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Paragraph ↳ of draft.

This paragraph and the savingram to which it refers are covered by the 0.8.D. Note I attach. Subject to the reservations made in that Note the Colonial Office accepts the proposed salary scales.

5.

Paragraph 7 of draft.

e feel that the Governor gives good reasons for not wishing to insist on acceptance or part of the arrears in serip of the loan and that these reasons should be accepted. se would also accept his view regarding part issue of arrears in Davings Certificates.

I am consulting Palmer on the Governor's request for guidance as to whether, if it proves necessary, it would be in order to make a small further issue of the loan restricted to Government officials. Either Palmer or I will get in touch with you on the point. A reply regarding this can go subsequently to the Governor.

6.

Farsgraph 8 of draft.

zarly implementation of the Commission's proposals is the best way to relieve the existing discontent in Hong Kong and it seems to us, subject to your comments, that we are now in a position to agree to this, having indicated to the Governor the exact points regarding which he must hold his hand.

7.

Paraurach 9 of draft.

The revised proposed announcement is based on the Governor'e draft in his telegram No.1879.

Yours sincerely,

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