were doing something to help; but, if they felt that Hong Kong was getting no help or consideration from either the United Kingdom or the United Bations, they would almost certainly become critical and unmanageable. The most likely consequence would then be that the Finance Committee, in which there is an unofficial cajority, would insist on recommending to the Legislative Council that the current defence contribution of 81 M. a year should be diverted to Blastter resettlement in the Colony; that would lead to unfortunate speeches in the Legislative Council and public controveray generally in Hong Kong, to the detriment of their relations aith and confidence in der Majesty's dovernment, and to trouble with A.P.8 and others here. n the last resort the Governor could, of courat, une his reserve povera to prevent any diversion of the defence contribution to other hexus of expenditure, but in modern times that is always something to be done only in the vory last resort, and in this cafe it would aggravate all the Andesirable consequences mentioned above.

4.

le you say, the question of stationing two additional units in Bong Bong has been the subject of ministerial disqussions. It is, we understand, not likely to be decided until the Kinister of Defence bas returned from his Sar astern tour. It seems however that in the decision on that subject may lie the solution to our difficulties over the defence contribution. While we and the Governor are prefectly ready to consider the defence contribution as something separate from the refugee problem, as shown above local opinion will not readily do so;

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