-2-
The
(2) Persons born in the territory during the continuance of the Lease must be regarded as British subjects, In 1937 he question was examined by the Legal Adviser to the Foreign office, who discussed whether, during the terms of the lease, the sovereignty lay with the lessur or the lessee. He held that the theoretical sovereignty remains with the lessor. Convention of 1898 made no provision for any retransfer to Chinese sovereignty at the end of the lease, and it is clear that on the face of the Convention the leased territory will automatically revert to China when the term is up, unless some other arrangement is reached. It is not a case of a cession coupled with an obligation to retransfer at the end of a period; if it were, the sovereignty would be with the lessee, but he would be obliged to recede the territory at the end of the term. As it is, in theory there is a genuine lease, the residual sovereignty remains with the lessor, and when the term is up he automatically resumes full control. While this is the position in theory, in practice, the Legal Adviser pointed out, practically the reverse has occurred, and the territory has been treated as if it had been held under a cession coupled with an obligation to retransfer at the end of a tem. Third Powers have regarded the leased territory as under the sovereignty of the lessee. Some authorities have written of such leases as if they were alienations disguised in order to spare the susceptibilities of the granting Power.
37.
However this may be, the Colonial Government have always recognised that, unless some fresh agreement with the Chinese Government is made in the meantime, the New Territories In recent yeɛra will have to be surrendered in the year 1997. the question of the position of commercial and industrial interests established in the New Territories has attracted increasing attention.
8 far back as 1928 Sir C. Clementi pointed out that firım would only take up land for large undertakings if granted leases beyond and he the period for which the New Territories had been leased; urged that, in the interests of the Colony, he should be authorised to grant leases to individuals for periods extending beyond 1997.
It was pointed The dangers of such a policy were recognised. out by the Foreign Office representative, to discuss the proposal, that such a policy would be likely to encourage the belief that we intended to retain the New Territories in spite of our obligation to return them, and would arouse hostile propaganda throughout China, besides involving the risk of giving lessees a claim against His Majesty's Government if it were found impossible in the event to secure them in their rights under such leases.
at a conference convened
58. It was therefore suggested that the Governor should consider, as an alternative, the grant of leases either for short periods renewable at the lessee's option, or for 65 years, renewable at the lessee's option.
39.
In 1931, Sir W. Peel, who succeeded Sir C. Clementi, submitted a memorandum in which he gåve it as his opinion that the retention of the New Territories is necessary to Hong Kong, both on economic and strategical grounds. Apart from other considerations, he pointed out that Hong Kong is dependent while the military for ite water supply on the New Territories;
defence of the Colony requires the retention of the Territories, of which the present frontier provides the only readily defensible line against attack from the mainland. These problems have not, however, formed the subject of a conclusive statement by service authorities.
40.
In the succeeding years, increasing congestion in Hong Kong and Kowloon led to the continued extension of commercial and industrial establishments, as well as to the growth of the And there was residential population, in the New Territories; growing anxiety in the Colony as to the future of the Territories. sir G. Northcote, who had succeeded Sir. Peel as Governor,
/submitted