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The argument is advanced that H.M. G. should pay for the cost of replacing the Colony's war destroyed craft which I take to mean Hong Kong Government craft destroyed by the enemy or scuttled to deny them to the enemy.
There may well be strong grounds for doing this in the light of the respective economies of the U.K. and the Colony, but that is a matter upon which we are unable to comment other than that it would seem from the Governor's confidential telegram No. 487 of the 20th May 1948 that he was satisfied that with 148 the free gift of £1,000,000 the Colony could meet outstanding
liabilities out of revenue, including 3 million provided for payment for Ministry of Transport craft.
(6).
Assuming, that in all the circumstances, it would not be unreasonable to expect the Colony to pay for the craft, I think, to arrive at a fair price to be paid, we might scale down the figure of £377,000 to take account of the unsuitability of some of the craft, and to reduce it further by the sums the Hong Kong Government have already paid in respect of freight, assembly, spare parts, etc., amounting to £112,000, leaving a balance of say £200,000.
This figure is not very much in excess of the $3 million for Ministry of Transport small craft included in the Colony's
(b) liabilities in the Governor's confidential telegram 487 of 148.
20th May 1948.
As you know, our job as the Disposal authority for Government- owned ships of commercial type is to sell the ships declared to us as surplus for the best price we can get and to bring the receipts to account as Exchequer Extra' Receipts; the question, therefore, of waiving our claim on the Hong Kong Government for payment for the Ministry-owned craft they now have is one for decision by the Treasury.
I am sending a copy of this letter to the people to whom you copied your letter of 27th January, and to Hudspeth of Treasury.
DEFENCE & GENERAL 28 MAR 1950 P. GISTRY
Yours sincerely,
Allones.
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