C. 52802/28 [No. 20].
No.
32
PROOF.
MY DEAR CROSLAND,
MR. W. C. BOTTOMLEY (COLONIAL OFFICE)
to
MR. J. B. CROSLAND (WAR OFFICE).
Downing Street, 8th January, 1929. I AM sorry to have been so long replying to your letter of the 27th of November* about the Hong Kong military contribution. The despatch sending particulars of the claims for relief under the existing arrangement has now arrived and is being sent to you officially.
As to the other points raised in your letter I will take them one by one:
(1) I enclose a copy of the statement† enclosed in Hong Kong despatch of the 24th of June, 1926,‡ which I am sorry was omitted from our official letter. It appears from this that the figures you quote are roughly accurate. The total contribution under the old system between 1901 and 1927 was approxi- mately 59 million dollars as compared with 49 million on the new basis. The figures of 1901 to 1922 were 36 and 31 millions respectively. Obviously on the face of it it looks as if you would have lost if the new basis had been adopted earlier but it must be remembered that if the claims for relief which Hong Kong are now putting forward had been conceded earlier, the contribution would have been considerably less. You will see from the Hong Kong despatch of the 1st of November, 1928, that the estimated deductions amount to something like a third of the total contribution, so that you would have been decidedly worse off if these had been made. Moreover it must be remembered that the valuation increased less rapidly than the aggregate revenue during the disturbance of prices in the war years owing to the natural slowness with which house and land rents adjusted themselves to the new level of prices. In the last three or four years you will observe that the assessment has risen although the revenue has fallen, and looking at the pre-war years only the two systems give almost identical figures ($17,800,000 and $17,500,000 respectively). It is dangerous, therefore, to lay too much stress on a comparison which includes the war years.
(2) I do not think there is very much in this fear. It is, of course, obvious that rents in Kowloon, which is undeveloped, will be lower than on Hong Kong Island itself, but it will be somewhat remarkable, if, owing to the development of Kowloon, the aggregate assessment decreases. It is very difficult to forecast the movement of the valuation of property even a few years ahead but experience generally suggests that the more thickly popu- lated a place becomes the higher the rents rise.
(3) We have no exact information as to what area the valuation covers.
Para-
graph 14 of the Governor's despatch of the 24th of June, 1926, stated that it extends to the whole of the island of Hong Kong, Kowloon, and New Kowloon, and we assume that it excludes only the less settled parts of the new territories. We agree, however, that it will be essential to get an exact definition of the area before we reach any final agreement, and are asking Hong Kong by telegram to send an exact definition, with map. (4) We do not think that the adoption of the proposed new basis in Hong Kong would be followed by a similar proposal for the other Eastern Colonies. Conditions in Hong Kong are quite peculiar. Practically speaking Hong Kong consists of a large urban area and very little countryside. Government is the Municipality and accordingly raises part of its revenue from rates levied on an assessment, which rates would elsewhere be received by a separate Municipality. These conditions are not reproduced in the Straits Settlements, Ceylon, or Mauritius, and I do not think there is any likelihood of any of them proposing to adopt a similar system. (Apart from this I do not quite see, if you decide that it is a good system to adopt in Hong Kong, why you should be afraid of its extension elsewhere.)
* No. C. 52802/28 [No. 17].
Straits Defence Con.-Gp. 6.
↑ Not printed.
§ No. C. 52802/28 [No. 18]. 131/2963. 24. 8/34. (18272) M. & S., Ltd.
No. 14661/26.
The
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