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inactivity, and in their letter at No.7 on this file (in reply to No.5) they exhortus to read the Governor a regular lecture on the subject of the duty of Colonies to contribute towards their own development.
we are
3 Mr. Follows, the Hong Kong Financial Secretary, is now home on leave, and with his assistance
in the process of discussing Hong Kong's whole financial position with the Treasury. Development has naturally featured in these discussions, and the draft despatch now submitted jointly by the Hong Kong and Finance Departments is in its present form, the result of consultation with the Treasury and has their full agreement. It will be
seen that the draft makes the Treasury point about the true scope and purpose of Colonial Development, but in nothing like such a categorical form of the Treasury had originally wished. We have, in fact, persuaded the Treasury that their original attitude was somewhat excessive. In the first place, they attached too much importance to the Governor's remark that the Colony had no foreseeable means of supplementing C.D. & W. grants. This remark was made before the financial settlement between H.M.G. and Hong Kong, and it is plain from its context that it was made with the need for such a settlement very much in mind. In these circumstances the remark was little more than common prudence. It is true that the schemes so far submitted to us contain, as submitted, no element of local contribution, but here again it is clear from what Mr. Follows has told us that there has been substantial mis-understanding. The proposals have been described from time to time as "the first half of Hong Kong's Development Plan", but this description is inaccurate. The point
Indeed,
is that Hong Kong's Development Plan as such, including proposals for the expenditure of the balance of the C.D. & W. money, must await the production by Sir Patrick Abercrombie of the report on Hong Kong housing which he was commissioned to prepare in the latter part of last year (he seems to be taking an extraordinary long time about it?!). There is no reason to suppose that the Plan when it is finally produced, will not contain a substantial element of local contribution. what Mr. Follows has told us and what we can read in the current estimates (in circulation elsewhere) shows the contrary. Hong Kong is already expending local funds on development, and we can expect further proposals for local expenditure as part of the Development Plan proper when it is submitted. The now famous remark made by the Governor in October last, when he had no idea whether H.M.G. was going to render any assistance in the matter of a financial settlement, does not really contradict this. What we have received up to now is a series of interim proposals for the expenditure of that proportion of Hong Kong's C.D. & W. allocation which does not depend on Sir Patrick Abercrombie.
So much for misunderstandings about the intentions of the Hong Kong Government. We have
also/
(merely
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