difanlei
No. Its spoke on
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8 Jab. quarantic porchion was spect out in Ils dated 11 12 796. Mother 24/2
No. Stewart
Did Sir J.C. have all our advice on the nature of there quarantees when he spoke to
Nr. Itannam are out- X?
Am
21/2
I am sure that Lord Shepherd will find it helpful to see this
complete picture of where we now stand on this project. I am not myself really sure whether even the explanations in the telegrams at flags D and F really will dispose of all the difficulties at the
other end over the question of the several guarantees if Sir John
Cowperthwaite is right, as Mr. Hannam reports in his letter at
No. 51, in thinking that the Hong Kong and Shanghai Banking Corporation would be averse to giving a several guarantee of any sort. I think Sir J. Cowperthwaite is pretty sure to be well informed on this point; and if this does prove to be the Bank's attitude, and if there is substance in the report that the Chicago interests or the so far unidentified Swiss interests (and I wonder how firm their interest really is?) would not require among the ir financial guarantees those of the liong Kong Government or the Hong Kong and Shanghai Bank, then there will be a built-in incentive
locally for secking this finance from these sources, provided of
course that the rate of interest is not too high.
2. I think it is a great pity that FCGD proved so born and unyielding over the question of guarantees up to the point at which foreign interests came into the picture. Even if the project does
now go to British interests. the whole episode will leave I fear a
most unfavourable impression locally of FCGD's attitude; and local sentiment will believe (not altogether incorrectly) that CGD have only moved from their carlier rigid and inflexible position because of the threat of competition from foreign interests.
J. I still feel that the Hong Kong Government are right in not thinking the project to be a particularly attractive one from their point of view, or on its own commercial merits. But it has obviously acquired something of a mystique now (this is due in no small mensure to Colonel Clague's own assiduous efforts to identify the project with confidence in llong Kong's future); and I share the Governor's view that, if the project is to go ahead, it will be a pity if it is lost to Britain, having regard to the unpleasant impression this would cause locally of Britain's general dis-interest in Hong Kong. As Mr. Hannan points out in his letter at No. 51, this could well have unfortunate results on our trade relutions with
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ilong
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