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CABINET
Situation in Hongkong
561
Draft
61.3.26
'ukel 2/5, Elis 2/3
2166 3026
Aft L'will
Grindy_3/20
Jasibson $3.3.
M
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Memorandum by Ri Sceretary of Stali for the Colonies
I desire to draw the attention of my colleagues tothe accompanying paraphrased telegrams, dated the
26 Jan. and the 6 Feb., from the Governor of Hongkong, and to the paraphrase of a reply which I have now returned to him after consultation with the Secretary
of State for Foreign Affairs.
The Cabinet is already aware of the grave dangers threatening Hongkong and of the disastrous losses
British Rade and by which have been incurred by the Colony since the commencement of the Canton boycott in June last.
A financial crisis was only averted at the end of
My Affany
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September by immediate arrangements for funds up to £3,000,000 to be made available as and when required
for use as a trade loan by the Hongkong Government the contributors being the West African Currency Board (£1,500,000), the Straits Settlements Government (£1,000,000) and the Hongkong and Shanghai Bank(£500,000). I have now learned from the Governor that the advances made to the commercial community from this loan amounted on the 22 Feb. to rather more than £1,350,000. The available balance is thus nearly £1,650,000, and the Governor states that there is no immediate probability of the whole of this sum being required.
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On the other hand a settlement of the boycott is
hout out- not yet in sight and I feel it my duty to 'warn-my
colleagues that should the continuance of the present conditions be prolonged, and should the balance of the trade loan be exhaustged, it will be essential for H.M.G. to come to the assistance of the Govern- -ment and the commercial community of Hongkong. The Canton Strike Committee have so far failed in their endeavours to instigate a second general strike in Hongkong, but they have shown no signs of relaxing
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