We take it that we should now telegraph

to the Acting Governor of Hong Kong confirming that

paragraph 6of the Joint Statement on Lend/Lease

applies to this case, and that the financial liability

involved will therefore rest with H.M. G. We also

propose to authorise the sale of the land in question

by private treaty. We should be grateful therefore

if you would let us know whether you agree with the

above, and what special instructions, if any, ou

would wish us to include in the telegram to the

Acting Governor regarding the terms of the sale, and

is accepha the procedure to be followed. If the suggestion t

rentals for the full terms of the lease should be paid

evented, you will no doubt wish us to ask

up now

the Acting Governor of Hong Kong to let us know the

commuted value, together with an explanation of the

basis of computation, before the figure is mentioned

to the Americans.

I am sending copies of this letter and enclosures

to Logan, of the Foreign Office, and to Serpell, who

will no doubt also be interested from his point of view.

I should be glad to have their comments,

if any, as soon

as possible. As there has already been this unfortunate

delay in dealing with the original savingram from Hong

Kong, may I ask for an early reply?

Yours sincerely,

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