CO129-547-4 Military contributions 23-2-1934 - 28-11-1934 — Page 31

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intention on the part of the Colony of redeeming the 6% loan

in question by money raised under the $28,000,000 loan, the

War Office agreed not to pursue the question of this repeal.

Also, with Treasury concurrence, we agreed to the exemption

from assessment for contribution purposes of the revenue for

the service of the projected 28 million dollar loan, on the

grounds mainly that the loan was to be devoted predominantly

to objects which would themselves eventually produce more

ordinary revenue, and that the increased taxation necessary

to provide for military contribution on the additional

revenue to be raised for the service of the loan would

adversely affect the development of the Colony. We stated,

however, that this was in the nature of a special concession

and without prejudice to the principles of the military

Contribution (paragraph 6 of our letter 16/Abroad/276 of 25th

February, 1933).

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We have now received from our Financial Adviser at

31706/24 Hong Kong details of a bill providing for a loan of 25 million. Lem.. Ea

I Public Works dollars, and the schedule, leaving out the redemption of the

1927 loan as to which see below, is in fact (with minor

vari variations as to amounts) that of your letter of 19th August,

1932, referred to above, with one important exception which

is the reason for my sending you this letter. Item No. 7

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~/ unanswered!

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