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provided a way can be found round the Hong Kong difficukios.

Timing and form of nerotiations

5. The following are our tentative proposals :

We should approach independent countries individually. Inform then of our proposal. Say that we will tako into account the extent of our financial responsibility in regard to ponsions when deciding the amount or aid we can give them. Propose a commutation payment in respect of the post-independence olement of the pensions and, if necessary, offer a loan to finance such a payment. Be prepared to suggest similar commutation payment in respect of quasi-governmental service, if this issue is raised.

Consultation with posts

6.

We ought, at the very least, to advise posts of our intentions some timo before any public announcement is mado and seek advice from then on the best way of handling the negotiations, and averting unhelpful reactions-o.g. domands that wo should meet the pensions of all pre-independence service of both oxpatriates and indigenous officers. In particular Now Delhi and Rawalpindi must be consulted at an appropriate stage of tho exorciso

7. Wo look forward to seeing your draft DVO paper and hope that it will be possible for you to incorporate the above points.

:

(T. J. O'Brien)

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