CLOSED UNTIL
No. 52802
Hong Kong
prilitary Contribution.
Previous
30062/27
Co129/509/8.
Subsequent
62761/29 62832/29
(1568) Wt.34576/182_1,000—10/41 N.P.Co. G.682/10
(Ford statements regar
em 1/4/25 31/3/26 144/26-
31(3/27)
rewell to for. 27
27/2/28 come.
Mi Roseway f
Lu Crosland's request.
to late about
1.0. letter
5 in 30062
before they could
promised in to 5, as
lu' Crosland hoped that in
the further
had to refer
wo. Well
might send
out why of
to thong
without waiting for
for letter
In £ 114,000.
thought that
The longer
we delazed
doing 20
the less hope there
express itself
hi Roswway gave
that thong
withing to waive the expand.
The impression that if
Wo. and not
Hongkong Insisted wo
the claim-
wh. is cheering. They
it by deducting the
porn the
untitary contritra for this for next) year.
alle & usish
In the excumstances ? wit
further to ws. saging
underflood
that some
further communication
before the further
that the AC. wa
with 165
lobe brought before
cr. fort.
without delay.
Eu there
eines it
to for. for his
but that
difficult financial position of an Wolony,
as a position allogetan different from
Wh. The Chry slood
first suggested that
This exfarment sad be
**Gellement
soft cuts
off arriving at
other outstanding perations, the
that he does
to complying with the
request.
?? add that SoNS
wo. Wellen. And
Las Cant
with sumprise that
actually been
suren qued
without prior consultation on th
finally brought to account?
to the Exchequer,
This Deft,
copy of 526 in 30062 & subst of above ming of interdepartmentaly wrangling)
excluding of (as savowing
to for. for consom
M27/2/20 10.9.8.25.2.25
In orchyby fore. Becaf State.
Ian all for helping the Treasury
and the British taxpayer when one
ebly do so. Hong Kong
Car seavanebly
is not row, unfortunately,
financial position
as it lasci
1970, and I dont think that we
aught to do otherwise then write
as suffected by Ihr Beckett.
2 To W. O
1, 2 MAR 1928;
3. To Gov. Conf- 12 MAR 1924
4. Yo You. 96/m/c.1) 14 AR 1928 4/
15 Mr. Credand 15 Sir C. Cleenenti
Sir C. Clementi, who has been conferring
Landed this to us.
To his great
salsfaction Wo. are contemplating
ballus. at itk
IL: retention
the pamanent garrison
porporing Build new bawacks for his purpose.
If thing live Cup Ikeir promises in It's respect
Link khi t14
I waived,
shr. not commit surches at
Sir C.C. said
were quili
favourably risfired Inconsidy suggshön
Calliation in the basis of the
heil. contrib. provided it was quiti char
that thing
sland Klose as
compand with hi present angle. He had
a desp. On 15 subject for OAS wd. Lan arrived
asked us to tel.
as it hasn't,
His appears o
a favourable Pparticity for poaching Hi mettr
Khrough.
Dft tel. Submitted. (1: £14,000 comn in useful have loo)
Pallaticsuck
Jo to Garzel -
19 July is mind
X.O.A.G. Tel
24.7.28.
Hopes to send despatch by neat mail.
I have info Sir C.C.
? put by
Tallutasuck
1325 alá
8. O. A. G. Tel.
Refund and not be waived.
9.0.A.G. Conf.
Submits figures in support of proposal as to future contr.
10.0.A. G. Cauf (2)
Further observations.
This has been delayed as the file was in
circulation with the S.S. Military Contribution.
I am not sure whether it would not be
better to wait until some progress has been made
with negotiations about the S.S. problem. That
will, however, be a slow business and there are
çonsiderable points of difference between the problem MH.K. and that in the Straits, and I think on the whole it
would be preferable to proceed with this independently
of the Straits.
See th. Chesterbuck's
min. of 18.7
The O.A.G's. proposals seems to be generally
reasonable and it is understood from Sir C. Clementi
that the War Office are at the moment prepared to give
them favourable consideration. Before actually submitting them to the War Office, it might be as well to consult Sir C. Clementi, who is returning to
London today, although he will probably not be able
to add much to the despatch (No.9). The proposal in the second despatch (No.10) should not be divulged to the War Office at present and certainly not until
after further discussion with Sir C. Clementi.
As regards No.8 we should let Sir C. Clementi
know in case he has any further discussion with the
War Office, but I do not think any other
action is necessary until the despatch arrives.
Subject to anything that may arise
in discussion with the Govr. ? send copy of No.9 to the War Office saying the S. of S. is disposed to consider these proposals for revision
reasonable, and asking that they may receive the sympathetic consideration of the Army Council.
Copy despatch and draft to W.0.to
Treasury lf.
Thegraph
In de refier
with Sie C...
11 So hotel cons
20 Sipt 19281
12.0.A.3. Conf
24.8.28.
Overpayment of contributions
1917-19.
Share bathed to Pril
Clemente who has hun to W.1.
prids thon symfethibiz to the patok propons
basis of
avenment. Hedas
not wish to hef the 12t0b
in renrur
And then
and both
defer to N.O. (9th) undolos
that PJ P. thinks
raying that
the new basis of 124.0%
the estuction while gitting
opperxionality the nave
amount with te much
mue conmocent
chatting
to hrow its testitity
Hilling to hrow it's
alos to avoid continual
in advance, and
disputes
to what con
stibutes renove.
amount / the contribution
automatically
with the grill of the walt of the Colony.
Pay that if his is not acested it with te muchary be bake
various claims to
relich under the reciting system examented in
pars 488. of Nog.
As sequeds the question of
the rehand of the surfingmet
103 raised
in No12_ Pin 2 or
artin to
not win any acting from
be tchen until it is ou
whether N.O. agre
the fermosent garsion
4 H.long to 4
do it will wit
them much fu
barracks
that be thirts Colony will
wair their Main – B.
Leave that alone
may for the moment.
Walter Ellie
29/1 G.G. 29.5.25
12/12. 13 To thee. With copy 9+10 × 14661/26-
140.A.G.Tel
27.10-28
smanei's hayable 192641927 "if dedentin
recommenced in 11
The W.O. know the altamative to
accepting the revised basis of
a claim for there seductions (Ele para.
help them to
3 of 13) to
up Chari minas if they have
The actual figues & Mr. Becked
be sent over
I culmir aft
Supported they might Semi-officially.
To M. Cerland.
? wo way
29.10.28
the figures
well have the
15. To J B Crosland (ause 11014) 240-3:
4- 31 ugi 1928
The question of the refund of the over-
payment of £114,000 was held over pending the
decision as to the increase of the permanent
Garrison of Hong Kong, see Mr. Ellis's minute
of the 29th of September.
The War Office's proposals have now been
shelved until the middle of next year at any rate,
and there is, therefore, no prospect of the new
It is for consideration, Barracks being constructed.
therefore, whether we should not take up the matter with the War Office now, but before doing so it may be desired to discuss with Sir C. Clementi.
He is now back in London, but so far as I am aware
has not informed us as to when he intends to call
ge 10Page 11
at the Office.
It may therefore be desired
to ask him to call and discuss this and other
matters.
Since I dictated the above,
Sul. Clementi has called. He is
refinitely of opinion
that are
for the ₤114,000.
? Send coby (2 50 W.0, ref. (2)
caying that, as "Col. Jan. are
prepared to
waive this, 5.oft.
will be glad if arrangements
it can be refunded
immediately.
I delayed this in the hope that we might let
no have something about in I. I. before shot in this claim. You
we cathen held out a
U cemcumber that
hope that out. Clementê weight
efer to waive this. But I think
only proveed
purposed.
