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overlooked the Company's draft proposals in January (Annex B), would be glad to know whether there has been any approach along these lines and, if so, what his Government's reactions were.
5. I am disappointed that you should consider H„M„G's, offer to back, as to 50%, a Hong Kong Government guarantee as having lapsed. It seems to me that inasmuch as there may be circumstances in the present Hong Kong situation requiring the Treasury and E.C.G.D. to press for a Hong Kong Government guarantee of the loan there would still be a case for a public gesture by H.M.G. in support of the Hong Kong Government with a view to bolstering confidence in the Colony's future. But I see little purpose in pursuing this now, since in my view it is very doubtful that the Hong Kong Government would now agree to give a guarantee on any terme, if such a guarantee should still be required. I would add that it would be an act of folly to tell Hong Kong that H„M.G's offer is withdraw unless it becomes absolutely necessary to do so. I hope we never have to do so, but to do it now would unnecessarily exacerbate relationa already strained in the aftermath of devaluation.
6. I am writing separately in reply to Cotterill's letter of 23 February asking for views on Hong Kong as a ten year forward risk.
7. I am sending copies of this letter to Cotterill (E.C.G.D.) and Gowers (Board of Trade).
(w. 8. Carter)
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