CO129-606-5 Hong Kong Loan- Financial settlement 2-3-1948 - 4-10-1948 — Page 77

a contention, as not only was it considered

that such liabilities should be met by

the territory concerned, but moreover to

have accepted such liabilities in Hong Kong

would have forced H. M. G. to accept similar

liabilities in Malaya, Borneo and other

theatres of war. It was impossible for

H.M.G. to contemplate accepting such a

situation. Nevertheless, in order to

assist Hong Kong, in view of the political factors involved, H.M.G. made a free grant

of £1,000,000 to assist the Colony in

resolving problems connected with the war.

It was necessary to word the offer in that

form to avoid H.M. G. having to give similar

assistance to other Far Eastern Colonial

Governments. The grant was related to all

the various liabilities referred to in your

despatch although owing to most unfortunate

delay in decoding your telegram No. 406 there

was a misunderstanding in Hong Kong on the

matter when the financial settlement was

but o]

in

70

at first accepted. Our telegram. No. 533

set out H.M.G.'s position in this matter. and your telegram No. 526 stated that the

Legislative Council accepted terms of the

settlement (which of course included other

matters beside the above grant of £1,000,000) as representing a great effort on the part

of H.M.G. At the same time you were requested

to take up with the Secretary of State the

termination of Treasury control (this point has now any been settled) and a speedy

examination of denial claims. To that end

NO.

the procedure referred to in our telegram No. 533 was set in motion and the position on this

/matter

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