Y city of aberrant passage
be attache.
no 32 on 52056 steails and
extract attached due to of dft sent on wo can sold for war) 1M323
now in cefly
the soft's celler of 26 nor
intimation
bash for thes
10 To 1.0. (ufanja. 12)
со сторо
aft submited
Aberken 4/1/25
Enquiries as to painto
27.11.28
to points that have arisen in considn. of proposed change
17. horland
in method of
assessment.
18. 0.4.3. bouf (2)
Confuns ho. 144 finds. details
of estimate
1.11.28.
tome allowance has Wote wade
wade for
Taking the points raised one by one.
(1) The figures quoted are roughly accurate.
According to the table in 14661/26 the total
contribution on the old system between 1901 and 1927
was approximately 59 million dollars: on the new
basis it would have been 49 million, showing a
Rent Restriction fees deficiency of 10 millions.
(see last colum (ath) but it does
not kids. the Jah.
The figures, excluding
the years from 1922 onwards, are 36 millions and
31 millions. This is certainly rather a difficult
point to get over and our answer must be that it is
contended that various deductions should have been
made from the contributions
made from the contributions on the old system, and
the 0.A.G's. estimates show that these would be
amend ed
but that in the hast for 4 years
the & afirmat tas hivern, white
Filler M
Ecrtainl
amended to something like a third of the total
contribution in which case the deficiency
would have been even more. We might also point out that the valuation increased less rafialy
ely than the aggregate revenue during the
war years owing to the natural slowness with
which house and land rents adjusted themselves to the new level of prices, and that looking at
the pre-war years only the two systems give almost identical figures (17,00,000 and 17,500,000
respectively).
(2) I think this is rather fanciful.
any case even if the rents in Kowloon are less
than those in Hong Kong, the aggregate valuation
is hardly likely to be lower. Experience
generally suggests moreover that the more thickly
rents populated a place becomes the higher the "retes.
It is hard to predict what is going to happen
but I do not really think there is much in
this fear.
(3) It is not entirely clear what area is
covered by the valuation. It is stated in
paragraph 14 of the despatch of the 24th of
June 1926 that it extends to the whole of the
Island of Hong Kong, Kowloon, and New Kowloon.
Presumably it excludes only the less settled
parts of the new territories. Before reaching
final agreement with the War Office it would,
however, be desirable to get exact agreement as
to the limits of the assessment area.
(4) It is unlike the Straits want to
follow Hong Kong's example as they are at
present pressing for a very different system.
We wand one. ufe & om official letter -
We shot. rond it fperially
X I and art send ??
1k $.0, cau.
yet write to them so
Perhaps Mr. Jones and the Ceylon Department will
advise as to the effect in Mauritius and Ceylon,
but in any case if the War Office think it is a
good system to adopt in Hong Kong I do not really
see why they should be afraid of its extension
elsewhere,
(5) Subsequent semi-official correspondence
between Mr. Amery and Sir L. Worthington-Evans (copies of the relevant extracts are attached to
this file), have made it clear that the claim
for₤114,000 is not to be dropped.
(6) I do not think we intentionally refrained from sending the Treasury a copy of the correspondence and we might now send it.
? reply on the lines of the above, enclosing
a copy of No.18. (subject to anything that it might
be necessary to say about
Mauritius and Ceylon). (with all smell)
and send copy of 13 to the Treasury lf.
and 11, 14, 15, 17, and reply semi-officially.
5. Crime
18.12.28
~ Clauson
(4) seems
& fall into
Auswa bis
that Athlong differs from the other
places in the cespect that all of it that really
County is
& yet there is
municipality.
the rating
is their concm
In the other places the urban areas are
municipalities
the Spised basis
but Hong Kong.
wood scarcely be affront to sing place
101 12/12
There is more in
Mr. Vunon
As you know, Colonial Military Contri.
•butions, where they exist, are almost fignot quiti) all in the from that the
Col. with contribute to H.M.G.
x % of the Revenues of the formay or the actual cost of the garriam, whicheon be the less. (I think that in the case of Mauritius the second alternative is omitted.)
The proposal now to to change this in the case of Hong Kmy to x 2 of the rateable value of b f (for practical pumpres) the urban profeet', in Hong Kong, I don't think there is any really losi- cal basis for this, but the lorong seems to like the idea. It seems clear that te preceding wd not affect the other fols. concerne since in Hong Kong & in Hong Kony only, the urban property is every. -bing the rest of the for, nothing.
I think we can agree to the proposal.
it than this. It's a muerational busai of contribu
tim wveltes dispustes to what con
6.4.M.Tamm
Hay Kay will wat
a percedent. But the
any change from the W.O.
W.O. kait f
ů that it
"the sale went from the Colony's point
29/00 of view that it means
Principles don't really come
decrease.
In Jones & Cylon Rept
Subject to marginal comments I
with Zu Camie
We weed Landly
in of 5.2's Mom.
letters are
nmisprist
the best way of conclurting a
neystaction of Paeppon
this character: lut
most fall in with
Mr Robert's method-
Welt kelegraft to for arting
the meas him to most adeff with mes
19 so ho tel
Carthy defining
afssment
114 29/12
G.G. 29.11.25
2 Jan 1929,
20 To brosland (17 anos) ufe statement
21. W.0.
stili regel on 20
Outstanding
15·12·28
sum in special
reprovision act.
22. To wo (u/c 18) 8/126
23. To Treas (4/13 w/embs. +11, 14+18) 1/14/26/1/20
22. 2.35′′
ong. regd. on. 52859/28
52882/28.
119/Abd/745 (F.1.)
The War Office,
Whitehall, S.W.1.
15th December, 1928.
Dear Beckett,
The £114,000 odd, now the subject of a cause célèbre between Hong Kong and us (your reference, if you
need one, is 52,859/28 of May 12th last) has had another
adventure and turned up in the Colonial Military Lands
Account. It was our intention in certain circumstances
to include the sum in the special Reprovision Account
opened when there was a prospect that the military would
be provided with quarters elsewhere in the Colony. That
project was dropped and the Command were told to merge the
special Reprovision Account with the Military Lands
Account. They had, however, already posted the £114,000
to the Reprovision Account; thus without more ado it has
turned up in the Military Lands Account and the item has
been promptly disputed by the Colony. It has nothing to
do with Military Lands and the Command have been
instructed to delete the item.
We are letting you know lest the Colony should
write to you about it.
Yours sincerely,
(Signed) A. F. Dobbie Bateman.
H. Beckett, Esfice.
Colonial Office.
Mr. Be ckelt 1/1 Mr. Ellis
Mr. Bottomley
Sir E. Harding.
Sir J. Shuckburgh.
Sir G. Grindle.
Sir C. Davis.
Sir S Wilson.
52802/28.
HOLONIAL
Mr. Ormsby-Gore.
Lord Lovat.
s.o. for Sir G. Grindle's
signature.
Mr. Amery.
J. B. CROSLAND, ESQ., C.B.,
Downing Street,
My dear Crosland,
January, 1929.
I am sorry to have been
so long replying to your letter
of the 27th of November about
the Hong Kong Military Contribution.
The despatch sending particulars
of the claims for relief under the
Tabu lon Statement.
(to be copied)
2 drafts
copy 18 to W., LF coky 13 (with all well) 60 (IT TO T), LF
existing arrangement, has now
arrived and is being sent to
you officially.
