327/47c.
No. 31.
SECRET.
GOVERNMENT HOUSE,
HONG
KONG.
12th August 1948.
+12
sir,
I have the honour to refer to the arrangements referred to in paragraph 4 of your Secret telegram No. 533, as the result of which Mr. D.-. Allen, the local representative of the Ministry of ransport, was directed to investigate on behalf of the Services claims in respect of the requisitioning and denial or vessels in 141, with a view to ascertaining the total potential liability and its apportionment as between tuls Government and the Services.
2.
You
In consultation with local Service ropresentatives and y advisers, r. Allen recently com leted his investigations and prepared a report, dated the 1st. July, which he transatted to the Ministry of Transport from whom I assume you will by now have received a copy • will know, therefore, that the main recomendation wade by Mr. Allen 16 that the total losses should be shared in the following proportions; this Government 35,, the Admiralty 35, the war Office 25,, and the Air Ministry 5,..
3.
While it is gratifying to note that these proposals represent a substantial concession to the views put forward by this Government, I must still urge that the whole cost of these "Denial" claims should be the responsibility of the Service departments. The circumstances in which they arose have been set forth in Mr. Allen's report; I do not propose to enlarge on these in any detail, but the conclusion that is inevitably forced upon one arter a perusal of the report is that it is clear that the action taken by this Government and by the various Service departments in sinking
any craft was dictated, not by the requirements of local defence, for it was then clear that the Colony was doomed, but by the earnest desire to afford the maximum assistance to His Majesty's Government in the long term prosecution of the war. The purely selfish interests of the Colony were subordinated to Imperial interests, and public opinion here generally regards with profound disap roval the suggestion that the Colony should bear any part of the cost of this particular war claim. That this feeling has not been more vocal has been due to the realisation that the attitude of His Majesty's Government had at least been modified to the extent of giving consideration to the question of liability. If the Colony is required to bear even 35% of the cost, the public, in view of its sympathy with Britain's present plight which was expressed in the Legislative Council debate of the 2nd. June last, may be induced to accept the settlement, but I feel bound to emphasize that the impression that will remain will be a lasting one, which may have the most unfortunate results in any future emerge cy, particularly in view of the settled policy or ranting increased representation to unofficial interests in the government of the Colony.
THE RIGHT HONOURABLE
RECEIVED
ART UR CREECH JONES, .P. 26 AUG 1948
4. Pending/.
C. O. REGY.
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