CO129-624-11 Finances- financial settlement 1-1-1950 - 30-6-1950 — Page 55

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SAVINGRAM

To the Secretary of State for the Colonies.

From the Governor, Hong Kong.

Date

No.

-4-

50

but

this period of recurrent crises in all parts of the world, to this must be added expenditure on Police services met from the fnds of local authorities. In the case of a non-self-coveruin. Colony it is obviously reasonable that

Even in 1941 when the the percentage should be much lower. Empire was already at war, though this had not at that stage spread to the Pacific, expenditure on Police ard Defence Vorces in Hong Kong, includin: air raid precautiors, amounted

I observe that Sir to 15 per cent of the total expenditure. Henry Gurney, in paragraph 41 of Malava secret despatch of the 9th January, 1949, sigrested that this is the percentare of its revenue which Malaya mi ht reasonably be expected to devote to defence and internal security from its own resources durin n the present emergency. From figures "ucted in the same despatch it would annear' tunt te post-war figure in the case of a number of representative Colonies averaves just over 7 per cent.

11.

+

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o.1

I am not aware whether 3ir Hear?! Guruey's aurrested figure of 15 per cent was accepted, but for any

rofes S I Wa

one any ɔNG.. for the Hong Lɔng contribution to the cost of reinforcements on a fixed sum rather than a porcentare. Estimated revenue &

regr

48

expenditure for the current year both total approximately

180 millio, and I would suggest that a fire of 30 million, which represents 16.6 per cent would he appropriate. From this figure I would propose to deduct the amount act- ually spent from Colonial funds on defence and internal security during the year, but excluding Loan expenditure as home of this still represents the replacement of buildings destroyed during the war. Any balance would be palu over to His Majesty's Government, but if it should happen, a result of the proposal that Public Works expenditure incurred on behalf of the Mi ́itary should rest where it lis, that the local expenditure exceeded the figure of $30 million, as it may slightly during the present year, I consider it reasonable that His Majesty's Government should refund any excess. I feel that such an arrangement would be as generous as could reasonably be expected from a non- self-governing Colony with limited resources, especially when it is borne in mind that $30 million represents the whole of the pre-war revenue.

Loan

12.

I enclose a statement giving details of all

In some defence and security expenditure so far incurred. cases actual figures have been included, but in most cases the figures necessarily are only estimates. expenditure has been shown separately but is excluded for purposes of the proposed formula governing the contribution towards the cost of reinforcements. It will be observed that the total, of just under $32 million, includes sume totalling $470,000 which have been contributed to Service welfare funds and to committees concerned with the welfare and entertainment of the troops. Expenditure which would

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