As to the other point s
raised in your letter I will take
them one by one:
(1) I enclose a copy of the
statement enclosed in Hong Kong
despatch of the 24th of June, 1926
which I am sorry was omitted from
our official letter. It appears
from this that the figures you
quote are roughly accurate. The
total contribution en the old
system between 1901 and 1927 was
approximately 59 million dollars
as compared with 494 million on the
new basis. The figures of 1901 to
1922 were 36 and 31 millions
respectively.
Obviously on the
face of it it looks as if you would
have lost if the new basis had
been adopted earlier but it must be
emembered that if the claims for
elief which Hong Kong are now
utting forward had been conceded
earlier, the contribution would have
been considerably less. You will
see from the Hong Kong despatch
of the 1st of November, 1928, that
the estimat ed deductions amount to
something like a third of the total
contribution, so that you would
have been decidedly worse off if
these had been made. Moreover
it must be remembered that the
valuation increased less rapidly
than the aggregate revenue during
the disturbance of prices in
the war years owing to the natural
slowness with which house and land
rents had just ed themselves to the
new level of prices. In the last
three or four years you will observe
that the assessment has risen
although the revenue has fallen,
and looking at the pre-war years only
the two systems give almost identical
figures ($17,800,000 and $17,500,000
respectively).
It is dangerous,
therefore,
therefore, to lay too much stress
on a comparison which includes
the war years.
(2) I do not think there is
very much in this fear. It is,
of course, obvious that rents in
Kowloon, which is undeveloped, will
be lower than on Hong Kong Island
itself, but it will be somewhat
remarkable if, owing to the development
of Kowloon, the aggregate assessment
decreases
It is very difficult to
movement
forecast the eprort of/
of valuation
of property even a few years ahead,
but experience generally suggests
that the more thickly populated a
place becomes the higher the rentsmise.
(3) We have no exact information
as to what area the valuation covers.
Paragraph 14 of the Governor's
despatch of the 24th of June 1926 stated
that it extends to the whole of the
Island of Hong Kong, Kowloon and
New Kowloon, and we assume that
it excludes only the less settled
parts of the new territories.
agree, however, that it will be
essential to get an exact definition
of the area before we reach any
final agreement, and are telegraphin
by tel. To send f
an exach
to Hong Kong on the subject.
definition,
with map.
(4) We do not think that the
adoption of the proposed new basis
in Hong Kong would be followed by
a similar proposal for the other
Eastern Colonies,
Conditions in
Hong Kong are quite peculiar.
Practically speaking Hong Kong
consists of a large urban area and
Kay Withe
practically no countryside. The
Government is Municipality and
accordingly raises part of its
revenue from rates levied on an
assessment which would elsewhere be
received
received by/separate Municipality.
conditions are not reproduced in the
Straits Settlements, Ceylon, or
Mauritius, and I do not think there
is any likelihood of any of them
proposing to adopt a similar system. (Apart from this I do not quite see,
if you decide that it is a good
system to adopt in Hong Kong,
I's extension
why you should be afraid of adopting
elsewhere,
As you have seen from
our official letter of the 14th of
December, the Hong Kong Government
is not now prepared to waive the
refund of £114,000 overpaid.
(6) Our not writing to the
Treasury was an oversight and we
have now sent them a copy of our
official letter to you of the
12th of October.
Yours sincerely,
Signed) W. C. BOTTOMLE
( In the absence of Sir G. Grindle
211 Campi/,
Beckettil, low
Mr. E. J. Harding.
Sir C. Strachey.
Sir J. Shuckburgh.
Sir G. Grindle.
Sir C. Davis.
Sir S. Wilson.
Mr. Ormsby-Gore.
Lord Lovat.
Mr. Amery.
DRAFT.Tel
52802/28 HK.
Wirkour Prinity
Ang Kany
coded & sent
12.50 fm 21:29 THW
dest.28th
28th July Caf.
Graf. Your Millitary contribution.
Pl. send
despatch dis
send by desparch
exact definition
intended to be
covered by assesement, with
C. 52802/28E NO. 187
TED OR USE
GOVERNMENT HOUSE,
HONGKONG.
1st Novaber, 1928.
Enclosures 1 to 3.
Copy 1/4
27th October,
I have the honour to confirm my telegram of
1928, regarding the military contribution
payable by this Colony, in which I estimated the amounts
which would have been paid for 1925 and 1927, ha the
deductions recommended in paragraph C of my despatci.
Confidential(1) of 20th July, 1928, been made, at $2,367,084
and $2,645,566 respectively.
enclosures.
The details of these figures are given in the
It will be observed that no figures are given in respect of it is (c) Aerodrome, (d) Harbour Dredging, and (f) Ferrics. The Acrodrome is not yet carning revenue, the
interest on the guns expended on dredging during the years
in question is negligible, and the establishment of a
Government vehicular ferry is still under consideration.
The calculation of Municipal Aevenue, exempt
from military contribution, is based on we Singapore
Municipal Astimates, and, in accordance with the practice
in the Straits Settlements, deductions have been made in
THE RIGHT HONOURABLE GRG 131/2963. 24. 5/34. (18270) M. x5.
LLUTENANT COLCHER 1.0.1,S. AIRY, H.P.,
+ ho co + No 1 52809/2
respect of rent for Government buildings let for profit,
Hospital Board revenue, and Education Board revenue,
The figures given are by way of estimate
only, but I think it may safely be reckoned that the
deductions specified would have reduced the military
contribution by about one-third.
I have the honour to be,
w.] Southern
Your fost obedient iurato servant,
to. I. Soud both.
Officer Administering the Government.
See Enol. 2.
See hd1, 5.
Enclosure in No.
Details.
(a) Wireless Telegraphy
(b) Waterworks (included in g.)
(e) Post Office Operations
(g) Kunicipal Xevenue
renue as per
Statement No.1 attached.
X. Rent of Government Buildings
let for Profit
Hospital Board Revenue
Education Board Revenue
68,133.29
85,612.24
263,755.04
336,885.29
4,974,541.55 5,240,161.05
93,870.44
79,022.01
101,735.89
116,264.88
83,899.75
121,981.75
X. as per statement No.2 attached.
The Kilitary Contribution actually paid in respect of year
Military Contribution which would have been due if the above deductions had been allowed.
$5,585,955.96 $5,980,427.22
5,484,772.00
3,041,652.00
2,367,584.81 2,645,556.56
Enclosure Zain No.
Statement No.1.
ACTUAL REVENUE OF HONG KONG.
Revenue which would accrue to a Municipality
(based on Singapore practice.)
Revenue Detailed
Assessed Zazes
3,636,660.36
3,676,159.06
Compensation in lieu of
34,275.05
47,051.81
3,670,945.41
3,723,210.87
- TAXUS.
Carriage, Chair, &c.Licences Dog Licences
240,155.83
234,638.60
14,862.00
9,771.00
255,017.83
241,409.55
LICENCES.
Chinese Undertakers' Licences
Dangerous Good Licences
2,508.00
2,386.00
Marine Store Dealers'
Licences
10,080.00
10,080.00
13,448.00
13,366.00
Hawkers' Licences
81,206.00
105,483.00
Special Food Licences
11,491.11
12,645.60
Cemetery Fees
Chinese Cemetery Fees
6,968.50
6,829.00
Motor Ambulance Zees
4,029.00
4,632.00
Use of Motor Yans
6,254.65
7.474.95
Iaundries
2,400.00
2,400.00
Slaughter House
79,714.70
109,563.60
Ma Tau Kok
25,540.00
32,680.00
Conservancy Contract
13,868.60
16,175.20
Scavenging City, Village and
Hill District
1,401.00
3,255.70
233,427.91
301,609.00
232,594.13
233,241.50
Bathing Xckets
3,120.15
5,422.60
235,714.28
238,664.10
MISCELLANEOUS
Other scellaneous Receipts 56,294.92
45,658.68
Royalty Payable by Hong Kong
Tramways Co.
