CO129-615-7 Crown Lands 7-7-1946 - 25-9-1947 — Page 6

see Miss Whyte's min.

of 27.

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Miss Ruston

As you know Mr. Crutchley is on sick leave and I have therefore not been able to draw on his advice which I should have liked as I am practically entirely new to these land questions.

I assume, however, that Mr. Mayle is anxious to prevent speculation in leases (No.1 on this file is loosely worded but I am certain that there are no freehold disposals of Crown Land in Hong Kong and that what is put up to auction is a lease for a period of years. I felt, like you, that a complete freezing of leases would retard development schemes, but I thought it well to consult Mr. Caine who of course has personal knowledge of these problems from his Hong Kong service. He was also opposed to any restrictive covenant of the kind suggested by Mr. Mayle, but for slightly different reasons. He pointed out that the object of putting leases up to auction was to ensure the maximum financial return to Government and that by disposing of them by private treaty Government had made a concession which involved them in some loss of revenue. If restrictive covenants were then attached to leases their value would drop further and the financial return would be still lower, and Mr. Caine did not feel that the circumstances in Hong Kong justified a further loss of revenue. There was of course a risk that the holder of the lease might sell it again at a higher price and that it might be in the interest of the Government to secure some part of that higher price. Mr. Caine felt, however, that this should be done by the introduction of a duty on incremental land values.

I hope that these comments will be of some assistance to Eastern Department in considering the question.

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Ma Marke

15

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Sorry

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ever

28th August. 1946

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alriver

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معاد

28

7