CO129-606-1 Treasury control over Hong Kong finances 28-9-1944 - 23-12-1947 — Page 24

Ory, a

Your Ref: 54126/1/46

4

TREASURY CHAMBERS,

Great George Street, London, S.W.1.

Treasury Ref: S.50169/04.

12th December, 1946.

Dear Palmer,

Please refer to your letter of 8th October relating to the Hong Kong Estimates.

that my reply has been delayed.

I am sorry

I agree that the provision made under the various heads (with the exception of personal emoluments) must at this stage be considered rather in the nature of intelligent guesses than as firm figures. This fact does, however, make the application of adequate qualifications to spending by Hong Kong all the more important.

With regard to the "approval" of the Estimates by the Secretary of State, I agree with (a) and (b) of the assumptions which you suggest. I have already asked for more information about the bases of the "cost-of-living" and "rehabilitation" allowances which in the lower grades at least, continue to represent a more substantial proportion of personal emoluments than basic pay even when basic salaries have been revised. This is an element of personal emolument expenditure that needs to be most carefully watched.

Following our practice in Sarawak and North Borneo, I should be grateful if you would define to Hong Kong what is meant by a 'Major new commitment'. Perhaps the same levels (taking into account the exchange differences) might be applied both for recurrent and non-recurrent expenditure.

H. Palmer, Esq.

Colonial Office.

fice.

Yours sincerely,

(SGD) D.R.SERPELL.