CO537-6035 — Page 18

[456B) Wt. 32483/800 100m. 11/48 C.N.Ld. 748

0.

¡Mr.Anderson

Mr. Hall

7. £/s.

Mr.

Mr.

Mr.

DRAFT.

N. C. C. Trench, Esq.,

F.0.

53627/50

Fermt. U.S. of S.

Parly. U.S. S.

Minister of State

Secretary of State

Your Reference FC 1371/19

F.O. Conse

see men

For Mr. Hall's signature.

SECRET

[see Mr. Hall's min.

of 23/117

Copy of (33)

(30)

(31)

(33)

Copy of draft saving. herewith

(copy on 54166)

FURTHER ACTION.

Copy on 54166/50 (without

enclosures)

You will remember that I spoke with you on the

23rd November, 1950, about Hong Kong telegram No.

1277 of the 21st November, about the negotiations

with the Chinese taking place in Canton on goods

traffic on the Kowloon-Canton Railway. We agreed

on our reply to Hong Kong authorizing the Governor

to proceed as he suggested in paragraph 5 of his

telegram. (See our telegram No. 1753 to Hong Kong).

I now enclose a copy of Hong Kong Saving No.

184 Secret, of the 22nd December, 1950, which explains

more fully the factors affecting the Governor's

decision to continue the negotiations for a Working

Agreement. The main point made is the one which we

had already noted before replying to Hong Kong

that in view of Article 9 of the 1948 Customs Agreement

we are in a position to maintain if necessary that

railway arrangements have always been and should be

now the subject of separate ad hoc agreements and

that the facilities now contemplated at Kowloon do

not in consequence involve any of the provisions of

the 1948 Customs Agreement.

We agree with the Governor's reasoning and see

no objection to the text of the relevant passage in

the draft Agreement (in paragraph 5 of the

Governor's savingram). Subject to any comments you

/may