copy.
CONFIDENTIAL.
Sir,
HONG KONG,
Encl. 1.
96
27th. May, 1948.
My Unofficial colleagues on the Legisktive Council and I would like to let you know our position in regard to the amouncement made in Parliament by the Secretary of State for the Colonies on the 27th of April, 1948.
2.
In the light of Government's replies to Hon. Mr. D'Almada e Castro's questions,we cannot regard the proposals announced in that statement as satisfactory to the Colony.
3. As regards H. M. G. 's decision not to seek any contribution from Hong Kong towards the cost of the Military Administration, we need hardly elaborate our reasons for saying that this decision is one which the Colony has every right to expect in view of the circumstances.
4. As regards H. M. G. 's decision to treat as a free grant advances made before and after the establishment of the Civil Government in Hong Kong amounting to £3,250,000, we consider that such advances fall within the same category as the cost of the Military Administration, since these advances relate to expenditure arising out of the war and for which, in our view, this Colony as a mere unit of the British Empire should not be made responsible.
5. As to the further "free grant of sterling one million pounds to assist the Colony in resolving problems arising out of expenditure connected with the War", it would seem clear from Government's replies to Hon. D'Almada's questions that the whole of this sum will be absorbed by expenditure directly arising out of the war and accordingly we consider that this sum, too, falls within the same category as the other two items mentioned above.
6.
The net result of a settlement on the basis of these proposals is that, in addition to the burden of rehabilitating Government buildings and installations, the construction of new ones to replace those destroyed as the result of the war and the re-equipment of all Goverment Services estimated to cost some HK 180,000,000, the Colony will assume a liability for items (a) to (i) of expenditure set out in Government's answers and totalling the sum of $72,730,000, including item (i) Claims in respect of requisitioned material of $25,000,000.
7.
-
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Disregarding item (i) which may be the subject of reimbursement by the Services concerned, this total is reduced to $47,730,000.
8.
Deducting from this last total the two credit items of $12,000,000
- representing H. M.G. 's waiver of repayment of the £750,000 advance and $16,000,000 representing the "free gift" of £1,000,000 - the net
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remaining liability of the Colony is % 19,730,000.
9. In our view all the items (a) to (i) of expenditure should properly be the responsibility of H. M.G. and, as regards the item (i), which part thereof should fall on which Service of H. M. G. is entirely a matter between H.M. G. and the Service concerned. Any other view must be contrary to the whole conception of the responsibility of H.M.G. towards one of its Colonies which was overrun by the enemy in war where its Govern ment ceased to exist during the enemy occupation, and when all its assets outside its territories were utilised on its behalf for payments arising out of the war.
10.
Our immediate reaction to H. M.G.'s announcement referred to above was unfavourable to any settlement on the basis of the proposals contained therein, and we felt it right to inform you of our reaction.
No comments yet.
Private notes are available after approval.