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3.

to be roquired by Government on the transfor

of the services in question and to contribute

in a proportion to be agrood upon towards any

pension or gratuity which may become payable

to such staff.

(e) By way of compensation for loss of present and

prospective revenue the Company to pay to the

Government a royalty on all wireless messages

sont and received by the Company in the

Colony, at a rato per word to be agreed upon.

(f) The Company to undertake to afford the

Colony at all times both cable and wireless

facilities not inferior to those enjoyed by

ports of similar size or importance to Hong

Kong in other parts of the British Empire,

If these proposals meet with Your Lordship's

approval, I shall be glad to receive instructions as to the

further conduct of negotiations for the transfer to tho

Company of this section of the Colony's wiroless service.

4.

I may add that this Government proposes to

reserve to itself all rights in connection with Wireless

Telophony.

5.

In connection with the transfer of staff to

the Company I shall be glad to know what arrangements

were made regarding the transfer to the Company of officers

of the British Government in the United Kingdom.

I have, etc.,

(Signed) W.T. SOUTHORN.

Officer Administering the

Government.

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