CO537-4999 — Page 243

Enclosure 2

TOP SECRET

more than 10,000 persons including the Police Force and the permanent Government Service, prove willing to commit themselves by giving the Government their active and wholehearted support. Ten thousand persons in a population of two million is unlikely to be more than enough to guarantee the preservation of internal order and the operation of the mini- mum essential services upon which all else depends.

7.

In the economic field, quite apart from the grave political factors set out in the preceding paragraph, we are faced with a serious dilemma which renders it difficult to make the best use even of the very limited reliable manpower in the Colony. As I see it, in the circumstances of this territory we can have in peace a thriving commercial entrepot most vulnerable to attack both from within and from without:

or we can have in peace an unthriving regulation-bound entrepot prepared to give a reasonable account of itself in war or other emergency. But we cannot, broadly speaking, have both. The very process of preparing Hong Kong to act as a fortress in war drains away its life blood in peace. Immigration control, registration of the population, compulsory military service and many of the elementary secur measures Wich are in force in most states today would, to all intents and

kill our trade

make the defence of A memorandum setting out this argument in this despatch (six copies attached).

rposes.

Its corpse more effective. detail forms encIUS

It is of course possible to take a number of security measures without serious detriment to the economic interests of the Colony; and this Government has taken, and will continue to take, such measures to the maxi- mum extent possible, but there is a limit beyond which we cannot go without affecting most adversely the economic role of the Colony.

8.

The main purpose of this despatch is to ascertain whether this Government is correct in its assumption that, except in time of actual war, the primary importance of the Colony is economic and not strategic, thus differing from Gibraltar where the roles are reversed. If the decision is that henceforth strategic considerations are to take first place, then defence planning will be enormously simplified and immigration control etc. can be instituted. But it should be appreciated that if this is the decision the Colony's trade will wither, and the local Government's revenues decline whilst the defence expenditure will increase. A substantial. contribution by H.M. Goverment would be unavoidable.

9.

My own view is that what has hitherto been the historic role of Hong Kong as an imperial trading base, which has brought and will continue to bring so much prosperity to British interests and prestige to Britain, should not be abandoned, but should be reaffirmed: it being understood that the local Government will continue to take all possible measures of defence and security, provided that they do not jeopardise the primary function of the Colony as an imperial trading base.

10.

I should be grateful for early guidance on the question raised in paragraphs 8 and 9 of this despatch. An early answer is also required to paragraph 6 of my Top Secret despatch No. of 28th February.

Enclosures: 2

94052/34/3 (hoan ation of

Civilians)

I have the honour to be,

Sir,

Your most obedient, humble servant,

Mahauthaus

GOVERTOR.

Sunt separkleky

A BYERL

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