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Cypher/Cat A
IMMEDIATE HONG KONG TO COMMONWEALTH OFFICE
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ECLIVED IN ARCHINDI)19.63
187
17 NOV/967
Tel. No. 1698
16 November, 1967
11/14/1
SECRET
Addressed to Commonwealth Office telegram No. 1698 of 16 November.
Repeated for information to Singapore and Washington.
For Galsworthy.
8) Mr. telegram 1691: Hong Kong horder.
Chinese have now gone quite a long way in showing what it is that they are demanding. A number of difficult points are outstanding, but there still seems some prospect of negotiating a settlement of sorts on each of them, although the final result is not likely to be very palatable.
20
A major difficulty is question of payment to peasants for loss of crops. Chinese negotiators obviously attach major importance to this as a means of keeping the peasants quiet (which they may very well be finding difficult). We obviously cannot give way on the question of principle and agree to pay compensation as of right, as this would amount to an admission of guilt on our part. But it might be possible to get round the difficulty by making an offer, on conditions, of a payment to the commune involved without specifying the precise considerations in respect of which payment was being made. Following are possible lines of a statement:-
'The bridge was closed by the British side in consequence of certain actions taken in British territory by persons from the Chinese side of the border. Nevertheless, in the interests of reaching a solution to problems existing in the Border Area and in the interest of restoring normal conditions . along the border, the British side are prepared to make a pay- ment of 50,000 Hong Kong dollars to the Ho Pei Production Brigade, Fu Hsing commune, on the understanding that no money will be paid to any farmers who took an active part in the abduction of Senior Inspector Knight on 14 October or who had taken part in any other acts of violence in the Border Area.
The sum mentioned is a round off of the figure worked out by the Director of Agriculture as a reasonable estimate of the losses of the peasants in the period between closing the bridge on 14 October and 3 November.
3. Since this is a matter on which Ministers have expressed strong views, I should be grateful if you would let me know if possible before the weekend whether the formula is approved.
/I am
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186 881891
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