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attitude for years to come.. The goodwill of the unofficials will bedome increasingly important to us in Hong Kong, especially if our political difficulties. with China, of which the recent Kowloon incident provided an example, increase and intensify. Indeed, we might find from this point of view that whatever assistance is given now will prove to have been cheap at the price.
6. Bearing these consideratious in mind, the proposals which we should like to put forward for Hong Kong for sympathetic consideration are:
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(1) The waiver by H.M.G. of the repayment of the
£3,250,000 which has been advanced to Hong Kong by way of loans in aid of administration. This would involve the retention by Hong Kong of receipts from the sale of relier supplies, purobased frem liong Kong Goverment funds with the assistance of the "loan in aid of administration".
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(2) A free grant to Hong Kong of (say) £5,000,000
provided that liong Kong accepts as a final charge against Hong Kong Government's funda the various items of expenditure on the attached list which the Goveruor contends should be. borne on U.K. funda.
(3) A grant to the Hong Kong Government to be
passed on to the liong Kong University ta meet or assist in meeting the cost of rehabilitating the University.
(4) An