There is, of course, always the risk that the attempt to raise money will in itself give rise to the question, in Parliament or elsewhere, as to our future intentions. Should that happen, we may be forced to make the declaration we are seeking to avoid after having already committed ourselves to offering better terms for the loan in consequence of the uncertainty.
Finally, there are the more general questions of financial policy and assistance. If there is any question whatsoever of the retrocession of Hong Kong, I do not see how we can conscientiously propose any further financial assistance for Hong Kong from the British Exchequer. Whilst any uncertainty exists, therefore, the proper and only financial policy, in my view, is to cut down expenditure to the minimum and in particular avoid any long term commitments. I was hoping to raise with the Treasury the question of a free grant from the Exchequer to Hong Kong to assist the Colony in meeting its existing and probable liabilities over the next five years, very roughly estimated at £70,000,000. I had in mind a grant of some £30,000,000, the amount of the grant made to Malta. But, if there is any possibility whatsoever of the retrocession of Hong Kong, I should certainly not feel justified in raising the matter myself.
I hope that I have said enough to indicate the difficulties in which we are placed by this uncertainty regarding the future of Hong Kong. Even if a public declaration is out of the question for the present, I hope that Mr. Bevin can be persuaded to remove any doubts as to his own personal views. In other words, I hope that he may be persuaded to agree that there is no case for the retrocession of Hong Kong and to the conditions which we have suggested should be attached to any surrender of the lease of the New Territories, on the understanding that he should be free to reconsider his views in the light of any material change in the international situation as it affects this question and that he is not thereby committing himself in any way on the question of a public declaration.
by mayle
35.5.47.
See for the moment on 54147/47.
So
19/5
1 Di vade
106. Mocdougall (Hong Kong) 107. To for One Sorgent (F.O.)
(Original
JHINT/47)
2.5.47
5/0
29.5.47
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ORIG. ON 54228/1/47
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