OUTWARD TELEGRAM
54126/6/48
Cypher (0.T.P.)
TO HONG KONG (Sir A. Grantham)
48
153
(47)
FROM S. OF S., COLONIES.
Sent 27th April, 1948.
20.20 hra,
MOST IMMEDIATE
No. 499 Secret.
Anse. (49)
Vida (51)
Immediately preceding telegram was drafted before (46) your telegram No. 426 arrived. Time has not permitted of full review of position but following are our first reactions which are not likely to be greatly changed.
(1) We contemplate that Hong Kong Government should meet only those denial claims in which legal liability is established and (repeat and) which are not accepted as responsibility of Service Departments, I do not think. acceptance of claims eo limited should afford ground for re-opening whole subject of war damage where no liability arises under existing law. No doubt restriction to legal liability will cause apparent inequity but the same issue arises under, e.g. Malayan Commodity Wer Risk Insurance Scheme and probably under ordinary private insurence.
(2) Admission by His Majesty's Government of general Liability for denial claims would have repercussions in Burma and elsewhere even more serious than the worst you apprehend in Hong Kong.
(3) Whole basis of discussion is one of giving help where it is needed. Whatever losses may have been suffered during the war Hong Kong is to-day very prosperous. The United Kingdom, however, is still suffering financial difficulties the seriousness of which is hardly get realised in informed circles here and I am sure is quite unappreciated by your unofficial members,
(4) We see therefore virtually no hope of any further concession. I must, however, leave it to your discretion what line to take in Legislative Council tomorrow. Should be grateful for immediate report on actual courge of debate,
Copies sent to:-
Treasury
Mr. Crombie,
Mr. Pitolado.
Mr. D.R. Sergell, 0.B.E.
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