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Enclo. No.2.

Enclo. No.3.

that uneasiness regarding political stability in

the Far East has also contributed to this loss of

confidence. This kind of uneasiness is difficult

to dispel without clear and authoritative statements

from Governments. There have, however, during the

last few months, been signs of more settled political policies, which in turn have caused an increase of

confidence in the future of the Colony. We trust

that this confidence will be maintained and that

uneasiness may soon be eliminated from the minds

of investors."

The corresponding reference in paragraph 8 was

also omitted. The other two omissions are the supplementary

confidential chapters entitled "The Cement Industry in Hong Kong" and "Hong Kong Rope Manufacturing Company, Limited". These were not published as they were marked confidential. Copies of them are attached.

2.

The Report is still under consideration and, with one exception, none of the recommendations has been implemented. There will not be time before my departure from the Colony on 17th May to forward to you the comments and recommendations of this Government on the Report, but the

matter will be dealt with in due course by the Officer

Administering the Government.

3.

The exception referred to above deals with Chapter XIII "Tourist Traffic". This chapter was forwarded by the Commission as an interim report in October of last year. On its receipt and with the advice of my Executive

Council, a committee was appointed "to consider the

formation of a Travel Association, and to make recommendations

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