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a C.D. & W. grant (in this they are demonstrably correct); in any case it is a fact that H.M.G. have felt unable to contemplate any such development for the time being, though the possibility of development on these lines is not, I understand, absolutely ruled out for the future.
We have here the possibility of an internal conflict within H.M.G. We have the spectacle of the Chancellor of the Exchequer on the one hand, for very natural and estimable reasons, laying emphasis on the development of the University, and of the C.U.G.A.C. on the other hand, for equally estimable reasons, saying that the University should not develop except perhaps for "extra-Colonial reasons" which have in fact been already turned down by H.M.G.! But I do not think we are really faced by such an awful dilemma as would appear from this description of the position. As Mr. Wallace says, the view has been generally expressed in some,quarters that if the Hong Kong University is hot to be developed on a big scale, it should not be revived at all
that
is to say, it should cease to exist. Besides being politically impossible, I am sure that this is wrong. It seems to me that Hong Kong University must certainly be kept in existence for the excellent reason that we may well wish it to extend its influence in China at a later date. This conception may have been shelved for the time being, but we certainly do not want to see it abandoned in these circumstances, I am sure that the right course is to keep the University going and to make it as good a show as possible on the present scale. I should be very surprised if the money provided by the Hong Kong Government and the Chancellor's £250,000 cannot usefully be employed for this purpose; and I think this is the idea which we want to put across to Hong Kong.
Difficulty would have arisen in taking this line if the Treasury had insisted in pursuing the Chancellor's "development" doctrine too far, as necessarily, being "development on a grand scale". We should then have been in for a head on collision, and the only way of resolving the difficulty would have been a further approach to the Chancellor.
I am happy to say, however, that the Treasury have adopted what seems to me to be a perfectly reasonable line, and I think the way is clear for us to go ahead. It may be that the Hong Kong reply will reveal further difficulties, but we can face these if and when they come.
While retaining the substance of Mr. Wallace's drafts I have somewhat altered the wording, and I submit far drafts. The present wording has the concurrence of the Treasury, Since there is no longer any mention of British prestige in the Far East, I hardly think the Foreign Office concurrence is now necessary.
H.T.B
4th June, 1948.
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