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I have discussed this draft with Mr. Sidebotham and I agree that it covers the ground on which it is felt that policy in Hong Kong is lacking. I must say however that my own preference would be to turn the substance of the despatch into a semi-official letter to the Governor, for two reasons. The first is that the Governor might well feel that a despatch in these terms, which he would have to lay before his Executive Council, constitutes an unmerited reflection on his administration. My second reason is that, in a semi-official letter, it would be possible to speak a little more plainly (e.g. on such points as that mentioned at X in para. 5 of my minute of the 3rd January).
On the other hand, Mr. Sidebotham feels that, unless the Governor receives an official despatch which he could lay before the Legislative Council if he thought it desirable, it is most unlikely that he would be able to persuade the Legislature to vote the necessary increases in taxation. But this also is perhaps a question which we can discuss with Mr. Nicol. It well may be that the best course would be to modify the despatch and to accompany it by a semi-official letter to the Governor.
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