Page 48 Departments concerned are content to accept the agreement regarding the extra units which the Governor has now felt able to give, there seems little point in delaying the putting in hand of preparations for the move of the units to Hong Kong pending another full-scale discussion of the matter in Defence Committee. In the remit at (205) opposite the Chancellor of the Exchaquer was asked to take the matter further in consultation with the Secretary of State and the Minister of Defence and Mr. Campbell felt that he might well be prepared to agree that the matter should now be settled on the basis accepted by the Governor and the solution reached reported to the Defence Committee at some subsequent meeting. If this procedure is acceptable the S. of S. will no doubt wish to write at an early date to the Chancellor and I attach opposite a brief draft letter.
Allandry
A. J. Fairclough.
20.5.58.
Now that the Governor of Hong Kong, at (239), has given the assurance which was contained in para. 2 of 237 we are in no position to carry on the fight about paying for the two extra units on the conditions relating to re-provisioning and compensation which the Governor suggested in his original telegram at (226). The effect of this latest concession by the Governor is precisely as Mr. Fairclough has set out, and the passage marked 'A' overlead in para. 2 indicates the effect of the telegram at (239).
2. I have spoken to Mr. Radice at the Treasury and told him that we would propose, in order to save time, to clear the matter up by a minute to the Chancellor of the Exchequer, and he is perfectly agreeable to this being done. Mr. Fairclough has drafted the minute opposite.
3. As regards the arrival of the extra units, the War Office told me that we cannot have them until the September boat, which will arrive in the Colony on the 8th October. This arrival, taken with the move of the 1 Loyals from Singapore to Hong Kong on September 15th, will give the Governor timely reinforcement at his most tricky period.
4. I have told Mr. Radice that our Secretary of State would lend his support to the Governor of Hong Kong in the subsequent land negotiations on the lines which the Governor originally proposed in his telegram at (226). I don't see how the Treasury can demur at this, but there is no need to make an issue of it in any case at the present.
Alamann
(A. Campbell) 20th May, 1958
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