and to
They
the
city of
Kowloon"
were both occupied on the 16 to
3 Mar
If
On the 15th of June we proposed that We should not permanently go beyond the provisional boundary but that moderate compensation for the expense caused by the disturbances should be demanded from the Chinese government, of which the troops should be withdrawn from Sham Chun, the Foreign Office...
If the 8th June proposal "as regards "The demand for compensation ...of the expense incurred on owing on account to the Chinese resistance to the transfer of the leased territory, that a large Indemnity should be asked for on H.M. Govt "the understanding that H.M. Govt will forego payment of it in whole or in part, provided that satisfaction is given by "the Chinese Govt in other matters". We answered the next day to the effect that "it is anxious to put an end to the expense which is being caused to the colonial government "and which it is hardly probable can be compensation".
We have given chapter & verse for the expenditure and have pressed for and settle-ment the Sham Chun occupation either by keeping or withdrawing from it. We have had uncertain views from the colony as to the desirability of keeping or withdrawing. Also it is decided and a further doubtful issue to determine has been introduced by the military authorities, suggesting that in the bargain we should ask for ownership of a rock on which we have a light-house - the Gap Rock - which should be owned by Great Britain and again suggesting that there is good military camping ground near Sham Chun.
I think we are satisfied that from a military point of view there is no harm in withdrawing from Sham Chun, and it is highly desirable that the question of compensation to be demanded from "the Chinese government should be settled "at an early date: as M. Chamberlain can get the Gap Rock well & if not, there is no great harm.
What the colony gains is complete possession of Kowloon City with regard to which there was a reservation in the Convention of June 98. On the other hand, there is a bill to be paid for a military occupation which was not required in
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