119
4. On the question of the mode of sertlement of these claime as between the Chinese Gover ment and H.M.G., we must, I think, agrce with your view that H.M.G. could not make an unconditional cash nettlement of whatever own is ultimately agreed wit). Jurdino's in respect of the requisitioned railway material, without any guarantee that I.K.G.'s claim in rɛmect of the Kowloon properties would ever be met by the Chinese. Nevertheless, an arbitrary set off of the one claim against the other han the subject matter of the claims is quite unrelated would be open to objection on politieal grounis. I take it therefore that what is contemplated is an sporoach to the Chinese authorities concerning both these cleins vit. a suggestion that the simplest course would nɔ ear to be for settlement to be effected by a net payment by H.1.0. Subject to any views of the Foreign ffice, we should see no objection to an apɑroach on these lines.
S. of the three separate claims comerated in the fifth paragraph of your letter the interest of Hong Kong is confined to the first which relates to the return by the Chinese of coaches and wagons belonging to the British section of the Kowloon-Canton Railway. e shold attach more value to the actual return of the rolling stock than to the receipt of compensation, and we should like to suggest to the Governor that their return would be a necessary prerequisite of the net settlement which the Bar office propose to make.
6. e cannot, however, aprosch the Governor of Hong Kong on these points vithout saying something about the progresa of the claims of the I ng Kong Government themselves in respect of their own railway, material shipped to the Middle East in 1941. My letters to Dyer of 14th May and to (oldsmith of 9th Jne refer. The documents which we sent to the ar Ofiice on 23rd
pril, 1947, covered, in addition to Jardine's claim on
behalf
Page 120Page 121