4. Even if it were agreed beforehand that (?general) first rule should be that Garden of Remembrance would for convenience be administered under Hong Kong laws, it would be ineffective unless it could be publicly announced now-
5. In all the circumstances and considering that throughout these long negotiations the Chinese have yielded nothing to achieve settlement which would be anything less than fundamental victory for themselves, I am inclined to suggest returning to the Ambassador's idea of international arbitration mentioned in paragraph 3 of his telegram No.98 to the Foreign Off100. Regarding the disadvantages of that course, to which the Ambassador has drawn attention, 16 1s difficult to see how the validity of the new territories lease could be seriously attacked and I fear that whatever settlement we agree to in the present instance, no matter .how generous, we must be prepared for continuation of incidents engineered by Kuomintang. So far as Hong Kong is concerned, it is now clear to me that the balance of advantage 110s in seeking international arbitration, unless the Chinese can be induced to yield something of substance.
6. I have no objection to the alteration in the drait statement proposed in paragraph ́4 of the Ambassador'e No. (2244) to Poreim Office,
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19, 40, 499 The the theme SPERADO. ELASAH ANATURE-kory -%oke?Rentryman V SA PRETTE DESVERZONÖV SYKURTKÖYHOSTELMANTING TIMES AGA SI LA MASÉRIE E KURUMUN TEMATY TOYS COM, JO BABA HARAGPUR. TRAMBE KITS PERS
Copies sent to:-
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Mr. A.L.Scott.