CO537-3706 — Page 76

by the Court on that issue could only be in

our favour and is unlikely to be welcomed by

the Chinese. If you agree, we should propose

so to inform the Governor.

5.

You will recall that in his telegram

No.283 the Governor of Hong Kong suggested

that the eviction of the residents from the

Walled City of Kowloon in 1936/37 might

provide us with a line of argument with the

Chinese Government in connection with the

present issue. You will no doubt consider

whether it would be possible to introduce

an argument on these lines in the next

communication to be sent to the Chinese.

I imagine that one difficulty will be that

the Chinese will be able to say that they

were in no position to take up this question

vigorously in 1937 when they were under

attack from the Japanese. I don't know

whether any use could be made of paragraph 3 of Sir H. Knatchbull Hugesson's telegram No.135 of the 8th May, 1937 (copy sent to us under cover of F 2683/221/10 of the 11th May 1937) in which the Ambassador reported that the Minister for Foreign Affairs had expressed

agreement with his remark that the matter

(that is the eviction of the residents 'in Kowloon City) did not seem worth a major

dispute.

6.

The foregoing was drafted before

you told me of the proposal to seek the

opinion of the Law Officers of the Crown on the strength of our legal position. You

kindly said that you thought that it would

nevertheless be useful for you to have our

views

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