CO537-3701 — Page 19

Colonial Office,

The Church House,

Great Smith Street,

London, S.W.1.

4

SECRET

54436/48

my dear fantan.

7th October, 1948.

In my letter of the 14th May about your possible refugee problem if the Nanking Government collapsed, I mentioned that our Legal Advisers were examining the points made in MacDougall's confidential letter No. 1/1166/470 of the 4th March with a view to reaching a definite conclusion with the Foreign Office on the question of the alleged right of Chinese to enter Hong Kong.

This legal examination has resulted in a long memorandum (of which Wallace is sending a copy to MacDougall), the pro- visional conclusion of which is that the Chinese have no right, prescriptive or otherwise, to enter or settle in Hong Kong. As Wallace is explaining in his letter to MacDougall, the next step is to get the Foreign Office to reconsider their earlier view that the Chinese have some sort of prescriptive right, and we are sending them a copy of our memorandum to this end.

Meanwhile, may I ask whether you are in a position to let us have a report on any measures you may have in mind for dealing with a large refugee problem, should such arise?

ути (syd) Jom hostin

John

(J.B. Sidebotham)

SIR ALEXANDER GRANTHAM, K.C.M.G.