CO537-3702 — Page 136

PELA MARALI STAA SZ JAKIDESZ PERDRYAH JAMÁTANE

EXTRACT FROM A LETTER ADDRESSED TO MR. J.B. SIDEBOTHAM BY THE GOVERNOR OF HONG KONG

NAL

54145/48

GOVERNMENT HOUSE,

HONG KONG,

19th May, 1948.

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2. I am sorry that the financial settlement offered by H.M.G. for Hong Kong's war liabilities was received with so little enthusiasm by the Unofficials. Apart from the fact that the settlement leaves the Colony with heavy liabilities of an indeter- minate amount, their attitude is a reflection of the general critical view which they take of H.M.G., so far as Hong Kong is concerned. The main cause of this is H.M.G.'s refusal to make a statement on the future of Hong Kong. This makes them fear that in a showdown with the Chinese, H.M.G. would climb down and desert the Colony. They will therefore scrutinise very closely the Kowloon City settlement, when it is made.

K-

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