CO129-606-3 Treasury control over Hong Kong finances 14-1-1949 - 1-12-1949 — Page 30

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Extract from minute by Mr. Bourdillon dated 10th February, 1949.

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This brings me to Hong Kong. In this connection, please see 54126/5/49 beneath. I am a little handicapped by the fact that a copy of Mr. Paskin's telegram to Sir Thomas Lloyd urging that I should visit Hong Kong does not appear to e attached, in spite of Mr. Sidebotham's minute of 8/2 on the other file. My recollection, however, is that, this telegram merely said that a visit by myself to discuss financial matters whould be welcomed, and went on to refer to certain passages in a letter from Mr. Paskin to Mr. Sidebotham which had not yet arrived, but which was said to enumerate specific financial topics demanding discussion. The lett r has now arrived, and the relevant extracts are attached at No. 1 on the other file. With the greatest respect, I feel very definitely that these subjects are ones which I should undoub Sedly discuss if I were undertaking a general tour, which do not warrant my taking time off from a visit to Malaya for the purposes described earlier in this minute. I have the greatest sympathy with the Hong Kong point of view that local discretion should be allowed in all matters where there are not really strong reasons to the contrary, and I do not for a moment suggest that the points in No. 1 on 54126/5/49 should be left unanswered. of those points refer to past matters, but others are still live issues, and I suggest that the file should be recirculated for further consideration of these latter points as soon as the present action is completed. All the matters mentioned can, however, be dealt with sympathetically, on the basis of our existing knowledge, by personal correspondence with the Governor. The position is now greatly eased since Hong Kong came out of Treasury control and since, with the removal of Mr. Serpell from I.F., the whole Treasury attitude regarding Honh Kong became more liberal than heretofore. As I see it, the important thing for us to do is to give local discretion in all cases where we can, and to explain our reasons in all cases where we cannot. I do not honestly see that a two

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days visit by myself is going to advance matters very much. I suggest that we send a telegram to the Governor saying, with regret, that I can only be spared from London for the shortest possible time and that I will be more than fully occupied in Malaya; and that we should follow up the telegram by a personal letter from Mr. Sidebotham, as uring the Governor that we appreciate local feelings of frustration at what appear to be unnecessary delays at the London end, and comenting on the individual points in No.1 on 54126/5/49.

9. In the absence of a copy of the Inward telegram I have been unable to draft to Hong Kong. I attach however, a draft to, Sarawak (based closely on Mr. Higham's draft which is already on the file), and a draft to the Federation of Malaya in reply to No. 6.

With

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