The Under Secretary of State.

"

22.1.47.

had placed with Siemens before the war for the extension of our main exchanges. There is pre-selector equipment for some 1600 lines of No.52 system lying here (part of our prewar order) and we are not certain as to what happened to other shipments on their way to us when war broke out in the Far East. This together with other similar problems have to be dealt with and Major Sherry hopes to be able to make a quick trip to London possibly in a month's time - to settle all such matters on the spot. It is not his present intention to take long leave but to return to Hong Kong as soon es possible in order to prepare for getting the business back to normal commercial operating so soon es circumstances allow.

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We immediately notified Siemens Bros. & Co.Ltd., they replied as under:

"e acknowledge receipt of your letter of the 28th

ultimo edvising us of Mr. Farrell's cablegram stating that there is now no urgency for the 2900 lines of automatic equipment and that he wishes a postponement for incorporation at a later date in Kowloon Main extension.

As you are aware, we were asked to make every effort to proceed with the manufacture and deliver this rehabilitation equipment in 12 months if at all possible. The engineering revision was pushed forward and our Manufag- turing Department was advised of the urge noy.

The manufacturing plan was revised to give this

order preference and labour was switched to meet the conditions and deliver as soon as possible. Although we could not guarantee to meet your requirements that the equipment should be ready for shipment by July 1946 we set ourselves this date as a target.

The order formed an integral part in the immediate

post-war programme for the absorption of labour. Its instant removal from the plan cannot be entertained since this would cause a dislocation in the labour position and might result in e fictitious surplus of labour until other work could be hurri ed forward to take its place.

In view of the above, the instant removal of

the order from our Manufacturing Department is definitely excluded. We have, however, given instructions that the urgency no longer exists and every effort must be made to slow down production wherever this is possible without reaction on the labour force.

Under the circumstances it may happen that

some equipment will be ready for shipment

before

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