CO129-550-3 Empire Air Mail Services- cost of participation to be exempted from assessment for military contributions... 19-10-1934 - 17-1-1935 — Page 8

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#lord. In paragraph 6 of No.l Hong Kong was asked to contribute £5000 per annum as a subsidy for the scheme under which all first

class mail would be carried by air as from 1937. They were told that this sum had been assessed especially low in recognition of the fact that

connection by other services (viz. by ocean steamer from Singapore) would be involved to complete the journey to long ong. Since these arrangements were made and that despatch sent, it has been

decided that the Imperial Airways Line must be

extended to Hong Kong via Bangkok in the course of 1935. This seems to me to upset the basis of the

'Hong Kong assessment of £5000.

8

As far as the War Office is concerned, our experience of their attitude towards demands for the exemption

of particular classes of revenue from the Defence Contribution assessment, is judged entirely from

the point of view of the amount of money involved, and while they might agree to exempt £5000 it would

not follow that they would exempt some larger

figure.

y's

The Colon Defence Contribution

X

in Hong Kong is substantially less than the cost of

the garrison and therefore any concession to the Colony as regards the revenue required to meet this expenditure on the Air Mail Scheme would mean a corresponding increase on home ( War Department funds for the cost of the garrison.

This Air Mail scheme is definitely of an

imperial character, the cost of which is primarily

a charge on home funds with contributions to such

extent as can be collected from those individual

Colonies which are touched by it. It seems to me

reasonable, therefore, for Hong Kong to take the

view that they would be prepared to levy x pounds

from

Page

Page

9

$300,000

ove

the

5ears fust year's instalment

to be $100,000

A

These fiques mly offer on to For Easter

مسون ٢٠٠ من كلمت معه

ما

will pedably aquand with Imperiri linways

of way to qui's chifferent

-B.v.v.

No. It had been

the Hong Yong taxpayer in respect of the scheme, but that since under the

Defence Con-

tributions Ordnance 20 has to be handed over

to the War Department, they will only have

x minus 20% to pay over to the Air Ministry

Jap

Scheme In that case the 20% would fall to be

an

met from Home Funds by addition to the Air Vote-

H. Kimkol

or be relieved of the Defence Contribution

obligation in respect of this particular item of revenue in which case Home Funds would be charged with this 20% by an addition to the

War Office Vote.

I don't think it is necessary to connect this question of Hong Kong's contribution to the Air Ministry's scheme with the other question of Hong Kong's subsidy to Air line link with the Colony.

.*. the

The Governor has not asked that the latter should be exempted from Defence Contribution, and in view of the parti- cular interest to Hong Kong of that link, a claim to exemption would not be as strong as the

present cleim in No.2. If we can confirm with the Air Ministry the figure of £5000 in the altered circumstances of Hong Kong, it might then be considered whether we need delay negotiations

winded in the Estimate, with the War Office for exempting the necessary

lav 1933 34 por

to this amount

revenue for Hong Kong's contribution to the

any" offer" by the Company Empire Air Mail Scheme. had been thought a bonit

ills

Itsums to me

that defere

20/12

wrong in principle

defence contribution thou cabe levria

upon Hong Kong's contributions towards air

Kuries designed to connect that Colony with the

age 9

age 9

Page

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ge 10

10

the

No. This world

not be the result.

Hong Kay would hay

£5000 to A/M in any case. Th question is whether

She should also

exiña (on the

Mvens weed to

UK. Hong Kong's contributions to both the

trunk service

from England to Questralia and

feeder service from Bangkok to HK, will be joint

Contributions

and

if the result of

levymý

defence contribretion's upon those contributions is

that Hong Kong's share is less than it would

otherwise br, the reduction will fall

on

the UK

i.e. W.O. votes will benefit at the cxpense of

votes. Itseems tome preferable therefore

shoved try for

ай

that we

the exemption in principle

rate than on

the

specific

amount.

the

the

trunk service

only.

The sum

hay the £5000) HK misidy for

Eb.o.

1.v.v.

タ

£7500 mentioned by Mr Bader does not appear

to come into the picture orice that is ordinary

postal expenditure which will in the normal

course be set off against recupts from

the sale

yet in a position to

of stamps. We are not yet

say what contribution HK, will be expected to

make towards the meridy required for the feeder

serrie.

Woning

31/12/24

There appears to me to be some confusion

of thought and misunderstanding in the above minutes.

The Hong Kong defence contribution is a percentage

of

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