CO129-595-7 Indemnity and Validating Ordinance- 1946- correspondence 18-5-1946 - 11-2-1947 — Page 4

I do not think we can say that the "war period" has

I have in ended yet so far as payments are concerned. one or two instances drawn attention to the need to obtain the approval of the Hong Kong Government before the Colonial Office can authorise any fresh type of expenditure and Treasury authority is not of itself sufficient. But individual payments are still being made solely on Colonial Office authority which have not, as far as I am aare, been authorised by the Hong Kong Government. Generally speaking, these payments are in accordance with decisions taken during the period to the 30th April, 1946 and approved by the Treasury before that date, e.g. payments for stores, Civil Defence personnel, passages of ex-internaes, etc. etc.

It seems to me that it is for the Governor to say when he is in a position to re-establish the normal system of control of expenditure as laid down in

Chapter VII Section (E) of Colonial Regulations, Barb.II.

It must be made clear to all Departments of the Colonial Office that, after that date they are no longer at liberty to authorise expenditure unless (i) it is included in the approved Hong Kong Estimates, or (ii) is covered by Hong Kong Rules and Regulations, Ordinances etc; (iii) Hong Kong Government's prior approval is obtained. In addition, Treasury authority may also be required but this is a separate question.

It might be as well to discuss the matter with Mr. MacDougall when he arrives. As the same problem arises in Malaya it might be as well to have a preliminary discussion on the matter within the Eastern Department.

Bloeme

8/7.

I have discussed with Mr. Palmer and agree that it would

be difficult to revert at once to the system of expenditure until at least the Estimates have been approved. The date April 1st, 1947, has been suggested therefore as a possibly appropriate date for the termination of the war period. It should be noted, however, that in his memorandum behind (1) Mr. Strickland seems to engisage a retrospective date namely 1st May or 1st June, 1946.

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