receiving a free grant. This criticism itself could be disposed of without much difficulty when it is pointed out that grant was conditional on major part of compensation being found from local resources, but 12 not, it is certain to court more powerful opposition over payment in suspense. You will, I am sure, realise that in spite of any effort of mine, gesture of His Majesty' a Government will completely lose its value (corrupt passage repetition requested)
in the circumstances I have explained, urges that cffer should be modified in some degree.
If it is felt that acceptance of actual liability of war cost is impossible, I must earnestly recommend for your approval an ex gratia grant of £1,000,000 which could be amounced to the public as a token payment to Hong Kong Government in recognition of the part played by the Colony in the war effort. convinced that something on this line would go far to meet criticism by appealing to local pride and it could, no doubt, be justified by emphasis on grave difficulties which His Majesty's Goverment are now facing.
It would;
I am
in fact, clear suspense account over which there ia so much feeling, but His Majesty'e Government would not repeat not be committed to occeptance of liability of volunteer pensions for future,
5
I should be glad to learn whether your reply rules out all hope of waiving claims in respect of amall craft supplied during military period to replace pre-war harbour craft removed or rendered unserviceable by Japanese, see paragraph (corrupt group) of my despatch No. 292 and my despatch Nc. 19.
statemor be
I shall telegraph urgently comments on draft
Copies sent to:-
Tusasury
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Board of Trede Foreign Office
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Mr. Crombie.
kr. D.R. serpell, 0.B.E. Mr. Pitblado.
Mr. Marker,
Mr. Scarlett.
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