Tel. No.: Whitehall 1234.
NATIONAL
Your Reference...
54126/5/47
Treasury Reference
IF.16/10/02
23 XAV 1947
Dear Pamer,
C. O. REQ
166
TREASURY CHAMBERS,
GREAT GEORGE STREET,
122
LONDON, S.W.1.
20th November, 1947.
(5)
ease refer to your letter of 7th September about the arrangements to be followed for the exercise of Treasury control over the finances of Hong Kong. You are of course correct in your surmise that we think it desirable to exercise a considerable degree of control over Hong Kong's finances in the present circumstances, particularly since, as you know, Hong Kong is turning to H.. G. for assistance in connection with certain services.
The chief difficulty in our view is that Hong Kong does not appear fully to appreciate its financial position. That is to say, proposals are reaching us for which we have found it difficult to justify. Further, while Hong Kong's revenues are bouyant, there are not yet grounds for thinking revenues will be sufficient to meet all Hong Kong's expenditure, other than that it may be met from loan funds, over the next few years. It is therefore most important that we should have sight as soon as possible of the 5 year forecast for which you have asked. I hope that you will do your best to persuade Hong Kong to submit this as soon as possible.
3
I
In the meantime we are prepared to agree that for 1947/48 and until further notice, Treasury control shall take the form suggested in paragraph 4 of your letter of 2nd September. must confess that we have quite some doubts as to the limits proposed in B (1) and (2) of that paragraph, but after fall consideration we have come to the conclusion that Hong Kong should be encouraged to stand on its own feet, as far as that is possible within the framework of Treasury control, and we are accordingly ready to accept your proposals.
H. Palmer, Esq.,
Colonial Office.
/At the
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