CO129-555-2 Estimates 1936 30-8-1935 - 29-1-1937 — Page 69

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KAX CONFIDENTIAL (2).

GOVERNMENT HOUSE,

ONG KONG.

8th October, 1935.

Sir,

3

H

Enclos.Nos.1 2, 3, 4 and 5

I have the honour to refer to my telegram No.241

of 26th September, 1935, and to your reply in telegram No.161 of 30th September. In the twentieth paragraph of my despatch No.550 of 4th October I promised a further communication on the subject of the fixing of exchange.

2.

I append copies of correspondence on this

subject which passed between the Senior Unofficial member of Council and the Colonial Secretary, from which it will be observed that the postscript to the third enclosure (Sir Henry Pollock's letter of 25th September) was apparently misinterpreted 3 My telegraphic enquiry of 26th September was therefore to this

extent unnecessary.

3.

At the same time I think it is desirable that

you should see the arguments adduced in the Colonial Secretary's letter of 19th September (second enclosure) as these explain the intention of the words "improper and unwise" in my telegram under reference. I have nothing material to add to those arguments which I may say were the result of very careful consideration, as is indicated, by those responsible for the Government's policy. I might add for your confidential information that Mr. N.E. Young of His Majesty's Treasury was

THE RIGHT HONOURABLE

MALCOLM MACDONALD, M.P.

&c.,

&C.,

&c.