75
In connection with the questions referred to in this lett an examination has been made of the returns submitted by the Colonial Government annually in support of their calculation
It has been of the amount of the military contribution. discovered that under the provisions of Section 15 of an Ordinance (No.14 of 1927), the Colonial Government has since 1928 deducted the following amounts from the revenue assessable to contribution on account of charges for a loan for waterworks, etc. :-
$
1928
380,000
1929
628,000
1930
628,000
Total
81,636,000
and that a similar deduction of $628,000 may apparently be expected for a number of years to come until the loan is paid off; the resultant loss to Army funds to the end of 1930
The Council learn on amounts to approximately £29,000.
enquiry that, contrary to the long established principles relating to all modifications affecting the military contributions, the approval of your Department has inadvertently been given to the Ordinance in question without the requisite prior concurrence of the Lords Commissioners of the Treasury end of the Army Council.
The Council gather that sanction to the inclusion in the Ordinance of the power to make deductions for the service of the 1927 loan was given on the supposed analogy of the similar deductions by Ordinance No.12 of 1916 which was approved by the Treasury and permits of deductions for the service of a War Loan raised in connection with the contribution made by the Hong Kong Government towards the cost of the war. The Council are unable to see any analogy between the two loans, and they would not have beer prepared to agree to the power of deductions which has been approved.
As the deductions up to and including 1930 have been made by the Colony under the sanction of your Department given in 1927, the Council feel that it is unfortunately impossible for them to press now that they should be cancelled
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