CO537-6046 — Page 329

X? Three - Sur As 27204 31.

and if in the meantima Ha Lituntini

F.E. him most so altered that it ws, be undeniable to to alund with them

Sir T. Lloyd

A

You last saw this file on the 8th June. Since then, Sir A. Grantham has produced the revised proposals indicated in outline in the paper at No. 23. There have been two meetings with him on the departmental level and two on the Ministerial level the first with the Secretary of State

and the second with Mr. Cook and there has since been discussion between the Secretary of State, Mr. Cook and Mr. Sidebotham. The conclusions which have emerged from these series of meetings are that

(a) in spite of the present disturbed conditions

in the Far East it is desirable to continue to comtemplate constitutional development in Hong Kong;

(b) that in present circumstances the Governor's

revised proposal at No. 23,combined with some development of the Urban Council, would be more appropriate than those submitted by him last August (at Nos. 57 and 58 on 54145/4/49);

(c) that it should be contrived that the new

proposals should appear to be put forward on the initiative of the unofficials in Hong Kong;

(a) that, for the purpose of putting the ball back in the Hong Kong court, a despatch from the Secretary

of State is required;

(e) that this despatch can not be in terms which

would appear to suggest a less liberal constitution than the one proposed last August;

(f) that since it would be intended to publish

the Secretary of State's despatch in Hong Kong,

a draft of it should now be sent to Mr. Nicoll for consideration in consultation with the unofficial members of Executive Council.

The draft which has emerged (and in which Sir A. Grantham has concurred) is at A. opposite which is now submitted for approval by the Secretary of State (but still as a draft to be sent to Mr. Nicoll) on the understanding that, if the proposals which are in due course submitted by Hong Kong are on the general lines of those at No. 23 on this file, with the addition of some development of the Urban Council, they will be acceptable to the Secretary of State.

Draft B. is the draft of a semi-official letter with which it is proposed that I should send the draft despatch to Mr. Nicoll.

It was agreed that this draft should be sent to Sir A. Grantham for vetting before it issues.

I do not think that the Secretary of State need be troubled with draft B. but he should see draft A. for the reason indicated above (i.e. that he will be virtually committing himself to approval of revised proposals from Hong Kong if they are in the form in which we expect them to be after our recent discussions with Sir A. Grantham

2nd August, 1950.

I find that I have omitted to mention that Mr. Cook

/has