38,016.19
39,040.40
94,311.11
84,679.00
MATER SUPPLY.
Water cess Supply and
Meter Xents
471,679.01
634,222.60
471,679.01
634,222.6
TOTAL REVENUE.
$4,974,541.55
$5,240,161.05
Inclosure. 3on No.
Statement No.2.
ACTUAL RELAMUR OF HONG KONG.
Revenue Exempt from Military Jontribution in Straits
Settlements practice.
$93,870.44
(A.) Rent of Zuildings
(B.) Municipal Levenue
1.Rates, Asessed Axxes
Compensation in lieu of Xtes
3,636,663.36
3,676,159.06
34,275.05
47,051.81
3,670,943.41
3,723,210.87
255,017.23
244,409.35
3.Licences
15,448.00
13,366.00
5.Rents (Markets
233,427.91
301,609.05
Zickets)
235,714.28
238,664.10
6.Miscellaneous (ther Asc-
cellaneous Receipts
and Royalty)
94,311.11
84,679.08
8.Water Supply (ater ce supply deter Pents)
471,679.01
634,222.60
$4,974,541.55
$5,240.161.05
(C.) Included in 3.
(D.) Hospital Board Revenue
Medical Treatment
treatment
Analyses
Bacteriological
Zxeminations
(E) Education Board Revenue
78,092.98
92,454.26
16,422.50
16,146.00
7.220.41
7.664.62
101,735.89
116,264.88
Public School Fees
79,508.50
117,581.50
Technical Institute
4,391.25
4,600.25
83,899,75
121,981.75
Total A, B, D and 3
$5,254,047.63
$5,557,929.69
128 [No.12]
C.52802/28
16/Abroad/276
9 NOV 1928
My dear Grindle,
wan Office,
November, 1928.
COLONIAL
Many thanks for your note of 31st October, enclosing
copies of two telegrams which have passed between the Colonial
Office and Hong Kong as to the effect of certain claims for
relief under the existing system (if these were all agreed to)
on the Colony's military contribution. We shall be in a better
position to appreciate this aspect of the matter when the
promised despatch furnishing details is available.
In the meantime perhaps I might put to you semi-
officially some points that have arisen so far in our consideratio
of the proposed change in the method of assessment.
Colonial Office has probably formed some valuable opinions on
the subject during the two years since the Governor sent you his
original despatches in 1926, and you may be able to set at rest
some of our doubts before we reply officially!
(1) It is realiged of course that we for our part do not
want to make a change of method which might unintentionally give
us in the future smaller contributions on the average than we
should receive if the present system continued.
shaikh lan
96. 8/34. m
131/2963. 24. 34. (18271) M.xs.
It appears,
152002/200
Sir Gilbert Grindle, K.C.M.G., C.B., + 16.(52
Colonial office,
+ho (52802/28 [now. I shell].
however, that if the proposed new method had been in operation
in the past, we should have received considerably less than we
have received on the existing basis. The table referred to at the end of para 16 of the Governor's despatch of 24th June,
Sar. Tatt1/26
1926, was not enclosed with the copy of that despatch sent to us
It is true that the Governor's.
with Colonial Office letter of 12th October, 1928, but we make
out that if the proposed new basis had existed since 1901 we
should have received a total of about 11,000,000 dollars less
than we have in fact received.
despatch gives reasons why the revenue basis yielded much more
in certain years (1922-25), but is this much comfort to us?
Even if we miss out those years our total loss since 1901 would
apparently have been over 5 million dollars.
Endeavouring to
(2) So much for the facts of the past.
peer into the future, it has been suggested to us by one of our
own people who has recently served in Hong Kong that we
likely to lose on the change, and for this reason. In the past,
rents (and presumably valuations) have been exceptionally high
owing to the fact that the main residential and business area has
been in Hong Kong itself, where building on steep slopes is
~ the 14661/26. + el 0280 2800
(its net pundice
/expensive
expensive and where sites and accommodation are scarce.
The extension of the Colony is now taking place on the Kowloon
side. Land there is practically unlimited and building is
cheaper, as sites are level.
Rents are much lower in Kowloon
and this is tending to bring down the level of rents in the whole
As Kowloon extends this will be more and more the case.
Is it not possible then that of all the main items of revenue,
rates will show the smallest proportional increase? Your
opinion would be of value.
(3) We notice that the proposed rateable valuation is not to cover the whole of the Colony but "the most important districts".
I am not quite clear as to this limitation; are you satisfied
that the point may not give rise to controversy as to the area
of assessment?
(4) If a change from the basis of revenue to that of rateable
valuation is made for Hong Kong, will it be followed by a similar
proposal for the other Eastern Colonies, or are the conditions in
Hong Kong so different as to call for such a change there more
strongly than elsewhere?
(5) Mr. Amery, in alluding to this subject in his letter of
29th October to Sir Laming Worthington Evans on the Straits
/Settlements
Settlements contribution, remarks that the Hong Kong proposals "involve dropping a claim for a refund of £114,000 which would be
decidedly embarrassing to you at present". We were very glad to
receive this assurance; no reference appears to have been made
to it in the correspondence received from your Department as to
the Hong Kong proposals.
(6) The Treasury would of course have to be a party to any
change in the basis of assessment. The War Office would
naturally express its views to the Treasury in due course, but it
might save time if the Treasury were considering the matter from
their point of view simultaneously. I do not know whether you have in this case intentionally departed from your practice of
sending the Treasury a copy of the proposals at the same time as
they are sent to the War Office.
Yours, sincerely,
Wurmland
brosland
b wsland.
Mr. 0/12
28. 814 87/12
Mr. Bottomley.
E. J. Harding.
Sir J. Shuckburgh.
G. Grindle.
Sir C. Davis.
Sir S. Wilson.
Mr. Ormsby-Gore.
14 DEC ISA
Lord Lovat.
Mr. Amery.
DRAFT. comon:
win who on 52802
Jaz com 24 Ang Lind
Recine. quickly with
new cares.
With af to the letter from this depa
march I am chi t
hansmit te
to be laid before
kan A.C.
on account
disk. from the oas of thong
which he asko that the seem
£ 114,317 - 1849 due
conpaid military contribution
Exframmanband paid to the ca. for the colo
for the credit of the Colony.
2. As the fork of Hongkong in
not prepared
refagement,
The AC. will
waive tis
to request that
now five directions
amount to be paid to
l'un ca.
(Signed) WAL
HK Ao.uk bb Atterto
1 th December, 1928
My dear forthy,
I have your letter of 20th November about the
Etraits contribution.
I am quite ready to put it to
Clifford that the Etraita should wake the offer of 17%, provided that as can be sure that the offer, if made, would be acceptable to the Chancel or of the Fachooner.
have sent him the corespondence, perhaps you would be good
enough to get bis concurre po.
Ls regards the tro
·zree that the concession
grouré to the Straits, ii m.de, :111 afford no ground for a
points which you mention, I cuite
sicil concession to Hong Kong.
On the other point I
agree sl30, 11 it is understood that there is no cuestion
of withdrawing the exclusion, on which we have agreed, of the capital cost of works for the tigen, 1olding & refund
of the payments already mode.
(SD) L.S.A.
EXTRACT from a letter from The Right Honourable
Sir L.Worthington Evans to Mr. Amery.
Dated 30th November, 1928.
