CO_968_583_DEFENCE_OF_HONG_KONG_1957_1959 — Page 220

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any assistance from this country. In any event, the Governor had no power to force the Hong Kong Government to increase their contribution which was already larger than that paid by any other colony. The Governor, however, had suggested a compromise proposal whereby, in return for the War Office giving up their disputed claims to land which would be vacated by the Royal Navy on the closure of the Hong Kong dockyard, the Hong Kong Government would agree to pay half of the additional capital and recurring costs involved in stationing the two additional units in Hong Kong. They would also pay their defence contribution for this year, which had so far been withheld, and undertake to continue this contribution for the next five years.

In further discussion it was stated that, although in the short term the Army could make available two additional units for stationing in Hong Kong, this extra commitment could not be met when the Army had been reduced to a total strength of 165,000. In any event, therefore, the garrison in Hong Kong would have to be reduced to six units by 1962. In the circumstances it might be preferable to provide only one additional unit which would replace the artillery regiment due to leave Hong Kong in the near future. This arrangement would, however, depend on satisfactory financial arrangements being agreed with the Hong Kong Government since the War Office could not meet the additional costs within their present Estimates. The Hong Kong Government had already indicated that they could afford to pay half the cost of two units, and this should cover the full additional cost of oné extra unit. On the other hand, they were unlikely to consider any such proposal unless some concession could be made in respect of the War Department land. In spite of the doubts about the War Office's title to this land, it had been in Crown occupation since 1842 and it would undoubtedly have considerable commercial value in view of its situation on the Hong Kong waterfront. Further consideration should therefore be given to the possibility of proposing some counter offer to the Hong Kong Government in respect of this land, on the understanding that no additional charge would be imposed on the Defence Budget in respect of any increase in the Army garrison in Hong Kong beyond six major units.

The Committee :-

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Invited the Chancellor of the Exchequer, in

consultation with the Colonial Secretary and the Minister of Defence, to consider whether some offer could be made to the Hong Kong Government in respect of the War Department land in the colony in return for their undertaking to meet the additional costs involved in any increase in the Army garrison over six major units.

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