CO129-575-16 Tung Wah hospital 9-2-1939 - 17-11-1939 — Page 17

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to approve them only if Government were prepared to give an undertaking to make up any deficit incurred as

a result. I found it impossible to give a blank cheque

to the Directors in that way particularly as such

arrangement must eventually deprive them of any

incentive to increase voluntary subscriptions which

still form a substantial part of the income of the

hospitals. It was recognised, however, that a

substantial increase in Government assistance would

be necessary if the hospitals were to maintain the improvements effected in them. After prolonged discussion I agreed with the advice of my Executive

Council and subject to your approval to the Government grant in respect of 1939 being increased from $121,000 to $320,000 and to the reimbursement by Government of

any special expenditure actually incurred as provided in the draft estimates up to a maximum of $80,000 as

stated above. In addition it was recognised that the

Government was morally committed to the reimbursement of

the whole or substantially the whole of the deficit

actually incurred during 1938 for which it was understood

during the negotiations last year for the reorganization

of the hospital that Government would assume liability.

That deficit amounted to $106,000. I have therefore

agreed also subject to your approval to an additional grant in respect of the year 1938 of $100,000.

5.

It is proposed that payment should be made

as follows:-

An immediate payment of the sum of $100,000

in respect of 1938 deficit will be made.

A further $199,000 will be due in respect of

1939 in addition to the $121,000 provided in the

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