CO129-566-21 Military contributions 7-5-1938 - 31-1-1939 — Page 23

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the arrangement for a fixed contribution. It has, however, been

suggested that the provisions of this clause, which have little

if any legal effect, are inappropriate in the ordinance itself,

and that if a public record is desired of the agreement reached

between His Majesty's Government and the Hong Kong Government it

should be stated by the mover at the second reading of the bill in

the Legislature.

3.

In anticipation of the coming into operation of the new

system of contribution it is proposed, with the consent of my

Executive Council, to pay into the United Kingdom Treasury Chest in

the Colony before the end of the current year the estimated amount

of the arrears of contribution which will be due in respect of 1938.

As you are no doubt aware, it has been the practice to make a monthly

payment equal to one-twelfth of the contribution calculated on the

estimated revenue of the year and to make adjustments, according to

the actual revenue received, some time during the following year.

While this practice may have been unobjectionable when the percentage

basis of contribution was continuing, it seems to me preferable that

the Colony's liabilities under the old system should be cleared as

fully as possible before the new system is commenced, instead of

carrying over a liability which, owing to the large increase of

revenue, will amount at 31st December, 1938 to nearly $1,000,000.

It will, of course, be impossible to calculate the actual contribution

due for 1938 with absolute accuracy until some weeks after the end

of the year, but as close an approximation as possible will be made, and any necessary adjustment to be made in 1939 will, it is hoped,

be quite small.

I have the honour to be,

Sir,

Your most obedient, humble servant,

/. and. katuents

Governor.