Oney on 54126/6/48
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Cypher
253
FROM HONG KONG (Sir A. Grantham)
D. 21st April, 1948.
R.
21st "
19.00 hrs.
MOST IMMEDIATE No. 402
Addressed to S. of 8. Repeated
#t
to Secretary-General, No. 101. to High Commissioner, Federation of
Malaya, No. 11.
to Governor, Singapore, No.23.
(Secretary-General please pass).
Your telegram No. 456.
War Expenditure Settlement.
I am deeply appreciative of the spirit of goodwill manifested by His Majesty's Government in the very considerable concession intimated in this telegram.
2. I share your anxiety that this gesture should be received by the local population with genuine gratitude and that it should react favourably on their attitude
His Majesty's Government generally. But you will recollect that in paragraph 6 of my despatch No. 292, I
intimated that any proposal that totals just over (12) 5/4/26/6/67
£1,000,000 (sterling) referred to in paragraph 5 should be charged to Hong Kong funds would be received with dismay locally. And I understand that unofficial members of the Legislature expressed their views on the subject to Lord Listowel in somewhat forcible terms. Absence of any indication in announcement that His Majesty's Government is prepared to accept liability for their retention in suspense (?account omitted) would, I am convinced, excite storm of criticism, and this is certain to be accentuated when it is realised that this Government will be required to assume liability for occupation period payments, approval for which was conveyed in your telegram No, 434 of 10th April, 1948. It should be realised that local feeling is particularly bitter in regard to volunto r and repatriate passage payments, What in local eyes appeara to be a cast iron case for ussumption of liability by His Majesty's Government in regard to former class of poyment, has already been submitted, and it is not necessary for me to repeat the argument. As regards latter.class of payment, question of racial discrimination entere into the matter as I have explained.
3. I should also like to emphasise that announcement that no (corrupt group) war damage compensation will be payable, will be strongly criticised by certain sections of the European community when they see that Malaya is
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