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4. I am further to invite attention to the fact that a

policy such as that now followed by the authorities in

Hongkong may well give rise to political and economic

repercussions of an unfortunate character. Concerns such as

the General Motors Corporation are in a position to exert

considerable influence upon the United States Government,

while the latter attach the utmost importance to the

maintenance and development of the valuable motor export trade

upon which now depends to a very large extent the prosperity

of one of the key industries of the United States.

5. Mr. Henderson is of opinion that the present policy

of the Hongkong police amounting as it does to a virtual

exclusion of American commercial chassis - would preclude His

Majesty's Government from replying effectively to any official

representations which might be addressed to them by the United

States Government with a view to remedying the present state

of affairs. In the existing political situation Mr.

Henderson would deprecate this dispute being allowed to

develop into a serious issue with the United States unless some

better defence of the British attitude is available than would

at present appear to be the case.

6. In the light of the above, I am to express the hope

that Lord Passfield may see his way to request the Governor of

Hongkong to reconsider the position described in His Excellency's confidential despatch of March 4th last, and to

explore the possibility of protecting the local motor-bus market by some other method than that employed at the present

time.

Trade.

7.

A copy of this letter is being sent to the Board of

I am,

Sir,

Your obedient Servant

RR

Vant,

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