CO129-596-7 Canton-Kowloon Railway 6-2-1948 - 25-8-1948 — Page 4

4

3475/19.

MR. WALLACE.

I have initialled the draft, as it seems to meet the case if you decide to refer to the Treasury before conveying approval to Hong Kong.

2. However, as the form of Treasury control over Hong Kong finances has, I believe, not yet been fixed, it might be argued, as Mr. Greig has done, that there is no need to refer to the Treasury.

3. On the other hand, the views of the Treasury on the question are well known. On 12/3/48, when I last saw Colonial Office file 54126/5 which deals with this matter, they appeared to be anxious for control more on the lines of Miscellaneous 460B than had been proposed to them (See No. 8 on the 1947 file). Under Miscellaneous 460B some at least of the transactions for which covering approval is now sought would have required Treasury approval, and if, therefore, it is decided to convey approval to Hong Kong without prior reference to the Treasury, it might be well to advise the Treasury of the action taken.

May I have a copy of the reply that is sent to the Governor?

A.

Mim Mag

reached

Director General

Of Colonial Audit.

29. 5. 1948.

A decision boat Try. Contire is living the

vey thinkty.

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