and abandoning our responsibility for the Colony and locally this

would be contrasted with the commitment to Hong Kong reaffirmed in

Parliament on 27th March. If such an impression gained ground the

ability of the police and the garrison to deter a challenge to

law and order would be undermined, and disruptive elements in the

Colony would be encouraged.

12.

The Governor is however prepared to press the Hong Kong Government

to make a substantial increase in their contribution and believes that

he has a reasonable chance of obtaining agreement to a figure of

£17 million a year, though he expects a struggle. This would double

the present Hong Kong contribution. It would fall somewhat short of

50 per cent of the total cost if the reductions suggested by the

Governor were accepted, and he recognises that presentationally

there would be advantage if it could be said that the costs were being

divided equally between ourselves and Hong Kong, as compared with a

present Hong Kong contribution amounting to only about 20 per cent

of the total.

Comment

13. We consider that the Governor has made out a strong case against

seeking total repayment from Hong Kong, and that his view of the

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