8.
30
13.
I find no reference in Sir Miles Lampso n's despatch to the possibilities of friction referred to in
Paragraph 38 of the Foreign Office print, but assume from the language of paragraph 22 of his despatch that he would make no distinction between descendants of original Chinese inhabitants of Hong Kong and descendants of subsequent Chinese immigrants. This presupposes that His Majesty's Government will recede from the position that Chinese domiciled in Hong Kong at the time of its cession to the British Crown and their descendants are Eritish subjects only and do not possess dual nationality. While I regret the necessity for this step I shall not be
prepared to oppose it in view of the doubts which have
been expressed as to the validity of that contention and of the impossibility of arriving otherwise at a satisfactory solution of this difficult question.
If the formation of limited liability com-
panies should prove a source of friction, as suggested in paragraph 38 (2) of the Print it may become necessary to consider some form of legislation specifically designed to deal with the difficulty. The abuse of the British Flag on the Inland faters of wang Tung by means of such
companies is already being dealt with.
14. I have to express my regret at the delay
in dealing with this question. The importance of the subject was such that I considered it necessary to work
in close consultation with the Chinese members of Council
Those repeated absences on business from the Colony made
Progress difficult.
I have the honour to be,
Sir,
Your most obedient humble servant,
W.D. Southorh.
Officer Administering the Government.
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