SECRET
Vice verson
4.
c.
✓a.
V
e.
f.
In paragraph 4 we should like to retain some reference to the possibility of the Colony contributing an annually increasing proportion of the cost of its defence: after all the paragraph only purports to say what would be more acceptable here and to ask for the Governor's views.
We suggest that the third sentence and the first part of the fourth should read
"It would be more acceptable here if we could have a provision for annual adjustments to cover pay and price increases so as to maintain the real value of the contribution with possibly a progressive increase of the proportion of the expenditure borne by the Colony I note that a provision to cover pay and price increases was mooted...."
In line 3 on the last page of the draft "an alternative" should rather be "a method"; and in line 4 you might substitute "one" for "a proposal".
In order to emphasise the point that Ministers have yet to consider the problem we suggest that in place of the fourth sentence and the opening words of the fifth in paragraph 5 you should substitute:
"At the same time we fully appreciate the extreme difficulty of securing a contribution greater than what your unofficial advisers will accept as a charge on Hong Kong funds. The whole problem will soon have to be submitted to Ministers and no doubt discussed with you when you are in London. Meanwhile, we should be grateful for an assurance..
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In consequence of the amendment suggested in paragraph 4 you may want to amend the last line of paragraph 5 to read
"hope that you can agree to some method of meeting the point in paragraph 4 above.".
If, as I hope, you can accept the amendments we shall be content for you to write accordingly to the Governor straight away.
5.
I am sending copies of this letter to Gedling and to Goldsmith.
Yours sincerely
Harold Gropin
STRET
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