CO129-606-5 Hong Kong Loan- Financial settlement 2-3-1948 - 4-10-1948 — Page 119

OUTWARD TELEGRAM

FROM THE SECRETARY OF STATE FOR THE COLONIES

54126/6/48

Cods

TO HONG KONG (Sir A. Grantham)

gent 25th May,

13.45 brs.

118

67

MOST IMMEDIATE

No, 589 Confidential,

1

Your telegram No. 487.

I bave the following comments to make on your proposed replies to the questions to be asked on 26th Key.

28

Ao

I agree as the grent was not intended to be related to any specifio liabilities,

30

B. and C. I am not, of course, oble to check the amounts in question. As regards particular items I am not aware of what is involved in item (h) repeat (b).

ન

the

Item (g) repeat (g) as it is in respect of craft referred to in peragraph 31 of your despatch No. 292 seems to be in a different category from the other items, in that it represents a debt for goode supplied, whereas items (a) to (2) represent expenditure for which the Government hoa received no direct retum, In other 06866 doubtless the Hong Kong Government in post-war conditions has had to purchase stores which are not entirely sultable for its requirements or at higher prices than normal and to that extent a certain part of the expenditure might be said to "spice out of the war". You may consider

therefore that this item does not strictly come within the terms of questione B and C,

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I assume the phrase "all remaining liabilitica” in the third sentence following the phrase "The positio6 regarding these liabilities is an fullows'

* should be all the liabilities referred to above",

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As regards item (1) and the sentence Deginning *So far as can be asen" 1 would refer to peregraphs 1 3 and 4 of my telegram No. 533. The extent to which the Hong Kong Government la legally liable to meet "denial claims whether there was prior requisitioning or not 18 primarily cae for the Hong Kong Government to decide, མ fear, however, that I cannot accept the wording in your fologram and since the Jervice Departments were concerned negotiatione are proceeding with those Departmenta with a view to their meeting those claime", That phrase goes far beyond the terme of paragraphe 3 and 4 of my telegram No. 533 and I must ask that in dealing with (1) you should adhere to the termo of those paragraphs.

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