PERSONAL & CONFIDENTIAL
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was that we should do better in the future. The line we took at the meeting on the substance of the issue was that, given the fact that the Canadian team were already almost on their way to Hong Kong the important thing was to send you such instructions as would enable your representatives to pursue the negotiations with some hope of avoiding a breakdown in circumstances which would result in the Canadians immediately imposing a surcharge. We drew also upon the fact that, as I mentioned in paragraph 2 of my message to you contained in F.C.0. telegram No. 538, the Board of Trade are about to enter into some important and delicate negotiations with the Canadians on another issue not connected with Hong Kong. this in mind I said that I was sure that they would not wish gratuitously to have a row with the Canadians on the question of Hong Kong textiles imports and I hoped therefore that they might be prepared to look sympathetically on your demand to be allowed to pursue the negotiations for an extension of the existing restraint agreements.
With
3. At first Hughes who is concerned with the other negotiations which I have mentioned, spoke sympathetically and for a moment I thought that we might get what we wanted. However, the full weight of the Board of Trade effort was then deployed into showing that it really was quite impossible for such instructions to be issued
land given the decisions recently taken by H.M.0. about the tariff also that further contingent decisions had yet to be made) which it was contended would be breached if you were now to be given authority to negotiate further restraint agreements.
They said that in no circumstances could they possibly concede authority to you without referring the issue to the President of the Board of Trade personally, who, I need hardly say, was away on holiday. In these circumstances, and given the time factor involved, I saw no alternative but to accept the impossibility of getting what we would have liked and to accept instructions to you in the form of F.C.O. telegrams Nos. 536 and 537 to you. I hoped that these would at least give you enough to enable your representatives to run over the ground with the Canadians, find out what their position was to be and achieve a post onement of decisions to a date still in advanc of the terminal date (30 September) for the restraint agreements when further talks could be held. I recognised that this would not be satisfactory to you, as I said in my personal message, but it was quite clear that we should not be able to move the Board of Trade from their position until we saw what line the Canadians actually took at the talks in Hong Kong.
(72) 4.
On receipt of your further telegrams Nos. 647 and 648 we met again at once at the Board of Trade, late on the Friday evening. Several points in your telegram No. 647 the Board of Trade would dispute. Moreover they were quite unwilling to concede the authority requested in paragraph 12 of that telegram, but I insisted that they must make some effort in that case to spell out for you the issues of principle on which decisions have still to be taken. Your reply to this further telegram of ours (F.C.O. telegram No.542) contained in Hong Kong telegram No. 652, disputes several matters of commercial policy which lie directly within the Board of Trade's
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PERSON
CONFIDENTIAL