#NOTHING TO BE WRITTEN IN THIS MARGIN
W(B)L 51-7406
SECRET
12. The above arguments undoubtedly have
substance but there are opposing arguments of
equal weight:
(a)
(b)
Acceptance by Hong Kong of the
Governor's proposals would mean an
increase of 50 per cent over the
previous Hong Kong contribution.
The realities of the situation are
such that we are unlikely to obtain
a contribution of more than
£7.5 million per annum unless such a
contribution is imposed and the
consequences of such a course could
be very serious indeed. In
addition to the danger of provoking
disorders in the Colony (and the
Governor could expect little or no
public support on such an issue)1⁄2 it
would undoubtedly embitter relations
between Hong Kong and Her Majesty's
Government for a long time to come
(and those relations are already
under some strain) and would
benefit no one but the local
Communists who would be quick to
make the maximum propaganda use
of the situation that would arise.
RECOMMENDATION.
13. The view of the department is that,
subject to the following condition, the
Governor's proposals represent the best terms
on which we might hope to reach a settlement
with Hong Kong without having to impose a
contribution on the Colony. In order to
safeguard the interests of Her Majesty's
Government as far as possible it is considered
S
7 SECRET
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