CO129-580-6 New Territories 6-1-1939 - 16-8-1939 — Page 7

that Hong Kong as it is today could not continue to

exist, if deprived of the use of the lease territo

tories.

2. The question for decision is whether the present

is a favourable opportunity for negotiating an extension

of the lease. The danger of effecting with the present Chinese Government a settlement which might subsequently be repudiated by a Chinese Puppet Government controlled by

Japan, has already been pointed out. Further, the fact

that the Chinese, though desperately in need of cash,

have not themselves put forward any such suggestion has also been referred to as significant. Unless, therefore,

there are anv recent developments in our Far Eastern

B

Policy, of which I am ignorant, which would make it

possible for a settlement of this question to be included

in some general policy for more active assistance to

China, I can see little advantage, and considerable danger, in raising the ouestion ourselves at the present

time. It is quite clear that, if it is regarded as a purely Hong Kong domestic issue, the Treasury attitude

towards any financial contribution from H.M.G. would be

unfavourable.

مسما

Am.

Differen

31.1.39.

23བ ། ་ ངག ་གས་ ོན་ང་

purpares

pround as suggested by M Towell.

← them await

might remaine

which

B.5, report for

when sanding

B.P. copy of vor.

محمده

3

31.1.39