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question of finance. I should, in the first place, refer to the fifth paragraph of your letter which does not seem to me to prove conclusively that we must necessarily g back exactly to the 1941 level. If you are prepared to disregard the main tenor of the Committee's recommendations, it would surely be possible to move up towards the 1941 level on a phased programme. Moreover the figure of H.K.4 million to meet the cost of restoration, appears large. It would, I think, be necessary to confirm what scale of restoration this contemplates, particularly since I understand from the Advisory Committee's Report and the previous correspondence that some work has already been done in restoring the buildings. From these two points of view, I do not think that you need feel that the alternatives are restoration at the cost of H.K.4 million and nothing.
6. The Governor recommends that this cost should be granted by U.K. funds. The main argument which you use to justify this, is that the University would provide facilities for students from China which would be of value in Anglo-Chinese relations. As you know, we do not discount this argument in the long term, but we have decided that we cannot contemplate large scale expenditures on the expansion of the University for this purpose at the present juncture. I am afraid that this general argument must, for the time being apply to the more limited objective which will be served by the proposals in your letter. We could not contemplate a grant from the U.K. in order to provide these facilities for the overseas Chinese, and we must, for the present, look at the problem purely in relation to Hong Kong.
7. In relation to Hong Kong, I am afraid we find it very difficult to single out this particular item for special capital assistance from the U.K. As I have said above,
/we
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