vis-a-vis H.M.G.

This gives general cover for the

proposal in paragraph 3 of your telegram to go to

the Legislative Council for recurrent expenditure

Cate

and would if you agreed and could find the money-

give similar cover for capital expenditure to be

charged against Hong Kong Estimates.

4. The following suggestions as to other possible

ways of finding funds may be useful to you:-

(a)

(b)

(c)

(a)

5.

Hong Kong War Memorial Fund, if there is likely to be a balance available after expenditure against the First and Second Schedules under the Ordinance has been met.

of present perproud the mat form pussauds Ilvan There may be certain items/which might perhaps be met from C.D. & W. Funds, thus releasing corresponding amount towards re-establishment of University.

Possible limited assistance from British Council from its foreign expenditure in view of value of University in Sino-British cultural relations. This is being investi- gated, but prospects not good.

Local subscriptions.

In connection with sub-paragraph (d) above,

we have noted paragraph 1 of your telegram; if prospects

are poor, possibly Government dollar for dollar

contribution up to an agreed limit might help.

6. Subject to suggestion in paragraphs 4 and 5

above there seems to be no alternative to meeting

capital grant of $4,000,000 as well as recurrent

deficit from Hong Kong funds.

-

7. I am afraid that the foregoing is very disappointing.

May we assume that you will now discuss the matter further

with Universith Authorities, and put up proposals for

Government assistance towards re-establishing University

on 1941 scale? Perhaps you would like at the same time

to suggest the terms for a public statement regarding

the future of the University to be made simultaneously

here and in Hong Kong.

8.

Figures of annual recurrent expenditure in paragraph 3

of your telegram are close to those in University Advisory

enditure on larger project.

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