Typax
INWARD TELEGRAM
This document must be paraphrased if the communication of its contents to any person outside Government Service is authorised,
TO THE SECRETARY OF STATE FOR THE COLONIES
FROM HONG KONG (Sir A. Grantham)
D. 30th December, 1949 R. 30th
12.45 hrs,
No. 1397 Secret
C.N.A.C. and C.A.T.C.
Your telegram No. 1922,
Your paragraph 1,
Detailed comment is difficult without knowledge of complaint and allegations of partiality. Nevertheless they are groundless.
2. Your paragraph 2, Summary of the position is as
follows.
On 24th November three actions commenced in Supreme Court. Respective plaintiffs were 0.E.A.C., C.A.T.G. and the National Resources Commission. In each case defendants are persons apparently in possession of property in Hong Kong claimed by plaintiffs and also claimed by defendants as being servants of the Central Peoples Government. In all three cases interim injunctions have been in fores approximately from date named preventing either side from dealing with property in issue, Proceedings were resumed on 21st December before Chief Justice such being concentrated on action No. 519 of 1949 in which National Resources Commission were the plaintiffs, In such proceedings application was made to discharge interim injanetions, By reserved judgment delivered teday the Chief Justice ordered injunctions to remain in fores, each side having liberty to apply, Application by Chenault and Willauer mentioned in paragraph 1 of my telegram No. 1366 were heard on 22nd December, In action 517 the application was withdrawn and in action 518 refused, Persons named have now commenced action with Republican Government and G.N.A.C. as defendants,
defendants. Pleadings not yet filed,
3 Your paragraph 3. Paragraph received corrupt but appears to read "Government had recently cancelled C.A.TAM rights". Allegation may relate to refusal to permit C.A.T. haming private wireless telegraph circuit to Taipeh and Taiwan,
No other grounds for complaint by C.A.1. is known.
40 Reference paragraph 3 of my telegram No. 1366. U.S. Consul General brought Heppner and Willauer to see me on 29th, Willauer handed me memo óf which summary of contents are "By agreement 12th December Chinese Government sold all interests (including assets in Hong Kong) in C.N.A.C. and C.A.T.C. to Chenault and Willauer, Chinese Government have informed Foraign Office in terms mentioned in your telegram No. 1896. They believe Foreign Office has accepted validity of the sale which validity has been accepted by the U.S. Government, On 18th December persons named assigned all above assets to Civil Air Transport incorporated in Delaware State and now are about to be registered as foreign company in this Colony, Application bas now been made by C„áT. to register aircraft assets under
/U.8.