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impression that H.K. Goverment does not care about the effects of the influx of Chinese refugees in the Colony, especially as they are well aware of what H.M. Government has done for other refugees (including most recently the Hungarians) ia cases which might be thought to have less claim than liong Kong ou our attention, that will be another nail in the coffin. To give you an idea of local feeling on this matter, I enclose a copy of a letter recently received by the Secretary of State from the liong Kong Civic Association, á very moderate organ of publie opinion in the Colony.
3. During his visit to London the Governor made it clear that for local political reasons he would have to be able to demonstrate to informed public opinion in the Colony, and especially to the unofficial members of Legislative Čoune11 and Finance Committee that something practical was being done by the outside world and particularly by H.k. Government. If the unofficials felt that n., Goverment was doing something practical for hong kong, they would accept the lack of assis- tance from the United Nations (which is mentioned again below) with a good grace; but if they thought that they were getting no help or consideration from either the U.. or the U.l., they would become critical and unmanageable. The most likely consequ ace would be that the Finance Committee, in which there is an unofficial majority, would insist on recommending to the Legislative Council that the current defence contribution of £1 million a year should be diverted to squatter resettle- ment in the Colony; that would lead to unfortunate speeches in the Legislative Council and public controversy generally in Hong Kong, to the detriment of their relations with and confidence in 8.). Government, and to trouble with M.P.s and others here. These undesirable consequences would only be aggravated if the Governor were obliged to use his reserve pozers to prevent any diversioa of the defence contriution to other heads of expenditure.
We therefore have still to find solutions to the political problems of producing a gesture which will maintain local confidence in X.M. Government and of securing the co-operation of unofficials in the Colony, and particularly of the Finance Committee of the Legislative Coune 11.
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