CO129-532-1 Basis of assessment for military contributions 9-12-1930 - 29-3-1932 — Page 8

MS.

1

A

Action on this file has been held

up for months by the absence of the General

papers referred to in 6. They are still in

circulation; but we may get on with the other

matters involved, leaving this point, the treatment of " profits on exchange", for

separate consideration afterwards.

The War Office have prepared a very

useful memorandum on the general principles

governing the method of calculating revenues

assessable to military contribution;

but

they do not suggest that we should concur

in the memorandum or embark on a discussion

of principles and I think it will be best

to avoid doing so.

Our immediate concern is to settle

claims put forward on behalf of Hong Kong in

the Governor's despatch of 11th December, 1930

(1 on this file). The proposals, with the

War Office reply on each, are as follows: -

Wireless Telegraphy.

(a) Capital Expenditure.

The Hong Kong proposal is that the

percentage representing the interest

charges should be deducted from

Revenue before 20% computation is

made. The War Office are evidently

prepared to accept this.

The Colony further propose that

the percentage allowed by the Defence

Contribution Ordinance (4%) should

be raised to 6% "owing to increased

interest