CO129-580-6 New Territories 6-1-1939 - 16-8-1939 — Page 5

over the adjacent areas of China. I think that their attitude would be more firmly fixed by recent events, which leave us in serious doubt whether there is any Chinese Government which coul, at the moment, give us any valid title to the extension of our lease. It would be a poor game to hand over 20 millions to an authority when we have no guarantee that that authority would be in any position to implement an undertaking in 1997. Of course, if H.M.G. made up their minds to bolster up the Chinese Government by a gift or loan, they would

be well advised to ask in return for some promise about the New Territories, for what it might be worth; but the major considerations in such an event world be quite other than the retention of the New Territ-

ories in 1997.

I would simply send cory to 0. and

B.of T.,

S.0.

H. &. Lowell

37.1.39

Mr. Clauson.

I think it would be desirable for

the Economic Department to have a say in this

matter. Please send on through Sir H. Moore

when he is available: I should like him to

have an opportunity of minuting before we take

action.

30.1.39.

Personally I have always ryandet the need for the orer Inritning as strategic, not economic. Indred I have looked at the matti rather theother way wound, that if we established indeiatives

in