I see no logical ground for altering the
present agreement but if you, with the concurrence of
the local people, put forward an offer from them of
17% as a final settlement of this vexed question,
then, on the understanding (1) that, with this
further safeguard of the Colony's interest, there will
be no question as to how far the troops in the Straits
Settlements are there for local or for Imperial purposes
or of excluding any part of their cost from calculation
of the Colonial military contribution, (2) that you
agree that the circumstances are so different in the
cases of the Straits and Hong Kong that this concession
to the former will offer no ground for a similar
concession to the latter, if such should be claimed
by Hong Kong, I would accept, subject to the concurrence
of the Chancellor of the Exchequer.
EXTRACT from a letter from Mr. Amery to the Right
Honourable Sir L.Worthington Evans.
Dated 26th November, 1928.
No. 52056/28.
As regards Hong Kong, i stand by what I said
in my letter of the 29th of October on the main point,
but there are new developments, which may not be so
satisfactory to you, about the £114,000.
Sir C.Clementi
was in favour of waiving this claim if the War Office's
proposals for the building of new barracks went through
since the sum would be a help to them in meeting this
heavy expenditure. But as you know the War Office
proposals were turned down and this question postponed
till after the General Election. In other words there
is no reason to expect that this money will have to be
spent for a very long time to come, if at all.
these circumstances Sir C.Clementi is no longer
prepared to stand against the local wish to obtain this
refund, and we shall be writing to you officially
asking for it. This is a disappointment, but in the
circumstances, I fear, inevitable.
from a letter from the Right Honourable
Sir L.Worthing ton Evans to Mr. Amery.
Dated 21st November, 1928.
Before giving a definite answer to your letter
I should like to be clear on two points:-
As you know, one of my anxieties has been the
possible effect of a reduction in the Straits percentage
on Hong Kong. I gladly accept the assurances in your
letter on this point, but the proposal for a change
in the method of calculation at Hong Kong has only
recently reached the War Office, and we are still
examining it. If the concession you propose is to
be made to the Straits there would be some advantage in
not making it public until we have come to a definite
settlement with Hong Kong. Incidentally I am glad to
see from your letter that the Hong Kong proposals
involve dropping that Colony's claim for the refund
of £114,000; the Colonial Office letter about the
Hong Kong change did not mention this very welcome
EXTRACT from a letter from Mr Amery to the Right
Honourable Sir L. Worthington Evans.
Dated 29th October, 1928.
You asked whether there were not a danger
that Hong Kong would also ask for a reduction.
you will see from our official letter of the 12th of
October, Hong Kong have put forward proposals for
altering the basis of the contribution so as to yield
approximately the same sum, and the Governor has
already had some discussion with your advisers. I
think the terms offered by clementi are decidedly
advantageous to the War Office particularly as they
involve dropping a claim for a refund of £114,000
which would be decidedly embarrassing to you at
present and that if you make a prompt bargain with
Hong Kong you will make it very awkward for them to
base anything on what you may concede to Straits.
from this the cases can I think be sufficiently
differentiated.
Although it is true that Hong Kong
used to urge (with some degree of reason) that its
garrison was maintained largely for imperial purposes,
the present position in China has made them decidedly
anxious, and the Governor, as you know, is in favour of
increasing the permanent garrison, whereas apart from
the gift of land to the Admiralty and Air Ministry
nobody in the Straits has shown any marked enthusiasm
in favour of the Base! So, taking it all round, I
don't think, if you concede any thing to the Straits,
you are likely to make trouble for yourself with
Hong Kong.
Exhart from est submitted on
5-2056(5.5.1
As regards Hong Kong, I stand by what I
said in my letter of the 29th of October on the main point, but there are new developments, which may not be so satisfactory to you, about the £114,000. Sir C. Clementi was in favour of waiving this claim if War Office's proposals for the building of new barracks went through, since the sum would be a help to them in meeting this heavy expenditure. But as you know the War Office proposals were turned down and this question postponed till after the General Election in other words there is no reason to expect that this money will have to be spent for a very long time to come, if at all. in these circumstances Sir C. Clementi is no longer prepared to stand against the local wish to obtain this refund, and we shall be writing to
you officially asking for it. This is a disappointment but in the circumstances, I fear, inevitable.
Came 29/10
Mr. Beckett 28 Mr. Ellis Mr. Bottomlef.
ir E. Harding.
Sir J. Shuckburgh.
Sir G. Grindle.
Sir C./Davis.
Sir S. Wilson.
Mr Ormsby-Gore.
Lord Lovat.
Mr. Amery.
COLONIAL OFFICE
31.10.28.
52802/18 HK.
5/of die S. Gunceli's say.
Corland,
official letter
52802/1928 of the 12th our about
J.B. Gorland, Ey C.B. The H.K. Military beribution
To O.A. S. Tel. 20.9.18
(No.11) Fro. 0A9. Tel. 27.10.28
mentioned that, if you were
to accept the profored
- new basis of
should have
assessment, we
a to take ap
various claims for chi
basis for famward
on the existing by the O.A.G. We have telegrapher
To H. K. To ask what would
have been the amants
buyable for
1926 1927 if
all the deductions they
had been made. I encore
opies of from which
the telegrams
will see that
the contributions
basis are
decidedly lower The basis of 122/%
of the annual valuation.
Yours sincerely
C:52802/285No0
8[NO.14]
2ZOCT 1928 OQL.OFF!
XECEIVED
NTED FOR USE
IAL OFFICE
TELEGRAM Irom the 0.A.G. of Hong Kong to, the Secretary of
State for the Colonies.
(Dated 27th October Received Colonial Office 7.15.a.m.
27th October, 1928.)
27 Tektin Your telegram of 21st September.
Military
Contribution.
contribution if deduction had been made as recommended to
be for 1926 $2,367,584 and for 1927 $2,645,566. Regret
delay due to necessity for communication with Singapore.
Despatch follows.
I estimate amount payable as military
to Grappland
Copy Frem (23)
ho. c 5280
52802/286
28 CNO 11
Starts Defence con- 904 181/2968. 24.
8/04/m.xs.
Beakelt 8
Mr. Bottomley.
Sir E. Harding.
Sir J. Shuckburgh.
Sir G. Grindle.
Sir C. Davis.
PRICTED FOR USE Partive BOLONIAL OFFICE
52802/28. H.K.
Downing Street,
October, 1928.
With ref. to the letter from
Sir S. Wilson.
Mr. Ormsby-Gore.
this Dept. of the 12th of March, I am
Lord Lovat.
Mr. Amery.
THE U.S. OF S.,
WAR OFFICE.
etc. to transmit to you, to be laid before
the Army Council, the accompanying copy
of a despatch from the Govr. of H.K.
together with copies of despatch/from
the O.A.G. of H.K. relative to the
Military Contribution payable by the
24th June 1926 (14661925
28th July 1928. Conf、(1)₺
28th July
1928 Conf.(2)
Copy wpanels Leas (33
purposed
The S. of S. considers that the
new basis of 12% on the valuat ion, while
theoximality yielding the same
made during the preceding year amount will be much
more convenient in that it enables the
Govt. of H.K. to know its liability a year
in advance, and also to avoid continual
disputes as to what constitutes revenue.
The amount of the contribution will
grow automatically with the growth of the
wealth of the Colony.
3. If, however, the new basis is not
acceptable to the Army Council, it will be
necessary to take up the various claims to
relief under the existing system enumerated
in paras. 7 and 8 of the 0.A.G.'s Conf.
despatch of the 28th of July.
I am, etc.,
(Signed) WALTER D. ELLIS
NJONFIDENTIAL.
GOVERNMENT HOUSE,
HONGKONG. 24th August, 1928.
