CO129-593-3 Rehabilitation of Hong Kong University. For extracted photographs see CN 3-45 12-1-1946 - 27-10-1946 — Page 57

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3. For the purpose of the approach to the Treasury, we think it desirable to ignore the possibility of the endowment of basic chairs thus reducing the estimate of non-reourrent expenditure in paragraph 73 of the Report to £716,000 and increasing the recurrent expenditure by £10,500 to £152,500 approximately. Also Sloss has, indicated that certain other adjustments should be made in estimating recurrent expenditure reducing the total by £5,500 to £147,000 or £113,500, excluding the Universities income from endowments and fees as estimated in paragraph 72 of the Report. Taking capital and recurrent requirements as £716,000 and £113,500 respectively and taking account of the figures of domicile in the preceding paragraph, we propose to advise the S. of S. that we should ask for a contribution from U.K. funds other than Colonial Development and Welfare of £500,000 towards capital expenditure and $30,000 per annum towards the recurrent expenditure. We should propose that application should be made for a further contribution of £200,000 towards the capital cost from Colonial Development and Welfare central funds i.e. outside the sum provisionally allocated to Hong Kong from Colonial Development and Welfare. Until other demands for Colonial Developments and Welfare assistance towards expenditure on higher education are known it is not certain that above application could be granted in full but the prospects are favourable and if the application does go through only £16,000 would be left to be found from Hong Kong revenues in respect of capital expenditure. Liability for recurrent expenditure from Hong Kong revenues would be an annual figure rising to a maximum of £83,500 which, however, it is thought would not be reached for some 5 to 7 years.

40 As we see it, the position is that apart from the grounds for increasing Hong Kong Government's contribution on account of (a) depreciated purchasing power of Hong Kong dollar as compared with 1939 and (b) on a proportionate basis, that is taking proportion of Hong Kong's contribution to total revenue in 1940 as the standard, Hong Kong Government funds are the obvious source for meeting any deficit after other possibilities have been exhausted. Having regard to figures in paragraph 2, we feel that we cannot reasonably ask for more than contribution suggested in paragraph 3 from U.K. funds other than Colonial Development and Welfare and there is no repeat no prospect of getting more than £200,000 from Colonial Development and Welfare.

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