CO129-571-16 New Territories 13-4-1938 - 12-12-1938 — Page 91

4.

wanted to obtain the views of the Departments concerned

as to the importance of Hong Kong from the point of view

of Imperial interests. The Colonial Office felt it

proper that the views of successive Governors on the

desirability of extending the lease should be given the

fullest consideration. As far as Hong Kong itself was

concerned, the expiration of the lease of the New

Territories in 1997 would give rise to difficulties some

time before that date owing to the demand for long period

commercial leases. At present the Colonial Government

were giving short period leases with the option of renewal,

if such could be arranged, after 1997. He felt that on

the whole it would probably be as well to wait until there

were signs of this having an adverse effect on commercial

concerns before making definite proposals on this ground.

Mr. Howard referred to the recent rumour that

the French had received a lease of Hainan Island in

return for aid to China and asked whether this would not

effect the present proposals. It was felt that the

rumour was too vague for it to influence our attitude

at the moment.

Sir John Brenan emphasised the importance of

ensuring that in such a matter the offer should be made

by the Chinese rather than to them.

Mr. Compton said that a sum of the order of

£20,000,000 was the only one which the Chinese were

likely to accept. It was impossible to envisage the

payment of such a sum by H.M.G. at the present time, and

it would moreover appear to be contrary to the recent

Cabinet decision on the currency loan. In the absence

of an overwhelming cause from the defence point of view

for such a payment, he thought that the Treasury would

7.

not