Colonial Office Ref. No. 54420/49. Secretariat Ref.
No.
2/2161/47.
Dup
en 54126
5417
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Development
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Fund
CONFIDENTIAL
GOVERNMENT HOUSE,
No. 8
HONG KONG,
27 January, 1951.
2
54420/49
54420/44
Enclosure No.1.
Enclosure No. 2.
sir,
I have the honour to refer to your despatch No.226 of the 27th September, 1949, on the subject of the financial operations and accounting methods of the Department of Supplies and Distribution. that despatch, together with copies of my despatch No. 48 of the 19th March, 1949, were laid before the Legislative Council on the 19th April, 1950.
Copies of
2. On the 3rd May, 1950, the Legislative Council passed a Resolution approving the financial and accounting arrangements of the Supplies and Distribution Department (which has since become the Supplies Branch of the Department of Commerce and Industry), and authorising an increase in the limit for the Japan Trade Suspense Account. I enclose he rewith the Hansard Report of the proceedings. As you are aware, this Account is now represented by a number of separate banking accounts, the sum of which represents the balance on the Suspense Account referred to, and I regret to inform you that in practice it has not been found possible to keep within the limit prescribed. I would remark, however, that although there is a large adverse balance at present in respect of this trade, it is financed by Japan, and interest is being earned by this Government on the local counterpart Account. As the main purpose of this despatch is to secure your approval of the adoption of the Accounts as prepared by Messrs. Lowe, Bingham and Matthews, and of the allocation of the profits which have accrued, I propose to address you separately in connection with the Japan Trade arrangements and the measures which might be taken to reduce the present adverse balance, when it is rather clearer how outstanding contracts and future trade are likely to be affected by the political situation. Meanwhile I believe it is clear that there need be no financial loss involved by this Government in liquidating the present position.
3. In your despatch No.226 you indicated your intention of accepting a certificate from Messrs. Lowe, Bingham and Matthews as to the accuracy of the Accounts prepared by them, and asked for those accounts to be referred to you as soon as they were completed.
I now enclose a copy of the Accounts and the Report as presented by the Accountants, Messrs. Lowe, Bingham and Matthews. I should explain that the Accountants presented a preliminary report on the 17th September 1950, from which it was possible to gauge the extent to which the Accountants required further information on various aspects of the complicated matters covered by the Accounts. It was also possible then to give
THE RIGHT HONOURABLE
JAMES GRIFFITHS, M.P.
2- FEB 1951
034
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