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SAVINGRAM
To the Secretary of State for the Colonies.
From the Governor, Hong Kong.
Date
No.
41
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compensation due should clearly be regarded as part of the general cost of the war, and not be a charge against this Colony.
It is understood that these points were made by Unofficial Members when they discussed the matter with Mr. Rees-Williams during his recent visit.
8.
This Government has no desire to evade its proner responsibilities in making a contribution towards the cost of reinforcements according to its means, but I am still of oninion that we must know how we stand, at least as far as any claims are concerned which constitute a legal liability, before we can enter into any commitment on the question of the cost of reinforcements. I do not favour the 'auggestion that this Government should meet the cost of certain specific services, but consider that the contribution scould be calculated on a formula which wold take into consideration the amount expended by this Government on internal security generally, and also the posibility that the scale of reinforcement may be
radually reduced.
9.
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There is also the point as to what the actual cost of be reinforcement of the Hong Kong Garrison amounts to. The troops themselves. would be employed elsewhere ir their services were not required in Hong Kong; so the only difference in cost as regards their pay is the difference in the local overseas allowance ayable in Hong K, and in the part of the world where they would otherwise have been stationed. Then tre is the cost of transport to Hong Kom, but not the full cost as sore its wo have in any event ena red station. 'he cost of no istruction of camps. military roads, et:., is all peculiar to the Hong Kong situation, but the cost of roads has largely beat met from Colonial mus, firstl" from the rovision of one million collars under Head 31, Publicorks Extraordinary, Sub-head 1,"Roads and Paths, Hew Territories", and latterly as a result of your pro osal that expenditure by the Public Works Department on works car ied it for the Military Authorities should rest were 1% lier. Moreover,
it must me remembered tat
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there is an Imperiul interest ac well μs a local interest, in the defeure of Hong Koʻm, in that it is a necessary step in the general policy of preventing the spread of Communism throughout South ast Asia.
10.
The win point at insue seems to be the mercentare of its income which it is reasonable for a Colonial Government to devote to defence und inter al security. It has o proved possible from the inferation available locall to Determine what is the percentage of such exne...niture in vne United Kingdom. It is believed that expenditure on the armed forces and on Police services met from central Government funds is in the region of 20 per cent of the total United Kin, com expenditure even in
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