Free MMA) 100S (RULMA
5. There is further point that one of the conditions of handing over the area as a Consulate would be that the Consulate building would be erected within certain time.
Having Chinese Government would continuously stall thisa won their main point i.e. got us to hand over Kowloon City to them, there would be no inducement to them to carry out
Once their side of the bargain by building the Consulate. again we should be shown up as having been out-smarted by the Chinese.
Apart from other considerations (?Chinese omitted) would be reluctant to produce the necessary foreign exchange.
T.W. Krok or his successor would ermore, dislike intensely the idea of living and working in such an inconvenient and unattractive neighbourhood as Kowloon City. He would, therefore, hinder implementation of this part of the agreement.
Fur
6. In short, at its worst, i.e. decision against us, I think arbitration is better than Consulate compound even though, whilst the issue was subjudice, Chinese would be very likely to endeavour to stir up public feeling. But see in this connection paragraph 1 of my telegram No.298 (No.6li to Nanking). And are we justified in assuming that decision is likely to go against us?
་
7. I have shown this telegram to the British Ambassador, Who asked me to add that while he would prefer speedy rettlement on basis of Consulate compound to a period of uncertainty during which Sino-British relations would be very weasy, he fully appreciates strength of the arguments set forth above. In view of extreme weakness of the Chinese Government and growing doubt of their survival in any but an increasingly shadowy form, he considers that opinion of the
He share on * Hong Kong Government should prevail in this matter.
my view that carly decision by H. M. Government is desirable.
#Corrections received 28th July.
Copies sent to:-
Foreign Office
Mr. A.L. Scott.
Ministry of Defence
Mr. P.D. Earton.
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Group Capt. Stapleton.
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