CO537-4999 — Page 154

Tel Section Co

[This telegram is of particular screcy and should be retained

by the authorised recipient and not passed on).

Cypher/OTP

DEPARTZENTAL DISTRIBUTION

FROM SHANGHAI TO FOREIGN OFFICE

His Majesty's Consul, No. 428

D. 10.15 a..

7th June,1949.

7th June,1949.

H. 11.30 a.. 7th June,1949.

1. MEDIATE

TOP SECRET

1

21

Addressed to Nanking No. 217 of 7th June, repeated for information to Foreign Office.

Line

The Chairman of the British Chamber of Commerce has nanded over to me a memorandum which expresses the

concern of his committee about the situation which seems to be developing as between liong Kong and People's Army of China. de has asked me to telegraph it to the Governor with the request that it be shown to leading Fritish serchants who have offices in mong Hong and in China and that if possible it be laid before ur. Alexander. He asis also that it be shown to China Association in London.

2. The Committee considers that:

(a) only by friendly relations with Government of China can we guarantee the security of Hong Kong;

(b) the Communists are shrewd aen who know their strength. de cannot counter it effectively by force of arms in this case and publicity given to our warlike preparations [gp.undec. ? is] regrettable;

Shamson

c) another howloon or Ame.....incident is only too possible and may have disastrous consequences.

3. The memorandum is toe lengthy to telegraph but my immediately following telegram contains summary.

BB BBBBB

4. Foreign Office please pass to Hong Kong subject to approval of His majesty's Ambassador.

26840

[Note by Communications wepartment: Copies sent to

Telegraph Section, colonial Office for repetition to Hong Kong. See request for repetition in Nanking

telegram No. 789 to Foreign Office).