CO129-566-21 Military contributions 7-5-1938 - 31-1-1939 — Page 39

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16. CONFIDENTIAL

AIR MAIL

RE

USH

(Enatra 150)

GOVERNMENT HOUSE,

HONG KONG.

39

2

Copy to Trees

ASO

Sir,

22nd June, 1938.

Since I assumed the administration of the

Government of this Colony I have repeatedly had brought to my notice instances of the inconvenience of the present method of assessing the Defence

Contribution paid by it; and I wish to urge very strongly that consideration should be given to the

adoption of a more convenient and at the same time

fairer basis.

2.

I may in the first place recapitulate

briefly the main historical features. From 1864

onwards Hong Kong paid a fixed contribution towards

the cost of its garrison of £20,000 per annum. In

1890 it was increased to £40,000. Actuated largely

by the inconvenience of the wide variations in the

dollar equivalent of this fixed sterling contribution,

and having in mind also the absence of any provision

for periodic re-assessment, the authorities at Home

and in the Colony agreed in 1896 to a contribution

at the rate of 17% of the Colonial Government's

revenues.

In 1900 the percentage was increased to

20% so as to cover certain capital charges for which

THE RIGHT HONOURABLE

J

MALCOLM MACDONALD, M.P.,

20.,

&C.,

&C.