3
An assurance was given immediately that it was not intended to prohibit transhipment of rice at Hongkong. At the same time acting on the report above quoted a Japanese firm was about to make arrangements to divert two ships loading in Saigon so that they would proceed to Japan direct without calling at Hongkong. This was averted.
10. It was obvious that with a view to controlling the price and preserving the trade immediate action was necessary, and after some discussion it was decided to call a meeting of the principal employers of labour to consider the whole question. After two meetings it was decided that the only feasible course was for the Government to purchase rice and, subject to the approval of the Councils, this situation was accepted by the Government. A telegram was sent to the British Consul at Saigon on the 1st July enquiring whether it would be possible for the Government of Hongkong to buy Annam rice from the 1st August up to a maximum of five thousand tons a month for six months for the purpose of local consumption, and on the 4th July the Consul suggested that the best course would be for the Government to approach the Food Con- troller at Singapore with a view to buying 27,500 tons of rice which he was willing to resell, the price being about $13 a picul (Saigon currency) f.o.b., the market price at the time being considerably higher. This suggestion was adopted, and on the 11th July a telegram was received from the Colonial Secretary, Straits Settlements, stating that the Food Controller could sell 27,500 tons Saigon rice July allotment for October delivery at $13.30. Saigon dollars ex mill, and requesting the Government, if it wished for this rice, to remit to the British Consul at Saigon $1,500,000 Saigon dollars for the necessary advances.
11. The Officer Administering the Government thereupon summoned a meeting of the Unofficial Members of the Executive and Legislative Councils on the 15th July at which the Colonial Secretary and Mr. R. O. Hutchison were present, when it was decided to purchase the 27,500 tons of rice offered by the Food Controller, Singapore. A note of the proceedings is attached to this report. (Appendix I.)
12. It was realised that the Government would have to face a considerable loss of money. in giving effect to the decision to purchase rice, and it at once became apparent that the loss would be increased owing to the high rate of discount on the Hongkong dollar at Saigon. The discount at first was 231 per cent., but on subsequent purchases was somewhat lower. The Treasurer arranged with the Hongkong and Shanghai Banking Corporation for the financing of the purchases in Saigon, and the Government is much indebted to that institution for the valuable assistance rendered in this matter and for the moderate rate of four per cent. interest that has been charged on the overdraft. On the 26th July a telegram was received from the Colonial Secretary, Straits Settlements, to the effect that owing to an error the Food Controller had offered 27,500 tons whereas 13,750 tons only were available, the balance having been sold to the Netherlands Indies. As no further supplies could be got from Saigon except at a prohibitive price it became necessary to make purchases locally and this was done to the extent of about 10,000 tons principally of broken rice to mix with the Saigon rice on arrival.
13. Mr. R. O. Hutchison was put in charge of the general control of the rice position and five of the leading Chinese rice merchants were invited to act on a Committee to arrange the purchase and price of rice for local consumption. Sufficient godown space was rented and everything was in order to begin sales on the 1st August.
14. Unfortunately at the end of July typhoon weather prevailed and it was im- possible to convey rice across the harbour to Yaumati. The result was that a portion of the population started looting rice shops and a riot took place outside the Yaumati Police Station. The Naval Authorities lent the tug "Cherub" and the Military Authori- ties the tug "Omphale" on the 28th July, which made it possible to send some rice to Yaumati and Hunghom. With the exception of some looting no other disturbances occurred. The rice was guarded by Military escorts for two days while being conveyed from the tugs to the shops. In Victoria looting on a rather serious scale took place for about a week, and it became necessary to start the Government sales of rice before the organization was completed.
15. It will be convenient to deal now with other measures taken to obtain supplies of rice. The July crop in the New Territories was a good one, and in order to ensure that the rice did not go into Kuangtung all export except to Hongkong was prohibited,