CO129-606-3 Treasury control over Hong Kong finances 14-1-1949 - 1-12-1949 — Page 33

from Secret

Secret Letter Of 19-1-49

Extract from

from Mr. Paskin to Mr. Sidebotham.

32

14/1/49

9.

When I met the Unofficial Members on Friday afternoon (1.e. Unofficial Members of both Executive Council and Legislative Council) the first matter on which I was heavily tackled from all sides (it was in fact a unanimous onslaught) was their feeling that very much too much has to be referred Home for decision. In the main, they were particularly resentful about the necessity of referring Home many financial matters on which they felt that the y in Hong Kong were in a very much better position to form correct opinions than we (and especially the Treasury) can do in London, and they also resent what they regard as the

inordinate delays in coming to a decision.

(a)

10. When I asked them to give me examples of the kind of thing which they have in mind they mentioned the following:

The length of time it took to get final decisions on the Salaries Commission Report. (Here I should perhaps mention that there were no Officials present at this meeting. The only people there were myself and the Unofficial Members). On this issue they represented to me very strongly the hardships under which officials had been labouring and the, to them, unfortunate effects of such a long delay in getting decisions from the C.0.

(b)

(0)

(a)

They could not at all understand why (it having been agreed that there should be periodical reviews of the c.o.l. allowances) the determination of the new rates could not be left to the Hong Kong Government, who alone are in a position to judge what is necessary.

Local Loans. The line here was that it is only in Hong Kong that there is the knowledge of the rates of interest which it is necessary to pay, and of the psycholoich the loan should be put on the market. It was very strongly represented to me that the delay in getting final agreement on the loan which was raised last year meant that the market was missed by a matter of 7 months, and that the effect was that Hong Kong lost heavily.

On

I

Currency Fund. They could not at all understand why Hong Kong is not allowed to "reborrow" the money which they have deposited in London. this issue the discussion became so highly technical that it was completely over my head. gethered however that there had been despatches about it (though I have not yet had an opportunity of asking Follows if this is so) so it would have been clearly unprofitable to pursue the matter further at the meeting, though of course I said that I would mention it et Home.