(3) the possibility that in a war
with Japan, we might not be
able to hold Hong Kong and the
New Territories.
The Foreign Office went on to say
that an outright sale of the New Territories
is out of the question while the Chinese war
slogan is No alienation of sovereignty over
Chinese territory.
remains There when the
possibility of the extension of the lease,
and their suggestion was that we should first
ask the Governor to elaborate his ideas and
that we should then have an Inter-Departmental
discussion with the Treasury, Defence Depts
and the Foreign Office.
The Governor accordingly elaborated
his ideas in his despatch of 11th June
(No.7 in the file) and had no difficulty in
pointing out the very great disadvantages to
which Hong Kong will be subjected if the New
Territories were severed from the control of
the Government of the Colony.
He suggested
£20 million as not too great a sum for us to
were pay for an outright purchase.
If it is to
be a question of extending the lease, a period
of 100 years would be the shortest period
worth considering.
At the same time he explained to us
that the figure of £20 million was named
because he understood that this was the sum
needed by China at the present moment to
enable