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earned during the period under review constituted a record. It is difficult however to judge the value of the results attained compared with pre-war years, as the abnormal conditions created by the aftermath of war, coupled with greatly reduced river competition, have no precedent in the history of the Railway.
15. The most important event was the rehabilitation and linking of the Canton-Hankow Railway with the combined British and Chinese Sections of the Railway in July, as although the amount of traffic which has passed between the two Railways over this connection since the latter date has been limited owing to economic conditions, it is anticipated that it will have a marked influence on the future prosperity and development of both the Chinese and British Section. For a short period from August 1937 to September 1938, there was a through connection between this Railway and the Canton-Hankow Railway, but this was brought about by the Japanese attack on China, and the subsequent closing of the Yiangtse, which necessitated the Chinese Government finding an alternative means of communication between the interior and the outside world. Conditions then were vastly different to those now prevailing, but the experience gained during both periods indicates that the small British Section will become one of the principal means of communication_to_and from the interior, and that large quantities of goods traffic will flow via Kowloon when normal commercial trading develops.
16. Through passenger traffic steadily increased during the eleven months under review the numbers carried progressively rising from 13,368 up and 48,358 down passengers in May 1946 to 94,798 up and 71,690 down in March 1947. During the first seven months there was an excess of down passengers over those travelling in the up direction. This was due to the large influx of persons from the interior who, in many cases, were former residents returning from China where they had gone during the Japanese occupation, and numerous persons who owing to unsettled conditions in China, were attracted to Hongkong by the possibilities of employment and trade under a stabilized form of Government and currency. During the last four months, the reverse has been the case, and there are reports that living was cheaper in Canton and employment in Hongkong not easy to find. It is too early to judge whether conditions have stabilized to such an extent that saturation point in Hongkong has been reached, but there are indications that the continuous surplus flow of people to the Colony has ceased, and that conditions are gradually returning to those existing prior to the war, when the flow of passenger traffic between the two cities was practically balanced.