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some correspondence took place in the local European Press

in which members of the Eurasian Community set out their

objections to the proposed amendment of the law.

2.

Since my return from leave I have had

private conversations with some Chinese which lead me to the

conclusion, which the Secretary for Chinese Affairs has also

arrived at, that it would be impossible to proceed with the

amendment of the law which you have sanctioned without the

outspoken support of the Chinese Members of the Legislative

Council and that such support cannot reasonably be expected

of them in view of the strong feeling which exists even

among the pure Chinese that the alterations of the law would

be derogatory to the prestige of their race. These Chinese

do not gainsay the justice and reasonableness of the pro-

-posed legislation. But the time honoured fear of "loss of

face" is too strong for the modicum of moral courage with

which the Chinaman is endowed.

3.

Two suggestions have in these circum-

-stances been made by the Chinese themselves to overcome the

difficulties of fresh legislation. These are (a) to exclude

all Asiatice from residence at the Peak without the per-

-mission of the Governor-in-Council; and (b) to enact a

general prohibition against residence at the Peak except by

permission of the Governor-in-Council.

Against the first proposition there are

obvious objections, and with the concurrence of the Executive

Council I have decided to recommend to you the adoption of the alternative proposal.

I endlose the draft of a Bill to give

affect to the suggestion which not only for the reasona

Sou

stated in my Despatch Confidential of the 5th. of September

I wish most strongly to recommend to you but for the politic-

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