CO_968_583_DEFENCE_OF_HONG_KONG_1957_1959 — Page 231

of D(50)70

Page 231

Page 231

It is suggested therefor that the

Grantham proposal should be pressed and only

when it is clear that it is unacceptable to the

Committee should the Secretary of State revert

Robul

to the line now supported by Sir

ir t

10.

are:-

Black.

The arguments for the Grantham proposals

(a) They are a way out of an impasse.

Service Department title to the

lands is very doubtful, and a deal

would save prolonged haggling,

(b) If a decision on the artillery

units goes against the Colony

there is bound to be bitterness against

the Service Departments, and even

among those who are not aware of the

bargain which has been proposed as

between these lands and the units,

Over the lands the desire to drive a hard bargain

will be predominant.

The closure

of the naval dockyard will increase

this feeling; and at the same time

H.M.G's continued demand for a

defence contribution of £lm, and its

continued refusal to help with

refugees will cause further

bitterness;

(c) We cannot force Finance Committee

or the Legislature to pay their

Defence contribution.

Means must

be found of maintaining the

contribution which do not involve a

head-on collision.

Page 231

/11.