Page 91 by the Bermuda representatives that such a proposal would give rise to great resent- ment and would strengthen the hands of those Bermudians who favour a closer financial and even political relationship with Canada.
6. I do not therefore think that the counter-offer made in the course of the discussions here should be put forward officially to the Bermuda Government. If their offer is not to be accepted, it will be necessary to tell the Bermuda Govern- ment that, in our present financial position, we cannot afford to let them have this property at the price which they offered and that we shall have to make other arrangements for disposing of it, in which we would hope to have their co-operation. 7. I recommend that we should accept the Bermuda offer of £650,000. It would, I think, be well worth foregoing the possible (but speculative) advantages of piecemeal disposal, even in our present financial difficulties, to keep the good- will of the people of Bermuda. The Colony has at no time received any financial help from the United Kingdom Government for development or any other purpose. It has, on the contrary, made a signal sacrifice for Western defence by the provision of land for United States Bases; it is making a voluntary contribution of about £40,000 a year to United Kingdom defence costs; and it is at present contributing some $11 million a year to the sterling area dollar pool. If we insist upon regarding this as a purely commercial transaction, we are unlikely to gain anything like the estimated sums mentioned, we shall have to wait a long time for our money and we shall run the risk of long-term disadvantages far outweighing, in my opinion, any possible financial gains.
Colonial Office, S.W.1,
25th June, 1952.
O. L.
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