CO129-624-14 Finances- relief stores- Hangover stores and Siamese free rice 1-7-1948 - 31-12-1951 — Page 104

PROPOSED FINANCIAL SETTLEMENT WITH HONG KONG

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Note of a meeting held at the Treasury at 3 p.m. on Thursday,

2nd March, 1950 to co-ordinate preliminary action of the issues likely to arise at the Conference.

1.

There were present:-

Mr. R.B. Moberly (in the chair)

Mr. D. J. Atherton

Mr. R. Marris

Mr. J.B. Sidebotham

Mr. H.T. Bourdillon

Mr. H. Palmer

Mr. J.C. Morgan

Mr. H.P. Hall

Mr. J.R. Williams

Mr. J. Fairclough

Mr. W.R. Darracott

Mr. G.R.R. East

Mr. J. Hosie

Mr. C.D. Allen

2.

The following general points emerged:-

Treasury

Colonial Office

Admiralty

War Office

Ministry of Defence

(a) In order to achieve a speedy settlement it is essential that the issues should be clarified and all fact-finding done, both here and in Hong Kong, before the arrival of the Financial Secretary of the Hong Kong Government which would be ɔn 19th April, or shortly thereafter.

(b) The object of the meeting was, therefore, to review the various issues likely to arise and to ensure that work on them was in train when necessary. A further meeting nearer the date would be necessary to ensure that action was completed and to consider more general issues.

(c) The Colonial Office felt that there should be no attempt at the second meeting to prejudge the result of the conference and that it would be fatal to confront the Financial Secretary with a fait accompli. The Treasury felt that we ought not to fall into the opposite fault of having points at issue between Departments during the Conference, but suggested that a solution of this point should be reached at the second meeting.

(a) The Colonial Office said that there should be no suggestion of bargaining with legitimate claims for a defence contribution.

The Treasury agreed that the word "bargaining" might be unfortunate, but said that it was Hong Kong that insisted on a clearance of these matters before headway could be made with the defence contribution.

(e) The Colonial Office thought that the Treasury argument about net cost of H. M.G's assistance, which might be used to justify retention of certain moneys owed by the British Red Cross which might be held to belong to Hong Kong, was two-edged and might cost us more than it was worth.

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