!

SECRET

By far the largest single item in the Army Department's account is that relating to the border fence. During his visit to Hong Kong in October Lord Shepherd is on record as having said that we had taken up with the Treasury the question of payment for this item. It is true that we had contemplated taking this course at the time, but in the event we did not do so. We thought it politic to wait until we had some idea of the size and composition of the total bill likely

to be presented by the Ministry of Defence before we decided upon any particular course of action. We shall not approach the Treasury until we receive your reply to this letter. I am afraid that we are not over sanguine about our chancesof success, However, we shall certainly do our best.

(W. S. Carter)

SECRET

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W(B)L 51-74 33

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