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Mr. Seel

Sir Thomas Lloyd

Hong Kong Municipality

I attach a letter which I have just received from Sir Alexander Grantham, saying that, on further examination of our draft despatch, he considers that the wording of paragraph 3(a) is open to the strongest objection.

In the draft as sent to Sir Alexander this sub-paragraph read as follows:

"(a) Distribution of seats on Municipal Council

(paragraph 15). Whilst I accept the recommenda-

tion that the number of seats on the Council should be divided equally between the Chinese and non-Chinese communities, I consider that this arrangement should be regarded as subject to review in the light of experience and changing conditions."

Since the draft was referred to Sir Alexander, the above sub-paragraph has been amplified by the addition of the words "for the present" after the word "accept".

Whilst Sir Mark Young raised no objection to the terms of paragraph 3(a) as given above, he expressed the view that to go further and give anything in the nature of an assurance that the proportion of Chinese seats to be increased in the future, would have a most unsettling effect in Hong Kong and would satisfy no-one. He said that it would therefore be positively harmful.

Sir Alexander Grantham, in the attached letter, takes the view that the sub-paragraph as it stands contains an implied promise to increase the proportion of Chinese seats and that the reference to "changing conditions" will be construed by many as an indication that we are contemplating some weakening in our control. He feels that the sub-paragraph as it stands will have an unsettling effect, which it is essential to avoid.

We

I have discussed with Mr. Galsworthy. feel that Sir Alexander Grantham's objections are : well founded, and that as he clearly feels very strongly on this matter, we should consider the alternatives of (1) saying nothing at all about

a review of the distribution of seats, or (2) amending the existing comment so as to include in it a reference to the peculiar conditions and circumstances in Hong Kong.

If nothing is said about this question now, it is bound to be raised sooner or later, probably sooner. There is some advantage, we think, in making up our minds now, and Mr. Galsworthy and I would offer the following amended paragraph 3(a) for consideration:-

"(a) Distribution of seats on the Municipal Council (paragraph 15). I accept for the present the

recommendation

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