits accomplis

in the past/in the case of the Mauritius Mare- aux -

Vacoas Water Works in 1897 M'ria's Sagan export curly in 1923 ( Eu W.O. mamo.)

(2). Rate of interest on capital expenditure

net from revenue. I have ascertained the average

rates of issue of Colonial loans in this country

from the Crown Agents, and these are given in the

accompanying draft to the War Office. I think

these figures fully justify us in asking for a 6

per cent allowance on the Hong Kong Wireless

Telegraph expenditure, a good deal of which was

incurred before 1921; but perhaps they do not

quite justify the adoption of a rate of 6 per cent

for general application in future, bearing in

mind the reduction in sinking fund contribution

consequent on the increase in the rate of interest.

We may therefore have to compromise on 52 per cent,

although an excessive allowance now would only be

a just compensation for the inadequate rate which

has been allowed in the past.

(3).

Revenue from land sales. This revenue

has always been excluded from the calculation of

military contribution, and Ir. Roseway stated that

he understood that it was the intention that the

interest on investments made out of proceeds of

land