I have the honour to acknowledge the receipt
of your confidential despatch of 12th March, 1928, enclosing
copy of correspondence with the War Office relating to the
sum of £114,317. 18s. 9d., being the overpayment of Military
Contribution in the years of 1917, 1918 and 1919, and, with
Sonreference to paragraph 6 of the War Office letter of 8th
30062/27
Aus. fil.
ecember, 1927, to inform you that I have consulted the
Unofficial Members of the Legislative Council as to whether
in view of all the circumstances of the case this Colony's
claim to that sum should be waived.
The Unofficial Members are unanimously of
the opinion that the 114,317. 18s. 9d. in question should
be paid to this Goverment and they consider that the present
financial needs of the Colony do not permit it to forego
this substantial sum which, in their opinion, is rightly re-
payable to it.
I concur with the Unofficial Members and
I shall be glad if the War Office may be informed of the view taken by the Unofficial Members of the Council and by the
Duin to 450 16.
THE RIGHT HONOURABLE
LIBUTENANT COLONEL L.C.M.S. AMERY, M.P.,
Goverment
Goverment in this matter and requested to pay the amount
in sterling to the Crown Agents for the Colonies for the
credit of this Government.
I have the honour to be,
Your most obedient humble servant,
W.D. Southorh.
Officer Administering the Goverment.
Whis 20/9/
Mr. E. J. Hardiffy.
Sir C. Strachey.
Sir J. Shuckburgh.
Sir G. Gfindle.
Sir C. Davis.
Sir J. Wilson.
Mi Ormsby-Gore.
Lord Lovat.
Mr. Amery.
52802 H..
corted Essent
4.0pm 20.4·28
Film pincodes
Hillary. Joura
6 Crosland 15. Copes Recever to Mr. Ellis
Nin to your def 7
28 futy confitential
amount of
military contribution fu 1926 1927 if
all deductions perm
-mented by you had bun made
Furnish details
despatch.
0.52802/28040 16]
le UCIFIZERIAI (2).
RECEIVAD
30 AUG 1928
COL. OFFI
GOVERNMENT HOUSE,
HONGKONG. 28th July, 1929.
Eas. 160
With reference to my despatch Confidential(1)
of to-day's date, I have the honour to state that for the purpose of obtaining a settlement of the vexed question of the assessment for military contribution I should be inclined, if necessary, to go one step further than the proposal made
boky & W. Din the despatch referred to love.
The suggested rate of on the annusl
valuation brings in for the year 1929, as you will see from the figures quote, slightly less than the average contribut-
1927, and 1928
ion for the years 1926 and considerably less than that
1926, and 1927.
for the years 1925,677. Although I consider that a substant- ial deduction should properly be made from the revenue now assessed for military contribution and that the averages mentioned above might therefore be regarded as being too high to be taken as the basis for a new method of assessment,
I suggest for your consideration, in consultation with Sir
Cecil Clementi that it might be worth while for ti
Goverment to agree to a contribution on a 124 basis if by
that means a permanent settlement could be obtained.
Military contribution if assessed at 12 on the annual ve luation of the previous year would have amounted
as follows:-
THE RIGHT HONOURABLE
+ho. C. 52802/252 NO
LIMUMITANA CCZONEL 1.0.K.S. ALERT, M.P.,
efince C
- Gp. 6, 131/2963. 24. 5/34. M. & S.
$2,768,494
3,410,983
3,499,779
3,627,055
3,799,431.
W. T. Southown,
I have the honour to be,
Your most obedient bumible servant
10.D. Southosh.
Officer Administering the Goverment.
28 [No.9]
52802/261
N● CONFIDERIAI (1) )
RECEIVED
30 AUG 1928
COL. OFFIOL
GOVERNMENT HOUSE,
HONGKONG,
20th July, 1920.
1/22459/21
With reference to your despatch. No.421 of
loth Decaber, 1926, and my telogram of 24th July, 192,
regarding the military contribution payable by this Colony,
I have the honour to suit for your informacion the
the contribution in respect of any year should be a certain porcentage of the annual valuation made during the previous
roby to 40.1ollowing figures in saport of the roposal that in future
The military contribution paid in respect of
the last three years and the estimated contribution calculat-
ed on the existing basis for the current year are :-
1928 (Estimated)
34,170,249.87
3,484,772.55
3,642,041.80
5,662,650.00
the average contribution for 1925, 1926, and 1927 being
$3,835,021.55 and for 1926, 1927, and 1928 $6,665,146.04.
The table of annual valuations marc during
the years 1924 onwards is as follows:-
THE RIGHT HONOURABLE
LIEUTENANT COLONEL 1.0.K.S. ALRY, M.P.,
+ P. 22459/26.
+C. 52862/2: [NC. 7): net printed
Gp.6 131/2963. 24. 8/34/m.4's.
DAE-/29033/11
Tree/141436/12
3357/4/21
$22,147,951
27,287,862
27,998,257
29,016,439
50,395,447
and the military contribution based on 12 of the annual valuation made during the previous year would be:-
$2,657,754
3,274,543
3,359,788
3,481,973
3,647,454.
The three years prior to 1926 were for this Colony, years of plenty while the immediate future seems likely to be, for some years to come, one of difficulty. The surplus funds accumulated in the last decade are becoming exhausted and recourse is now being made to loans for
financing urgent public works. There have previously been many requests for consideration with a view to reduction of the contribution and I would refer you to Sir F. Lugards
ti despatch of 3rd August, 1911, asking for relief over certain
In Mr. Harcourt's Confidential despatch of 17th May, + 1912, it was stated that the question of military contribut- ion paid by the Eastern Colonies would be further considered and that a Committee had been appointed to enquire into the operation of the methods upon which the military contributions
In r. Winston
paid by Crown Colonies were being assessed. Churchill's despatch No.233 of 15th August, 1921, it was
stated that the Committee reported to the Treasury in 1914 but the war intervened to prevent any further action and the matter has since been in abeyance.
+ + ho 29083/ 11.
+ ho. 14436/12. & ho. 33574/21
The hope of relief through the deliberations
of this Committee now no longer exists, and it is therefore necessary again to bring before your attention certain points, over which you will no doubt agree that relief is justified and that if the proposed new method of assessment does not meet with the approval of the Treasury certain modifications of the existing practice are necessary and long overdue.
The existing Ordinance No.1 of 1901 (The Defence Contribution Ordinance No.1 of 1901) is not
altogether satisfactory, and various differences of opinion frequently arise. In the first place Colonial revenuc includes the gross receipts from all sources of revenue,
but does not include proceeds of land sales. Contributions
to the Widows' and Orphans' Pension Scheme and sale of
condemned stores have also been excluded and only the net
receipts from the Opium Monopoly are assessable. There is
also the question which has recently arisen as to whether
military contribution should be paid on the increase in the
book values of sterling securities, when sold, owing to the
fall in exchange. These securities form part of the surplus
balance of the Colony, they are due greatly to proceeds of
land sales, and may be considered as part of the Colony's
capital. Under Colonial Regulation 309 the "profit" has to
be carried to Current Revenue. It is not considered that
any such increased dollar value of sterling securities is revenue for the purposes of the Defence Contribution
Ordinance, though it may be necessary according to Colonial
Regulations, which do not deal specifically with exchange
any difficulties, to place difference on the revenue or
expenditure side of the accounts.
Freas.20008/11
Section 3 of the Ordinance is now out of date,
in so far as in the last paragraph the percentage of four
per cent is taken/ The Colony's previous loans are fund ed 2t 31 enant
and 4 at the time the Ordinance was drafted, was a
proper percentage to include interest and sinking fund on loans. Times have now altered and six per cent would now be more accurate and should be taken for all expenditure from
revenue since the beginning of 1915.
