CO129-629-8 Social policy 1-12-1949 - 31-12-1951 — Page 121

J-

Behind the questions of progress and development in Hong Kong lies the

financial background, the difficulty of which should not be underestimated.

After the war, H.M.G. came to a settlement with Hong Kong which included a

grant of £1 million, to meet expenditure connected with problems arising out

of the war.

The Colonial Office at the time when this settlement was made

had understood it to include such things as Denial Claims etc., but it

subsequently came to light that this was not the understanding of the Hong

Kong Government, and this has always been a very sore point with the

Legislature. The value of these Denial Claims etc., was put at maximum of

£1 million, the making good of which the Hong Kong Government will as

things stand have to meet from their own resources. Apart from this sum

there are several important outstanding claims arising from the war not yet

settled which the Hong Kong Government claim should be met by H.M.G.

include such items as claims by Hong Kong firms for goods manufactured for the

Imperial forces in 1939-41 (£300,000); value of vessels left in Hong Kong by

Ministry of Transport and Admiralty (at least £200,000); relief stores

supplied by H.M.G. after liberation (H.M.G. may ask for some contribution

towards a total cost which may be as much as £800,000); and in all total

some £650,000 exclusive of the last item. Other Government Departments

and the Government of India etc., are involved in a number of these claims,

and negotiations for settlement are not yet completed.

These

More recently the Hong Kong Government have been asked what sum they and

prepared to contribute towards the cost of the maintenance of the present

garrison of nearly two Divisions with ancillary troops in Hong Kong,

the

estimated initial cost is £10 million plus a recurrent of £2 million a year

from 1950 on, in addition to raising and equipping their own Hong Kong

Defence Force.

Finance on a large scale (£8 million) is required for a new water

reservoir at Tai Lam Chung and also for the new Deep Bay Airport to replace

the present very unsatisfactory aerodrome at Kai Tak. Towards the Deep Bay

Airport Scheme, H.M.G. have promised an interest-free loan of up to

£3 million, but the total cost is estimated to be £4 million at least.

To summarise, Hong Kong has impending liabilities of approximately

£7 million in respect of claims arising from the war, and necessary capital

works (allowing for H.M.G.'s loan); and is called on for as substantial

contribution as her means permit towards current defence costs.

Her

/present