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I have no wish to exaggerate the seriousness of the quation at the present stage, when the threat to the Colony's Internal urity remains potential rather than actual. Nevertheless, it ppears from the deliberate way in which the campaign is being developed at pro-Communist elements are preparing the ground for a possible tria of strength in the not too distant future. The great advantage of the initiative lies almost entirely in their hands and they can rely upon being able to exploit to advantage any firm counter-action taken against them. Moreover, a decision to force a major issue by no means necessarily depends upon the local situation itself; the instigation of widespread disorders in Hong Kong may well play a part at any time in the general strategy of the C. P. G.

5.

The internal security position has recently been reviewed by the Local Intelligence Committee and its report, which has been approved by the Commander, British Forces and by myself, will shortly reach you. I would, in particular, draw your attention to one of the conclusions in this paper, namely, that the security forces available within the Colony and the planned military reinforcements are not capable of dealing adequately with internal disorders accompanied by simultaneous overt aggression. This factor inevitably limits the degree of strength which can be employed in dealing with internal dis- turbances and thus increases still further the already considerable balance of advantage possessed by our opponents.

GWA: pw

it Cul JK Gardiner RM.

M

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