CO129-606-6 Hong Kong Loan- Financial settlement 7-3-1949 - 23-12-1949 — Page 27

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With the compliments of Sir Thomas Cash

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2nd December, 1949.

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Dear Sandford,

Our attention has been drawn to the answer given by your Secretary of State on the 16th November to a Parliamentary Question by Mr. Walter Fletcher on the subject of compensation for equipment requisitioned in Malaya and later destroyed in order to dany it to the enemy. According to Hansard, page 2009, Mr. Henderson said in the course of his answer that *All claims for equipment requisitioned for use by or applied to the Royal Air Force in Malaya have been or will be paid as soon as it has been possible to establish satisfactory proof of requisition or supply. This rule applies even where such equipment was later destroyed in order to deny it to the enemy."

This question of compensation for denial has been the subject of a mmber of inter-departmental conferences and a whole series of Parliamentary answers, in which we thought it was established that the Service Departments would not pay for equipment denied

This view was to the enemy, even it it had been requisitioned. confirmed in particular at a Treasury Conference held on 23rd May, 1949, at which the Air Ministry were represented. A subsequent despatch from the Colonial office to the High Commissioner for the Federation of Malaya (16234/62/49) of 30th May, 1949, generally followed the conclusion of the Conference and in doing so stated (in paragraph 5) that action involving compensation under the Malaya Regulations was the legal liability of the Malaya Government,

And to quote even though the action was taken by U.K. Forces,

one of a series of previous answers on the subject, the Minister of Defence said on 27th April, 1949, in reply to Commander Noble;- "The Service Departments do not accept liability for the payment of compensation in respect of goods requisitioned for denial to the enemy which are regarded as falling in the category of ordinary war damage losses. Claims in respect of such cases would be dealt with by the civil goverment ...............

Sir Folliott H. Sandford, K.B.E., C.M.G.

Air. Henderson's