CO129-606-5 Hong Kong Loan- Financial settlement 2-3-1948 - 4-10-1948 — Page 111

54 26/6/48

Code

OUTWARD TELEGRAM

TO HONG KONG (Sir A. Grantham)

FROM S. OF S... COLONIES.

Sent 1st June, 1948.

MOST IMMEDIATE

16.00 hrs.

110

71

No. 611 Confidential.

1.

Your telegram No. 526.

I agree that you should not oppose the motion.

2. As regards 2 (a), you may say that you have my agreement in principle to relaxation of Treasury control, I propose that, as a first step, there should be a general review of Hong Kong's financial policy, prospects and administrative arrangements, in which I suggest Follows should participate. In light of this review former Treasury control would cease, and in its place would be substituted arrangement of which following are principal features:-

for:-

(i)

Secretary of State's approval will be required.

(a) annual estimates;

(b) additional expenditure not provided in estimates involving items of capital expenditure exceeding one million dollars or recurrent expenditure exceeding 250 thousand dollars per annum under each individual head;

(c) new posts as provided pre-war in Cólonial

Regulation 267;

(d) expenditure involving important points of principle, e.g. changes in salary structure,

(ii) Secretary of State to be kept fully informed monthly of the general trend of the Colony's financial position.

On all these points Secretary of State will, of course, consult H.M. Treasury as he may consider necessary.

3. Full details will be given in a following telegram, but above should, I think, auffice for purposes of your statement,

Copy sent to:-

Treasury

Mr. D.R. Serpell, 0.B.E.