authorities when it again becomes possible for them to
resume control of the affairs of the University. Since
then various other suggestions have been put forward through the Embassy at Chungking, for further grants to Chinese Universities at which Hong Kong students have been accommodated,
but Morse has not felt able to agree to grants for these
In purposes being met from Hong Kong University funds.
down turning/these further proposals Morse has, we think quite
properly, taken the line that earlier grants were made to
meet immediate needs during a period of acute emergency but
that now that conditions have become relatively stabilized
for the time being, there is no longer the same justification
for drawing on Hong Kong University funds for such purposes.
In considering any proposals for the use of Hong Kong University funds, Morse feels, (and we entirely agree with him),
that he has to keep in mind the fact that the University has
very considerable sterling liabilities as regards salaries and
Provident Fund commitments to the European members of the
hiversity staff now in Japanese hands. At a meeting which we
had with Morse a few weeks ago, at which Scott of the Foreign Officè was also present, Morse produced figures to show that by the end of the year the known liabilities will exceed whatever
sterling assets are then likely to be available. In addition he pointed out that there are also dollar liabilities to the
Asiatic staff the total of which it is at present impossible to
Ostimate.
In the circumstances Morse has represented strongly that
he would not be justified in taking upon himself the personal
responsibility for making available for the purpose proposed in the
Foreign Office letter of the 17th of July, the interest on the
invested University funds which are now held by the Bank, unless
he could be given a guarantee that the liabilities of the
University would be met from Public Funds. We in the Colonial
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