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3.
GENERAL DRIFT OF CLAGUE'S READING OF SITUATION
ON TWO BRIEF EXCHANGES WITH HADDON-CAVE - IS THAT:
(A) H.K.S.G. CONSIDER JAPANESE BID VERY GOOD. (B)
BASED
THEY REGARD CEILING PRICE AS MORE IMPORTANT THAN
NO GUARANTEE.
(C) IF BRITISH (ITALIAN) GROUP CANNOT MEET THIS THEN
THEY WILL HAVE TO ''BUY'' H.K.S.G. OFF THE JAPANESE BID.
(D) HADDON-CAVE WANTS AN EARLY MEANINGFUL INDICATION
THAT BRITISH (ITALIAN) GROUP ARE ABLE TO COMPETE WITH THE
JAPANESE PRE-EMPTIVE.
(E) HE IS USING JAPANESE BID DESPITE THE SHORTCOMING
AS MEANS OF ENSURING HE DOES GET ''EFFECTIVE'' BIDS FROM
US OR OTHERS WHICH MIGHT NOT OTHERWISE HAVE BEEN FORTHCOMING.
4. LEVER, ON CLAGUE'S BEHALF, HAS ON TWO OR THREE OCCASIONS EXPRESSED TO ME THE HALF-HOPE AND HALF-EXPECTATION THAT HONG KONG GOVERNMENT ARE BEING PULLED UP ON POLITICAL NET FOR ACCEPTING A GUARANTEE REQUIREMENT I HAVE NOT COMMENTED.
SENT AT 26/1022Z HH K
RCVD AT 26/1022Z LW