(on 54179/46
dup. attached)
5.
I recognise that the lack of enthusiasm
for the Municipal Council proposal is due in
part to the fear of domination by the Kuomintang,
and that there is some basis for this fear.
I have read in this connection, with some concern,
the memorandum enclosed with your confidential
despatch of 28th November, from which it appears
that the Kuomintang are in a strong position to
influence the Chinese population in Hong Kong.
To some extent this factor is an argument for
the Municipal Council proposals, since the
Kuomintang would have less opportunity of
influencing important decisions of policy through
unofficial representation on a Municipality than
through an increased and elected unofficial
membership of the Legislative Council, which
would be the alternative course of constitutional
development. On the other hand, it is arguable
that in practice, it would be possible to
exercise more control over elements who might
be subject to Chinese political influence,
were they elected members of the Legislative
Council (on which at the present stage there
would be a strong representation of official
members) than it would be if they were elected
members of a largely autonomous Municipal Council,
of which there could be no official representation
of the 'Central Government. (In this connection
I may say that I heartily agree with your view
that it is essential that if a Municipality is
created, it would have genuine authority,
including financial responsibility, within its
allocated functions. This however and the general
financial aspect are matters on which it would be
necessary to consult the Treasury)
6. It