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Your Reference 54126/43
Treasury Reference S.51336
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TREASURY CHAMBERS,
GREAT GEORGE STREET,
32
LONDON, S.W.1.
Dear Paskin,
Room 6
ARTMENTth October, 1943.
-Dover House
Will you please refer to your letter of 7th September which deals with the financial position of Hong Kong and the arrangements which will be necessary for the future in view of the fact that Hong Kong funds are no longer sufficient to meet the obligations falling upon them.
As you surmise we will be prepared to advance the funds necessary to fill the gap between revenue and expenditure. The necessary advances should be made from the Colonial Office Vote of Credit as a (b) service and need not bear any interest. The whole question of repay- ment, including the possibility of converting the loan in whole or in part into a free grant would as you suggest need to be looked at after the re-establishment of British administration in the Colony.
We feel that as far as possible the principles of Treasury control over expenditure should follow those normal for a grant-aided Colony. Admittedly the position is some- what peculiar as it will be the Colonial Office itself who will be acting in the capacity of Trustee for the Hong Kong Government. Nevertheless, your department could furnish rough estimates each year and you have in fact in your letter produced a basis of such an estimate. The important thing of course is that we should be in on any new commitment or expenditure of any magnitude. As a matter of fact you have consulted us in advance on practically all that has taken place up till now, and we feel that you should continue to consult us on all save trivial commit- ments, at least, for the time being. We should be particu- larly interested in questions of new appointments, if any, and increases of pay•
J.J. Paskin, Esq.,
Colonial Office.
Yours sincerely,
C.H.M. Wilcox.
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