101
years since the war I submit that we' have proved that we are capable of being re-instated to that same degree of finan- cial autonomy that we enjoyed before the war; and it is the sincere hope of all my Unofficial Colleagues that our re- quest will be acceded to.
I now have much pleasure in moving the motion standing in my name on the Order Paper.
Seconder's Agreement
Hon. T. N. Chau: I beg to second the motion. My hon. friend having so well and exhaustively dealt with the various points raised in his motion that there remains practically nothing further which I can usefully add to his remarks. It can truly be said that by accepting His Majesty's Government's terms and not pressing for a fuller settlement, this Colony is really doing its very best to assist the Home Government in their present financial difficulties, and we sin- cerely hope that His Majesty's Govern- ment will appreciate our gesture and accede to our requests contained in the motion now before Council.
Money and Sentiment
Hon. M. K. Lo said:
Sir, In the ordinary course of events I should be content to let my vote on the resolution now before this Council to indicate my sentiments on this mat- ter. Having regard, however, to the views which I expressed in this Council on the 27th March, 1947, and in the last Budget Debate, regarding War expendi- ture, I feel that it is due to this Council that I should say a word to-day in ex- planation of my apparent change of attitude.
Sir, on the issue as to whether War expenditure as set out in items (a) to (i) in Government's reply to my honour- able friend Mr d'Almada's questions on the 26th May, 1947, is properly the liability of Hongkong Government, my views have not changed. The Chinese attitude towards such an item as (b) (Repatriation passages for non-officials) remains the same.
But to-day we are not concerned only with the financial incidence of any par- ticular War expenditure, but rather with the much more general question of a broad settlement of War expenditure as between Hongkong and His Majesty's Government. And the question before this Council is whether the proposals contained in His Majesty's Government's official announcement afford a reasonable basis for such an overall settlement. On such a question I feel quite sure that although dollars and cents must have their say in this mundane world, senti- ments cannot altogether be excluded from our consideration.
Personally, I have been very much impressed by the final paragraph of His Majesty's Government's statement, which is as follows:
"Having regard to the financial dif- ficulties with which the United Kingdom is itself faced as a result of losses in- curred during the war, and having re- gard to the heavy burden which the United Kingdom taxpayer is called upon to bear, the above proposals represent a great effort and a very real proof of sympathy and goodwill.”
in
Britain's Plight
Had the circumstances been different the United Kingdom, the Colony could reasonably expect, and would un- doubtedly have received, more favour- able financial proposals. But we cannot forget that, three years after the con- clusion of a world war in which the United Kingdom took such a vital part in making possible, and in bringing about, final victory, her people are still on a war austerity basis of living and have to fight for her economic survival. The following is part of a Reuter's message which I read in the South China Morning Post of May 26th:
"Mr R. G. Casey, wartime British Minister Resident in the Middle East and President of the Australian Liberal Party, told a Liberal Party Empire Day rally to-night that 'Britain's people are now hungry and ill-clad and are suffering austerity measures Australians have not yet realised.'
the
"There should be written up on every wall in the land: 'What can we do to help Britain?' Mr Casey declared." Again, had the circumstances in Colony been different, we might not be in a position to accept the proposals, however much we wished so to do. Happily an acceptance of His Majesty's Government's proposals presents no serious financial difficulties to the Colony. Excluding item (i) (Claims in respect of requisitioned material) such acceptance merely means that our surplus for. 1947-1948 of $30,000,000 will be reduced to approximately $10,000,000, and even if item (i) should result in an actual liability of the Colony to the full amount
a contingency which, in the light of what actually occurred is frankly un- thinkable to me-we would only have to meet a deficit of another $15,000,000.
in
Sir, I can think of no better method of showing the Colony's sympathy with her financial the United Kingdom
accept stress than for this Colony to the proposals of His Majesty's Govern- ment in the spirit in which they were made, without argument or bickering.
Government Reply
The Colonial Secretary (the Hon. D. M. MacDougall) said: Government sup- ports this motion. With reference to the issue of Treasury control in paragraph 2 (a) of the motion, it may be of interest to Members to know that a few hours before this meeting was convened we had a communication from the Secretary of State indicating that he favours in principle relaxation of Treasury control; measures to achieve that end are now in hand.
The motion was unanimously carried.
War Supplies Board
Claims made against the War Supplies Board fell into three main categories, the Financial Secretary (the Hon. A. G. Clarke) stated yesterday, in reply to a supplementary question standing in the name of the Hon. D. F. Landale arising out of the question asked by the Hon. Leo d'Almada, KC, at the meeting held on May 26.
Mr Landale's supplementary question was: Arising from the answers given to question 3, I notice the items set out made no reference to the claims against the War Supplies Board. Will Govern- ment state what the position is about these claims?
The Financial Secretary replied: Consequent on the cutting of the Me- diterranean route in the summer of 1940, an Eastern Group Supply Council was set up in India to devise methods and
the large means of supplying
British Forces east of Suez with their require- ments from Far Eastern countries as far as practicable, in order to save shipping round the Cape.
Hongkong's industries presented the possibility of securing a variety of dif- ferent types of goods needed for the forces, and to facilitate His Majesty's Government in making the fullest use of these sources the Hongkong Govern- ment in 1940 was asked to set up the War Supplies Board to act as agent for the Eastern Group Supply Council and for other Government organizations which might require supplies from local sources. The War Supplies Board operated with funds advanced by this Government.
Briefly the claims made against the Board fall into three main categories: (A) Goods actually shipped or
de- livered to a godown against orders placed by the War Supplies Board in its cap- acity as agent for the purchaser.
(B) Goods ordered which were in course of manufacture but were not de- livered at the outbreak of hostilities.
(C) Advances made by War Supplies Board contractors to manufacturers to finance the manufacture of War Supplies ordered on behalf of the various pur- chasers,
Legally Enforceable Only category "A" claims are legally enforceable, as under the terms of the standard War Supplies Board contract there could be no liability until shipment had been effected or delivery had been made to a godown, Government's view
on
is that the legal liability in this category lies with the purchaser, but in that Gov- ernment had incurred a moral respon- sibility by the fact of its having been responsible for setting up the War Sup- lies Board, it agreed to forward category "A" claims to the purchasers and to press for payment
behalf of the claimants. In actual fact out of the total of $1,495,100.73 for such claims, $170,074.97 has not yet been
only recovered : from
purchasers. Government is not prepared to meet any claim out of public funds in view especially of the fact that it is also in the position of a claimant in respect of the disbursement of its monies advanced to the Board.
With claims under category "B" and "C" no legal liability exists but there may be a valid claim against reparations, The whole situation has been placed before the Secretary of State for the Colonies.
Apart from these contractors' claims there is a number of claims against the War Supplies Board in respect of trans- port material which was urgently re- quired for the Middle East Campaign in 1941, and which the War Supplies Board secured locally and shipped on behalf of the Middle East Command. Certain of these claims have been settled by the War Office, and others are still under consideration. This Government is one of the unsatisfied claimants.
Exhet teken
50 54126/5/45
(Try. Coware)
28/6
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