100
Encl. No. 3
Extracted from SOUTH CHINA MORNING POST,
3/6/48.
COST OF WAR
Colony's Gesture
IMPERIAL GOVT'S OFFER ACCEPTED
CONTROL TO END
The Legislative Council yes- terday accepted on the Colony's behalf the offer of the Imperial Government in settlement of the question of responsibility for Hongkong's war costs.
Unofficial speakers emphasised that the offer was the least that was expected. They accepted it to convey a gesture of sympathy and aid to Britain in her difficulties.
The Colonial Secretary disclosed that the Secretary of State favours in principle relaxation of Treasury control of Hongkong's finances.
Mr Landale moved:
(1) That having regard to the .financial difficulties with which the United Kingdom is still faced as a result of losses incurred during the war, and having regard to the heavy burden which the United Kingdom taxpayer is called upon to bear, this Council, on behalf of the Colony, accepts the proposals contained His Majesty's Government an- nouncement of the 27th April, 1948, which this Council regards as re- presenting a great effort and a very real proof of sympathy and good- will of His Majesty's Government towards the Colony.
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(2) That this Council respect- fully requests His Excellency, the President, to acquaint the Secretary of State with the above resolution and at the same time to make the necessary representations to him with a view to:-
(a) The immediate termination of Treasury control over the Colony: and
(b) Ensuring the speedy exam- ination and decision on the part of the Services concerned in respect of the 'denial' claims.
The mover stated:
In rising to move the motion standing in my name on the Order Paper, I do so not so much on the merits of the terms offered by His Majesty's Government but because my Unofficial Colleagues and I be- lieve there is considerable desire locally to assist the Home Govern- ment in their present financial dif- ficulties, and it is solely for this reason that we do not wish to press for what might crudely be expressed as our "pound of flesh."
Frankly, Sir, the
terms offered · are in our opinion the least that we were entitled to expect.
Minimum Expectation
As to His Majesty's Government's decision not to ask us to pay any, contribution towards the cost of the Military Administration, I need hardly elaborate on my reasons for saying that this decision is one which the Colony had every right to ex- pect; more particularly in view of the frequent statements made by responsible Ministers of the Crown during the war "that the cost of the war, as far as the Colonial Empire was concerned would not lie where it fell." And further, as regards His Majesty's Government's decision to treat as a free grant advances made before and after the establishment' of Civil Government, amounting to three and a quarter million pounds, I consider that such advances fall within the same category as the cost of the Military Administration.
And again, as to His Majesty's Government's further offer of £1,- 000,000 as a free grant to assist the Colony in resolving the problems arising out of expenditure connected with the war, it seems clear from Government's replies to my hon. friend Mr d'Almada's questions that the whole of this sum and more will be absorbed by expenditure arising out of the war, and accordingly I consider that this sum too falls within the same category as the other two items.
On the other hand, it is also clear that the Colony's finances, with the help given by His Majesty's Govern- 'ment, will be able to meet the addi- tional items of expenditure which this Government will be called upon to bear and which are given in the answers to my hon. friend, Mrj d'Almada.
No Mean Contribution
In view of the desire, to which 1 have already referred, to seek ways! and means whereby Hongkong can help the United Kingdom in her present troubles, it has occurred to my Unofficial Colleagues and to me that, by accepting the offer which under the circumstances we regard as representing a very great effort and a real proof of sympathy and goodwill on the part of His Majesty's Government towards the Colony, and not pressing for a fuller settlement, we are in fact making no mean con- tribution towards alleviating the home country's difficulties.
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I would hate my remarks to be inter- preted as being ungrateful, but it must be borne in mind that. in addition to the sums set out in the answers to my hon. friend Mr d'Almada's questions, there will be the added burden of re- habilitating Government buildings and installations, and constructing new ones to replace those destroyed-all as a re- sult of the war. This burden will fall directly on this Government and is es- timated to cost, I reckon, something of the order of $150,000,000.
As to the second half of my motion, Item (a), this is a natural corollary to the first half; No grown-up member of a family likes being tied too tightly to its mother's apron strings. While I ad-. mit that should such a member of & family start sowing an undue amount of wild oats, the parent has to bring its influence to bear in putting matters right. Before the war the Colony had reached the age of discretion and had achieved a certain degree of financial autonomy, but as a result of the war-not I might add of sowing wild oats our finances deteriorated. However, during the two:
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