CO129-593-3 Rehabilitation of Hong Kong University. For extracted photographs see CN 3-45 12-1-1946 - 27-10-1946 — Page 26

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in any case be likely to be needed from these sources if the main scheme of the Report is not adopted; (b) that the proportion of the Colonial revenues being spent on the University should not decrease. By criterion (a), so far as I can form an opinion after further discussion with Mr. Sloss, something like the proposed increased contribution from the Hong Kong Government on the one hand and the C.D.W. grant on the other are likely to be needed in any case even if the main recommendation of the Report fails through lack of Treasury support. As regards criterion (b), Mr. Caine spoke of the probability of a policy of increased revenues at Hong Kong which again points in favour of the line taken in the Memorandum.

7. The most serious difficulty I have experienced in considering the Memorandum has been in respect of the fear expressed by Mr. Sloss (referred to in para. 6 of the Memorandum at X and in para. 3 of Miss Ruston's minute) that the increased local Government expenditure on the University may be to the detriment of much needed increased expenditure on primary education. But after further discussion of this I am clear that considerable further expenditure on the University, or its equivalent, by the local Government would be necessary in any case and it will be essential for us to secure that any general increase over the decade in Hong Kong revenues is reflected in its expenditure on primary education. This will, however, need constant vigilance.

Carla Cox

4. 10. 46.

This file has only reached me this morning and I send it on at once in view of the suggestion in paragraph 2 for a discussion with Dr. Priestley to-morrow afternoon after he has discussed Malaya. I should like to be present at the discussion.

I am sorry that I was unable, owing to another important meeting, to attend the discussion on the 24th September which has resulted in the draft memorandum now submitted on the sources from which the additional expenditure on the University involved by the recommendations of the Advisory Committee should be met. I am afraid that I do not agree that 50% of this expenditure (capital and recurrent) over the next 10 years should be met from Hong Kong funds, including grants from C.D. & W. For one thing, I think that this is much too much for us to propose for Hong Kong at the outset and for another, I think that a sounder basis to adopt would be to deal with capital and recurrent expenditure separately, and make the proposals cover the whole of the capital expenditure. As regards recurrent, in the case of Imperial grants, there is always the constitutional difficulty about getting assurances for future years, but I think that the agreement of the Treasury to provision being made in the Imperial Estimates from year to year would be a sufficiently firm basis for us to work on and it would certainly be preferable not to limit this assistance to 10 years. Insofar as the proposals now put forward are based on estimates of the numbers of students likely to be forthcoming from the Colonies, on the one hand and from

foreign