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You will no doubt be anxious to make a statement locally on this matter as soon as possible after statement has been made in Parliament. This, I suggest, should state that the Japanese assets in the territories which were over- run by Japanese will be applied for the benefit of all the territories so over-run. I should wish you to add that in this connection the Secretary of State has drawn your attention to the fact that certain small territories in the Western Pacific which suffered very severely at the hands of the Japanese have no such assets which can be applied for their benefit, and that he feels that their claim for a share of such assets as are available ought not to be overlooked. While, therefore, the intention is that the bulk of the Japanese assets will be available to the territories in whose custody they are, the Secretary of State will, you understand, be addressing you in the near ture on the question of an allocation of a small pro- portion of those assets for the less fortunate territories mentioned above. I trust that you will feel able to add an expression of your Government's support of the principle of assisting the Western Pacific territories in this manner. (The maximum sum I have in mind as a total allocation for these territories from all, rereat all, Far Eastern territories together is £1,000,000 1.e. about 4% of the total amount of Japanese assets held in those territories).
5.
I shall be replying separately to your telegram No.792 regarding the University Endowment Fund the conclusions on which I shall inform Sir M.K. Lo and Sir A. Morse at a meeting on the 27th July. I have learned with much satis- faction the acceptance by the Unofficial Members of the Suggestion that part of the assets should be used for the creation of such a fund.
6.
In the case of the South East Asian territories, to whom similar telegrams are being sent, it will not be possible for any indication to be given at this stage of the procedure which it is proposed to adopt in deciding to what objects the Japanese assets at the disposal of those Govern- ments should be devoted, In these circumstances it would, I feel, relieve them of possible embarrassment if you could refrain for a further fortnight in making any statement on that matter in relation to the assets in the hands of your Government.
As regards general statement contemplated in para- graph 4 above, please telegraph text of any statement you
in to make. It is obviously desirable that statements 7 various Governments concerned should be synchronized through the Office of the Commissioner General to whom this tel-gram is being repeated. I should be glad to know the proposed date in advance so that the High Commissioner Western Pacific can be informed.
The above arrangements supersede those in para- greek 5 of the enclosure to my despatch of 22nd December,