Under this Ordinance relief is given in the case of Kailways and telephones and other productive under-
takings of a similar character, and in Mr. Harcourt's despatch No.250 of 19th August, 1911, a request was made
that in the event of reproductive undertakings other than
Railways or Telephones, the principle of assessment of net
receipts shall not be extended to them without previous
reference to the Secretary of State. Under this clause I
shall be compelled to press, if the Treasury will not agree
to the new proposed method of assessment, that various
further undertakings be included among those upon thich only
net receipts are taken for calculation of Xilitary
Contribution. I refer for example to the following:-
(a) Wireless Telegraphy. This obviously canes under the
heading Telephones and similar undertakings'
"not really" quotation
(b) Waterworks. These are productive undertakings, and
the Colony has now to invest large sums in such
undertakings.
(c) Aerodrome. This is as necessary for transit by air
as is a Kailway station for transit by rail. (d) Harbour Dredging. Allowances should be made for
interest on loan or revenue used on capital
expenditure.
+ No. 26608/1
(e) Post Office operations.
(f) Ferries. The question of establishing a vehicular
ferry across the harbour is under consideration.
(g) Operations which might properly be charged to
municipal rates.
It is sought to avoid raising difficult questions of this nature by the suggestion for the new method of assessing the military contribution; and at the same time
the existence of such claims for withdrawing revenue from the
military contribution assessment providės good reason for accepting the rate of 12 for future assessments in accordance
Twelve with the new scheme, in preference to any higher rate. 12
would provide at least as large a sum as His Majesty's
Government is entitled to expect if the present system were
worked in a way considered equitable by this Government.
I have the honour to be,
Your most obedient hurible servant.
w. I Southown, Mo.d. Southosh.
Officer Administering the Government.
REJEIVED
3 AUSTOED
L. CFFICEY
TELEGRAM from the Officer Administering the Government of
Hong Kong to the Secretary of State for the Colonies.
(Dated 24th August Received Colonial Office 6.10.a.m.
24th August,
-30062/27;
Your despatch of 12th March 1928 Confidential.
I have consulted the Unofficial Members of the Legislative
Council who unanimously recommend that refund of
£114, 317.18.9 should not be waived (vide paragraph 6 of
War Office letter of 8th December 1927) I fully concur.
I telegraph this information in case you should be dis-
cussing with Clementi.
Despatch follows.
10th July, 1928.
Dear Sir Cecil Clementi,
As arranged, I send you the enclosed copy of the
letter we sent to the Colonial Office last December, copy of which I believe they forwarded to Hong Kong in March, on the subject of the overpayment of £114,000 between 1917
and 1919.
I was naturally sorry to learn from you that an unfavourable reply from the Colony might be anticipated.
In view of the possibility, referred to in our
conversation, that a question of waiving the refund of this amount might be considered at a later date in connection with the heavy Works expenditure which the War Office will have to incur if H.M. Government decided upon a substantial increase in the garrison of Hong Kong, it might be well for a decision on the question to be deferred for the present. Perhaps you would be disposed to make
a suggestion to the Colonial Office in this sense?
Yours sincerely,
Sir Cecil Clementi, K.C.M.G., etc.
Abrorland
119/Abroad/745 (F.1.)
6th December, 1927.
With reference to your letter of September 7th,
No. 30212/27, transmitting a copy of despatches from the
Government of Hong Kong, I am commanded by the Army Council
to inform you that they accept the view that the scheme for
removing the Military Establishments postponed in 1925 on
account of the circumstances of the Colony, should now be
abandoned, owing to the difficulty of obtaining suitable
sites for reprovision and because it is now considered that
the defence needs of Hong Kong require the continuance of the
Military Barracks in their present positions.
In these circumstances the Council agree that
the special Reprovision Account is no longer necessary and
that it should be closed. The disposal of the credit to
the War Department of the $235,217.00 will be dealt with in
a separate communication.
As regards the £114,317.18.9. which is entered
to the credit of the Colonial Government representing the
overpayment of military contributions referred to above, I
am to ask you to recall the history of this sum. It owed
its origin to the fact that during the years of the war,
1917-18 and 1918-19, the payments of the Colony, which were
made on the basis of 20% of the revenue at a time when the
revenue (expressed in sterling) had experienced a sharp rise,
exceeded appreciably the cost of the garrison, which was
simultaneously low. The overpayments were brought to notice
in War Office letter 10/2982 of 2nd March, 1920, to the
Colonial Office, and at the same time attention was invited
to the letter from the Governor of Hong Kong, dated 4th May,
1917, in which it was stated that it was the intention of
the Members of the Legislative Council to place any surplus
The Under Secretary of State,
Colonial Offiče,
revenue there might be at the disposal of His Majesty's Government for war purposes. It was accordingly suggested
that it might be the desire of the Legislative Council to treat this war payment as a contribution towards the cost
of the war and to waive refund.
At the time of the receipt of the War Office
letter (which was forwarded by your Department to Hong Kong)|
the Colonial Government was much exercised over the re-
distribution of military sites in the Colony, which the Governor described in the confidential despatch of 17th July, 1920, not only as "a matter of urgency'' but as "vitally important ... to the Colony". He therefore proposed that
the refund of the over-paid contribution should be
considered in that connection, and stated that if the Army
Council were ready to shew a reasonable spirit in the
matter it was quite possible that he could persuade the
unofficial Members of the Legislative Council to waive the
refund of the overpayment. The Army Council were
satisfied to leave the matter there for the time being.
Since that date a number of fresh circumstances
have arisen which have placed the question of the military
lands in the quite different position stated in the first
paragraph of this letter. It is not necessary to rehearse
the history of this matter, but the fact that the
negotiations were brought to the verge of completion is
evidence (if evidence were required) of the display by the
Council of that reasonable spirit which the Governor in
1920 invited.
The Council therefore trust that the Secretary
of State will be ready to propose to the present Governor
that he should follow out the line indicated by his
predecessor in the despatch quoted above, and use his
influence to persuade the Legislative Council to waive the
In this connexion they would suggest that the
Colony have not in fact at any time counted on the repayment
of the overpaid contribution, and that, had they not desired
to utilise it in order to press their claims to the military
lands, they would have been pleased to waive repayment in the
first instance. The War Office have been so much persuaded
of the Colony's liberal attitude that, after keeping the sum
in a suspense account for some time, they surrendered it to
the Exchequer, and it was finally brought to account in aid
of the revenue of a past year. If repayment is now to be
made, it will form an actual addition to the liabilities to
be met by the British taxpayer.
Further, I am again to invite attention to the
fact adverted to in the War Office letter of 20th September,
1921, that for the year immediately following those in which
the overpayments were made, the cost of the garrison
exceeded by over a quarter of a million (more than twice the
sum in question) the contribution received from the Colony.
This position has been repeated during the succeeding years,
in which the portion of the cost falling as
a final charge
upon Army Votes has only in one year fallen below £200,000.
In referring to this fact the Council fully recognise that
the Colony have loyally carried out their engagements and
have contributed substantial sums to the relief of the
British taxpayer, but they would suggest that a full
recognition of the share borne also by Army Funds is not
irrelevant to the question of the refund of a contribution
overpaid in very different circumstances nearly ten years
Your obedient Servant,
A.E. WIDD OWS.
Bickle $73
Mr. E. J. Harding.
Sir C. Struchey.
Sir J. Shuckburgh.
Sir G. Grindle.
Sir C. Davis.
Sir S. Wilson.
Mr. Ormsby-Gore.
Lord Lovat.
