been met by the United Kingdom Departments, mus✪ presumably rest on the Hong Kong
Government;
but that raises the question
41
of the extent to which the United Kingdom Service Department should be asked to contribute towards the expenditure involved. Allen in his report paragraph 5(e) suggests as a basig that the Hong Kong Government should bear 35 and the United Kingdom Service Departments $5%. The Service Departments would, I imagine, be against making contributions on that basis. Nevertheless, if we take the maximum amount of the claime as $25 million - see paragraph 5(a) Or say £1 million, then we must consider to what extent Hong Kong has already reseived any assistanc towards meeting this type of claim from His Majesty Government in the form of the free grant of £1 million. That grant was not specifically related to any particular liabilities, but was intended to assist the Hong Kong Government in dealing with man items of expenditure which that Government con- sidered as morally the responsibility of
His Majesty's Government. In my letter to Serpell of the 2nd March 1948 I enclosed a schedule of the various liabilities which the Hong Kong Government considered should rest on His Majesty's Government amounting in total to £5 millions which included £l1⁄2 millions in respect of denial claims. In fact, the Treasury at first
did not agree to give any assistance in respect of that total of £5 millions, but eventually a grant of £1 million was agreed to at the last momen owing to the Governor's strong representations regarding the first item - (a) volunteers etc. amounting to £1,007,000 (see his telegram No.402 of 21st April, 1948) The Governor would
thus have good justification for claiming that
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