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last base on the CHINA coast and might well find

ourselves back in a position similar to that which we

occupied in 1840. During the Treaty Port period the hulks

anchored off the Concessions and Settlements were often

the last line of retreat for foreigners in which the

Navy could guard them when there was no safety ashore.

HONGKONG is like a hulk off the mainland of CHINA.

should not lightly be given.up.

Reserve all British rights and refuse international

Jor

It

discussion on official pronouncements until the problem

can be seen and weighed in the perspective of post-war

conditions.

A

This appears to me to be the best line open at

the moment. Its adoption would enable reasonable and

dignified replies to be given to enquiries from foreign

governments and legitimately interested parties. It would

indicate that we are not prepared to surrender any of our

rights or to yield in any way to pressure from abroad, and

at the same time it would enable us to convey the impression

that we have not closed our minds to the possibilities

inherent in the future. It would not, however, prevent

speculation, propaganda and pressure from abroad or even at

Home or in the Empire, and it would entail the further

disadvantage that no pragmatic assurance for the future

could be given now to British interests seeking Government

assurances. It predicates therefore a close study by

His Majesty's Government with the Dominions of the problem in

all its aspects and a realistic appreciation of all the

pros and cons. It would also necessitate the close checking

of any agitation whether at Home or abroad designed to

force a premature or snap decision. Whether that could

be done through the existing Political Warfare machinery

would have to be considered.

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