CO129-624-11 Finances- financial settlement 1-1-1950 - 30-6-1950 — Page 40

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5.

to create a specially favoured category of claims, would give rise to extremely awkward repercussions.

(iii) Claimanto nevertheless may, in certain cases ani in spite of

difficulties inherent in the circumstances existing at the time and of the absence of complete records, be able to establish logal claims against Government under the local Defence (Compensation) Regulations.

(iv) In cases where such legal claims are established, liability must

be accepted by the Hong Kong Government.

I am aware that there is a strong feeling in certain quarters in Hong Kong that the moral liability rests with His (kjesty's Coveriment, even though the legal liability may rost with the Hong Kong Coverment. I feel, however, that there are other factors to be talsen into consideration besides those to which weight has been gåven locally. I regard it as important to distinguish between myal liability for the fact that the damage occurred and the general moral responsibility of Coverment when losses have been incurred in its own territory by its own taxpayers to decide the extent to which it is proper that compensation should be paid to assist rehabilitation. as regarde the moral responsibility for the farat that the dacage cocurred, in my view, which I am confident that you will share, this does not rest «ither with His Majesty's Government or with the Hong Kong Governant, even though the damage was dons by United Lingiom British or by citizens of rong kong, but with Japan. As regards the second point, you have already reached a conclusion in deciding not to have an ex gratia war Damage Compensation Tchesto,

6.

I consider, therefore, that this is a somewhat fortuitous legal liability arising from circumstances which were unfortunately not envisaged at the the when the legislation was passed. In this connection I must refer to the free

rent of £1,000,000 which was given to Hong Zong by Mis "ajesty's Government "to assist the Government of Bong Kong in resolving problems arising out of exşendi ture connected ith the waLL", At the time when the financial settlesnt between }âs ¡jesty's Governant and Hong Kong Government was reached there was a misuzõerstanding in Hong rung on the point whether the liability now under consideration was included as one of the items of Lenditure commected with

the war" (nee yur telegrams 30s, 406 and 426 of the 22nd and 27th April, 198).

7.

Consideration of whether His jajesty's Goverment would be prepared to give further assistense in this matter would depend partly on the actual size and existance of the financial cost, and would, therefore, be difficult to take further until the actual cost of liability is known; that is until the problem has finally been disposed of on the linos mygested in paragrah 4 above. It is considered improbable that all claimants will be able to prove their caso, and it would be necessary to take into consideration the fact that, owing to the decision of the Hong Kong

rernant not to hare the por kiska Insurance Scheme or a general ez gratia dar Damage Compensation Scheme, the sun involved, whatever it mky turn out to may represent the total liability of Hong kong for war damag compensation. The whole question of "donial" claims and of possible further assistance by Majesty's Government will of course be one of the matters for discussion at the forthcoming conference on outsta ding financial ismaes,

I have

he honour to be, sir,

Your most obedient

humble servant,

(Signed) J. GRIFFITHS.

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