(35)
୧
(F9340/154/10)
RESTRICTED
Dear Scarlett,
551336/90
5.7JUL 1948
FOREIGN OFFICE, S.W.1.
15th July 1948.
113
26
We have received conies of Mussett's letters to Wass (Treasury) of the 2nd and 5th July about the Chinese claim for materials requisitioned at Hong Kong in 1941, and connected counter claims.
I fear we would hardly feel justified in approaching the Chinese Government with the War Office's present proposal. It would not surely be reasonable to expect the Chinese to accept cancellation of one half their claim (even if one strikes out that part relating to material not actually requisitioncd) without further explanation. I think it is for War Office first to complete consideration of the whole of the £353,458 10/- claimed for material actually requisitioned and say how much they are prepared to accept. I should also like some further explanation about the additional sum of £29,769; it does not seem adequate to dismiss it merely because it was not included in the original figure communicated by you to the War Office in April 1947.
As regards the balance of £942,449 8/-, Nanking Embassy stated in their letter of the 19th February that "there is no evidence, so far as we can see,
can see, that the Ministry of Communications applied for permission to ship any of the equipment out of Hong Kong, or, indeed,
Can this be substantiated? had anywhere to ship it to."
You will, no doubt, consult your legal advisers on the point.
E.W.A. Scarlett Esq.,
Colonial Office.
/The