(N 7817/1485/38)
Restricted
FOREIGN OFFICE, S.W. 1.
3rd August, 1948.
Dear Scarlett,
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You will have received copies of my letter N 7366/1485/38 of the 28th June and of Haigh's letter to me of the 29th June, about the Soviet steamships "Simferopol" and "Svirstroi".
The position now seems to be as follows:
The Ministry of Transport decline to admit liability, unless the Russians are willing to produce more evidence than they have been prepared to do hitherto. Meanwhile they have been negotiating in Hong Kong for the disposal of these vessels as scrap, although the negotiations do not seem to be progressing very fast. (In case you have not received it through your own channels, I enclose a copy of a letter dated the 25th June to the Ministry of Transport, setting out the latest position). At the same time they refuse to pay the bill for the upkeep of watchmen aboard the vessels at Hong Kong. We shall, at the Ministry of Transport request, press the Soviet Embassy to produce the necessary proofs, but we do not anticipate that they will be forthcoming; still less do we expect a satisfactory reply to the claims for upkeep put in by our Embassy in Moscow.
In these circumstances, we are inclined to think here that the best way to cut the Gordian knot would be for your authorities in Hong Kong to dispose of the ships as they want to do, and reimburse themselves for the expenses already undertaken. We should of
D. W. A. Scarlett, Esq., Colonial Office.
RECEIVEL
9 AUG 1948
C. C.
course/