CO129-571-16 New Territories 13-4-1938 - 12-12-1938 — Page 86

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(a)

The defence aspect.

(b) The commercial aspect, particularly from

the point of view of maintenance of the water supply

and of air communications, and of free access to the

harbours.

It might be necessary to bring in the Board of Trade later

for discussion of the commercial importance of Hong Kong

had to British trade but the present proposal/as yet hardly reached the stage when it was necessary to do this.

In

the first place he suggested that the representatives of the Defence Departments should say what importance they

attach to the maintenance of the New Territories as part

of the Colony.

It was agreed that the primary importance of

Hong Kong from the defence aspect was as a naval base.

Major Grover said that he felt it was impossible to say

precisely what we should gain by extending the lease of

the New Territories, as conditions of warfare change so quickly that any calculation made now might be completely

out-of-date by 1997, when the lease of the New Territories

would expire. He felt that we should on the whole gain

by extending the period of our lease but that there was

no need for us to worry about this point at the moment.

Captain Bourne said that from the military

point of view it was essential to keep the present New

Territories as British territory, in spite of the recent

C.I.D. decision to restrict the scale of our defence in

Hong Kong. That decision was expressly said to be on a

temporary basis and subject to constant review and from

the military point of view he had no doubt that the

maintenance of British control of the New Territories was

essential.

2.

Mr. Compton