In any further communication on this subject, please quote
No. F 6735/G.
and address-—
not to any person by name
but to-
'The Under-Secretary of State,"
Foreign Office,
London, S. W.1.
SECRET.
No dift.
Sir,
40 85
FOREIGN OFFICE.
15th November 1935.
46.
47.
I am directed by Secretary Sir Samuel Hoare to refer to your letter No.53560/35 of the 26th October on the subject of the con-
cessionary contract for the Macao Waterworks and the request of
the Chief Manager of the Hong Kong and Shanghai Banking Corporation
for a guarantee from His Majesty's Government of indemnity in the
event of political interference.
2. Up to the middle of April last the position with regard to
Lacao was that fears had been expressed with regard to Japanese
penetration and particularly with regard to Japanese pressure to
secure the contract for the Macao waterworks. The whole question
was referred to the Committee of Imperial Defence Chiefs of Staff
Sub-Committee. Their report dated 25th March recognized the danger
to British interests of Japanese control of Macao but pointed out
that this would be equally disadvantageous to Portugal and
recommended that in the first instance an approach might be made to
the Portuguese Government with a view to that Goverment itself
taking the appropriate steps in the matter. In accordance with the
decision of the Cabinet Sir Victor Wellesley spoke to the Portugue se
Chargé d'Affaires on the above lines on April 10th. At this time
it was known that the Hong Kong and Shanghai Banking Corporation
were unwilling to finance the waterworks contract without a
government guarantee and from the terms of the telegram of April 6
from the Governor of Hong Kong, a copy of which was enclosed in Colonial Office letter 53560/35 of the 8th April, it was inferred
that what Mr Grayburn desired was a financial guarantee to the
extent of one million dollars. None of the communications that
Under-Secretary of State for the Colonies.
reached...
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