CO129-591-7 Estimates for 1946-1947 12-12-1945 - 14-3-1947 — Page 35

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1

I had not previously seen the latest minutes on

this file but from a talk which I had with Sir T. Llovd,

at the time when he was dealing with this file, I was

definitely under the impression that the idea of going

to the Treasury for free grants from U.K. funds to

the Far Eastern territories which had been occupied by

the Japanese, had not been finally turned down. The

actual decision on this file (i.e. to proceed as in the

3rd paragraph of your minute of the 12th December)

does support your view at X above. But, with respect,

I feel considerable doubt whether that represents the

real intention.

As you will recollect, in our earlier discussions

on this subject, you and I were in agreement as to the

equity of seeking grants from the Treasury for the Far

Eastern territories. What we disagreed upon was largely

a matter of tactics. You felt that there was a strong enough

case on which to endeavour forthwith to get the Treasury

to agree in principle to such grants, leaving the actual

amounts to be settled later. I, on the other hand,

(and in this view I have been supported by Mr. J.B. Williams and Mr. Caine) felt that there was no prospect of getting the Treasury to agree to such grants "in principle",

without any regard to the capacity of these territories to

bear the financial burdens in which they have been

involved as a result of the war; and that therefore it

was better tactically to defer our approach to the

Treasury until we have precise information as to the extent of these burdens (including the assessment of war damage compensation), and that if we were then able

to demonstrate quite clearly that grants from the

United Kingdom Treasury were necessary in order to make

any of these territories solvent, we should have a very much better chance of carrying our point with the Treasury.

/In