views as regards the desirability of retaining possession

of the New Territory at least until the expiry of the lease

in 1997.

B.

On the one hand the lease or

As regards the more remote future I do not feel

able to put forward any useful observations as to what the policy of His Majmiy's Goverment with regard to the Colony of Hongkong and the leased territory should be, and indeed

to do so would be premature,

the New Territory has still more than sixty years to run. On the other hand Chin is at present engaged in a campaign of hostility against anything which she considers infringes

her sovereign rights and any suggestion that the alienation of the New Territory should be perpetuated or extended would certainly arouse the most violent opposition (please see in t is comeation r. Henderson's telerras of uly 2nd, 1989, addressed to me at eihaiwel and paragraph 1. of my telegram Number 384 of July 8th, 1929). In these circumstances ? an

clear that the moment is inopportune for discussing whether His Majesty's Government would desire or be able to retain possession of the leased territory after 1997 and that, unless something should intervene to force this issue won us in the seantime, consideration of it should be postponed.

my avice is to leave well alone and refrain from meeting trouble half way, or giving the Chinese any peg upon which to raise the question.

I have the honour to be,

With the highest respect, ty ford,

Your Lordship's most obedient, humble Servant,

(SGD) MILES W. LAMPSON.

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