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Hong Kong, we asked the Governor to conduct a covert
probe of Chinese intentions about the price they would
exact for the releass of Mr. Grey. We suggested that from
the outset we should be ready to offer the release in Hong
Kong of both the N.C.N.A. correspondents (Hsueh and Lo)
imprisoned there. The Governor at first expressed his
broad acceptance of our proposals (Hong Kong telegram No.1045)
but subsequently had second thoughts (Hong Kong telegram 1059).
He believed that it might be possible to secure the release
of Mr. Grey in exchange for that of Hsueh alone. With some
reluctance we agreed to let the Governor proceed by stages
1.e. offering the Chinese Hsuch alone on the first occasion
and reserving Lo, if necessary, for a further meeting
(0.0. telegram No. 1452).
4. The covert probe has now taken place in Hong Kong. It
has not gone as we hoped. The Governor had issued instructions
to his agent conducting the probe that Hsueh should be
offered initially and that Lo might be offered in the same
conversation, though at the end. However, in the event the
interview on 17 September with the selected Chinese contact
took a turn which made it impossible for the Governor's
instructions to be carried out in a satisfactory manner.
The suggestion 'even that Hsueh might be released as the
price for Mr. Grey was not made in definite terms. A
tentative approach to the subject provoked the comment from
the contact that any offer of an exchange would be disastrous.
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/The contact
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