Mr. Amery.
HONG KONG
52082/1928 Hong Kong
(32212/27)
Downing Street,
12 March, 1928
I have, ec., to refer to my
Confidential despatch No. 3 of the
6th September 1927, regarding the
abandonment of the "Murray Barracks
Scheme" and to transmit to you for
Confidential
your consideration, the accompany ing
Fr. W.0. 8.12. 27
To W.0. 17.1.28
• 10 242-23
54 (30062/27)
780062/17.
30062/27 Nos
copy of correspondence with the War
Office relating to the sum of £114,317
18. 9. referred to in your Conf.
despatch of the 13th July 1927, over-
paid as military contribution. It is
understood, semi-officially, that some
time may elapse before the further
communication referred to in the
letter from the War Office of the 8th
December 1927 can be made, and that
the Army Council would like that letter
to be brought before your Government
without delay.
In informing the Army C. that
a copy of the letter in question will
be sent to you for your consideration,
I have stated that in view of the very
difficult financial position of Hong
Kong, a position altogether different
from that in which the Colony stood
when it was suggested that repayment
of the sum referred to should be waived
a means of arriving at an early
settlement of other outstanding questions,
I regret that I gd not see my way to
complying with the request in para. 6 of
the letter.
I have, etc
(Signed) L. S. AMERY
52082/1928 Hong Kong.
Butes 57.
Mr. E. J. Harding.
Sir C. Strachey.
Sir J. Shuckburgh.
Sir G. Grindle.
Sir C. Davis.
Sir S. Wilson.
Mr. Ormsby-Gore.
Lord Lovat.
Mr. Amery.
THE U.S. OF S.
WAR OFFICE.
(J- 30062/27)
Copy I + incl. Gur. UF.
ref. 2 mo
m2 30312/27
Downing Street
12 March, 1928.
With further reference to your
letter of the 8th December 1927, 119/
Abroad/745 (F.1.) regarding the scheme
for removing the Military Establishments
in Hong Kong, I am, etc., to state
that it is understood, semi-officially,
that some time may elapse before
the further communication referred to
in para. 2 of that letter can be made
and that the Army Council would like
the letter to be brought before the
Colonial Government without delay. In
the circumstances a copy is being sent
to the Governor forthwith for his
consideration.
In view of the very difficult
financial position prevailing in Hong
Kong, a position altogether different
from that in which the Colony stood
when it was first suggested that the
sum of £114,317.18.9. overpaid as
military contribution should be waived
as a means of arriving at an early
settlement of other outstanding ques-
the S. of S. regrets that he
does not see his way to complying with
the request in para. 6 of the letter
under reference.
I am to add that the S. of S.
has learnt with surprise that the sum
referred to in the preceding paragraph has
actually been surrendered to the Exchequer
without prior consultation be this Depart-
that it has been finally
ment and brought to account.
(Signed) G. GRINDLE
Tel. No.-Victoria 9400.
Any further communication on this subject should be addressed to:-
The Under-Secretary of State,
The War Office,
London, S.W.1,
and the following number quoted.
16/Estimates/448 (F.1.)
FOR DISA
THE WAR OFFICE,
RECEIVED
25 FED 1928 COL.OFFISE
LONDON, S.W.1.
24 February, 1928.
30062/27
З году врод
I am commanded by the Army Council to advert to War Office letter 16/Estimat es/330 (F.1.) of 20th January, 1927, relative to the Military Contribution payable by the Colony of Hong Kong.
It will be seen from Statement C enclosed, that the contribution based on the actual revenue of the Colony in respect of the financial year 1st April, 1925, to 31st March, 1926, amounted to £462,426 as compared with the provisional contribution of £475,575 notified in the letter mentioned above. The cost of the garrison for that year therefore exceeded the amount of the contribution by £277,144 (vide Statement D enclosed).
With regard to the financial year 1st April, 1926, to 31st March, 1927, I am to send you the enclosed statements (marked A and B) showing respectively the cost of the garrison and the amount of the Military Contribution (Provisional) based on the estimated revenue in respect of that year.
It will be seen that the cost of the garrison exceeded the provisional contribution by £325,171.
The Under Secretary of State,
Colonial Office,
Your obedient Servant,
At buillows
16/Esmates/448 (F.1.)
STATEMENT A.
HONG KONG.
COST OF THE GARRISON 1926/27.
Pay etc. of the Army.
£ 204,375
Medical Services.
Educational Establishments.
Quartering.
Sea Transport.
Supplies, Road Transport and Remounts.
Clothing.
General Stores.
Warlike and Engineer Technical Stores.
Works Buildings and Lands.
Miscellaneous Effective Services.
Home Effective Charges.
Non-Effective Charges.
Total cost of Garrison.
Contribution (provisional in respect
of the year 1926/27 (vide Statement B).
Amount by which the cost of the garrison
exceeded the amount of the provisional contribution.
The War Office.
16/Estimates/448 (F.1.)
STATEMENT B.
HONG KONG MILITARY CONTRIBUTION 1926/27 (PROVISIONAL).
Contribution (based on 20%
of the Revenue) in respect of the calendar year 1926 (net).
3,484,772.33
391,201.18. 4.
Three fourths of this amount
representing the
contribution in respect of the period 1st April to 31st December 1926.
2,613,579.25
293,401. 8.
(Based on 20% of estimated
revenue)
January 1927
February 1927
March 1927
The War Office.
312,943.50 312,943.50 312,943.50
30,316. 8.
30,968. 7.
32,272. 6.
386,958.10.
16/Estimates/448 (F.1.)
STATEMENT C
HONG KONG MILITARY CONTRIBUTION 1925/26.
Contribution (based on 20% of Actual Revenue) in respect of calendar year 1925.
4,178,249.87
486,167. 19. 7.
Contribution (based on 20% of Actual Revenue) in respect of calendar year 1926.
3,484,772.33
391,201. 18. 4.
Three fourths of (1)
representing the contribution
in respect of the period April to December 1925.
One fourth of (2) representing
the contribution in
respect of the period
3,133,687.40
364,625. 19. 8.
January to March 1926.
871,193.08
97,800. 9. 7.
Contribution April 1925 to
March 1925
4,004,880.48
462,426. 9.
The War Office.
16/Estimates/448 (F.1.)
STATEMENT D.
HONG KONG MILITARY CONTRIBUTION 1925/26.
Comparison of cost of Garrison 1925/26 with the contribution
received in respect of that year.
Net cost of Garrison 1925/26.
Contribution in respect of 1925/26
(vide Statement C herewith).
Amount by which the cost of the
Garrison exceeded the amount of the Contribution.
739,570. 0. 0.
462,426. 9. 3.
277,143. 10. 9.
The War Office.
- Jasis had been adopted earlier but it must be
remembered that if the claims for relief which Hong Kong
are not putting forward had been conceded earlier, the
contribution would have been considerably less.
You will
see from the Hong Kong despatch of the 1st of November,
X. 1928, that the estimated deductions amount to something
like a third of the total tribution, so that you would
have been decidedly worse off if these had been made. Moreover it must be remembered that the valuation increased
less rapidly than the aggregate revenue during the dis- turbance of prices in the war years owing to the natural slowness with which house and land rents adjusted themselves
to the new level of prices In the last three or four
years you will observe that the assessment has risen although the revenue has fallen, and looking at the pre- war years only the two systems give almost identical figures ($17,800,000 and $17,500,000 respectively). It is dangerous, therefore, to lay too much stress on a
comparison which includes the war years.
(2) I do not think there is very muchin this fear.
1 It is, of course, obvious that rents in Kowloon, which is
undeveloped