NOTHING TO BE written IN THIS MARGIN

Registry No. 4KK, 10/4.

DEPARTMENT

SECURITY CLASSIFICATION PRIORITY MARKINGS

(Date........

* Date and time (G.M.T.) telegram should

reach addressee(s).

Top Secret

Secret

Confidential

Restricted

Unclassified

PRIVACY MARKING

In Confidence

XXX Clatr XbdXXXX

Cypher

Draft Telegram to:-

Governor Hong Kong

No.

(Date)

And to:-

Flastr Immediate Priority-

Routine

[Secur

}

Despatched

"Security classification" -if any

Privacy marking

[ -if any

[Codeword-if any]....

Reimpe

SECRET

]

Addressed to

GOVERNOR, HONG KONG.

telegram .............

(date)

And to

repeated for information to

Saving to

Repeat to:-

Saving to:-

Distribution:-

FILES.

Copies to:-

As for Hong

Kong telegram No. 144 plus

F.P.A.D. A.T.D.

C.C.D.

DEFENCE DEDY

MIPT

DEFENCE CONTRIBUTION

Following is text of reply to Unofficial Members.

Begins.

1.

After most careful study of your Memorandum

& feel unake HMG much regret that theyeah see no re

to alter

the views conveyed to you by me on 19 February.

2/ It is true that in 1966 the UK's balance of

payments problem was a major factor contributing to

the request for an increased defence contribution

from Hong Kong. Since then the UK has been able, as

a result of a number of difficult and sometimes

painful measures, to move to a position of substantial

surplus on current account, with a consequent

improvement in the external financing position. But

this improvement has occurred in the relatively

recent past. The magnitude of the UK financing

problem previously was such that, even though

SECRET

/substantial

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