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certain projects which may be more aptly described as development than rehabilitation. You will appreciate that the proposals which have been made on Hong Kong's behalf for U.K. assistance in special cases (e.. Hong Kong University lose some of their force when it appears that funds could be found for them by the diversion of loan monies from development projects which could be met from the Colony's C. D. allocation.
6.
In the circumstances you will understand that we cannot accept your suggestion that approval of the Estimates now before us, should be without prejudice to the decision on the question of C.D. W. expenditure in Hong Kong. I should be grateful if you would con- firm that the position (as long as Hong Kong remains Treasury controlled, has been made clear to the Governor.
I have written to you separately about the form of the future Treasury control of Hong Kong. In that letter I refer to the position of the Schedule of special expenditure, vis-a-vis the formal estimates. I trust that this point also will be brought to the attention of the local authorities.
Yours sincerely,
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