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with injuries, two serious, were discovered amongst those present. There is little doubt that these raids, in which military participation has been confined to cordon duties, have made the Communist leadership and rank and file extremely nervous and the morale of the Communists, which had been revived following the Sha Tau Kok incident, and, what they considered to be the successful hit-and-run tactics on the streets, has now fallen sharply. The police action has also demonstrated to the general public that Government is not afraid to enter Communist premises and intends to do everything necessary to maintain law and order.
3. As regards the general situation our assessment remains as set out in telegrams Nos. 1012 and 1013. The offensive operations referred to in paragraph 2 have served to confuse the opposition and to boost public confidence.
(Encyphered text passed to L.T.C. for repetition
to Peking and POLAD Singapore. Passed to D.S.A.0. for repetition to Washington and as advance copies for Commonwealth Secretary, Far Eastern Dept., Foreign Office, and News Dept., C.0.)
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