CO129-606-5 Hong Kong Loan- Financial settlement 2-3-1948 - 4-10-1948 — Page 194

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OUTWARD TELEGRAM

Tak = KC Plaže však bolani A

S4126/6/48

Cypher (0.7.F.)

TO HONG KONG (Sir A.Grentham)

FROM S of S., COLONIES.

S.of

Sent 16th April, 1948.

18.00 hrs.

6/11

193

IMMEDIATE

No.456 Secret

Anid (25)

Addressed Governor, Hong Kong.

Repeated Secretary-General, Singapore, No.299.

High Commissioner, Federation of

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Malaya, No.492.

Governor, Singapore, No.456 (Secretary

General please pass).

Governor, North Borneo, No.160. Governor, Baravak,

No.119.

The

1. Consideration of proposals in your despatch No.292 has now been completed. H.M.G.accept for the reasons given in your despatch No. 281, your recommendation, following the report of the War Damage Commission, that no compensation should be paid for war damage in Hong Kong, question of H. M.G. providing any assistance towards a war compenzation scheme for Hong Kong under the declaration of October, 1942 (see paragraph 2 of my telegram to Secretary General, Singapore No-301 repeated to you as No.457) does not therefore arise,

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H.M.G.are however anxious to give practical assistance to Hong Kong as evidence of good-will and of ther: belief in the Colony's future. The extent of such sasietance must of course be determined on the one hand by H.M.G's ability to help in the light of conditions in the United Kingdom following the crippling var losses suffered United Kingdom Government and the extremely heavy burden of taxation falling upon United Kingdom taxpayer, and on the other by the rapid recovery and present prosperity of Hong Kong-

E.M.G. are accordingly prepared to agree to a Financial settlement ee set out in paragraph 3 below which would in their view be a reasonable and indeed a generous one:

3a

The settlement would be as follows:-

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(a) In the first place H.M.0, will not seck any contribution from Hong Kong towards the cost of the military administration:

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(b) H.M.Q.will treat as free grants the advances made prior to and after the establishment of civil government in Hong Kong, amounting to £3,250,000 in all, except insofar as that sum has been used for the purchase of stores for re-sale which has resulted in' cash receipts by the Hong Kong Government.

. (c)