CO129-553-9 Empire Air Mail Services- participation of Hong Kong in proposed development 11-3-1935 - 21-5-1935 — Page 12

Tel. No.-Whitehall 9400.

a

Any further communication on this subject should be addressed to :-

The Under-Secretary of State. The War Office,

London, SW.1.

and the following number quoted.

16/Abroad/544 (F,1.)

33861/34

Sir,

YN-FOR

SCHEME

DISABLED

MEN

RECEIVED

[12 MAR 1935

C. O. REGY

THE WAR OFFICE,

114

LONDON, S. W.1.

11 March, 1935.

1.

12

I am commanded by the Army Council to acknowledge the receipt of your letter of 17th January, 1935, No. 33861/34, on the subject of the participation of Hong Kong in the proposed scheme for the development of existing Empire Air Mail services.

2

I am to say that the Council fully appreciate the desirability of securing the support of the various Colonies for the scheme. It appears from the face of the proposals that the United Kingdom have accepted more than half the total subsidy requisite to the scheme, and that undoubted advantages will accrue to the Colony by the improvement and expedition of communications to be anticipated from the scheme. But if, in the opinion of the Secretary of State for the Colonies the terms offered to Hong Kong require improvement, the Army Council are unable to agree that the mode of doing so should take the shape of the waiver of the liability to military contribution in regard to a portion of revenue equal to the subsidy.

3

As Secretary Sir Philip Cunliffe-Lister is aware, the classes of revenue which are exempt from such contribu- tion are clearly defined, and the revenue of Hong Kong has been fully reviewed in recent years at the request of the Colony and one or two further items have been exempted.

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4

It has to be remembered that the contribution of the Colony falls far short of the full cost of the garrison in theory its ultimate liability and it is necessary to apply the limit of 20% of revenue on a consistent basis, or it fails to serve the purpose for which it was set up. In this connection I am to refer you to the correspondence on this subject in 1931, Colonial

The Under Secretary of State,

Colonial Office,

S. W. 1.

Office