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I propose, subject to your concurrence, to ask Messrs. Dodwell & Co., on behalf of the Kailan Mining Administration, to manage the vessel for the present, on the understanding that the Administration will use her to bring coal to the Colony for Government purposes or for purposes approved by the Government, at rates based upon the rates charged for the ship, the accounts to be subject to audit. In other words the vessel will be run by the Administration upon lines similar to those upon which liner requisi- tion vessels are run."

The S.S. Wollowra was requisitioned by the Naval Authorities on the 30th November, 1917, under the terms contained in Admiralty Charter Party "T 99", and she was handed over to the Hongkong Government to control.

8. The Vital Requirements Committee had in the meantime been considering in the most minute detail the question of sparing more ships for full requisition and the employment of less suitable vessels to take their place in the trade on the China Coast, and their advice was being constantly asked as to the allocation between numerous applicants of the very limited cargo space which was allotted to the Colony on the Home and Indian runs.

On the 10th December, Mr. A. G. M. Fletcher, who had become Chairman of the Committee, addressed the following letter to the Government regarding the shipping situation as it then stood :-

"I have the honour to inform Your Excellency that a meeting of the recon- stituted Vital Requirements Committee was held on the morning of the 5th December, for the purpose of considering their present position and their future policy in the matter of the requisitioning of ships.

The question of procedure has been to a large extent settled in the Committee's and the Commodore's letters of the 29th November and the 1st December respectively. The Committee suggest that the procedure should be defi- nitely as follows:-The Commodore will refer requests for requisitioning to the Sub-Committee, who will consider the matter in conjunction with Mr. Cary; corresponding direct with the Commodore. The Sub-Committee will report their recommendations to Mr. Edkins, Mr. Anton, and Mr. Dodwell, who will form a quorum of the Committee for the purpose. This quorum will use their discretion as regards consulting the other members of the Committee, and their considered opinion will be reported to the Commodore through the Colonial Secretary. The Colonial Secretary or the Assistant Colonial Secretary will act as Chairman of the Committee, in which capacity he will keep the Government informed of what transpires. The Commodore will supply the Governor with copies of his requests for requisitioning.

The Commodore and Lieutenant Oldman have asked the Committee to state the number of vessels now remaining on the China Coast which in their opinion can be spared for Imperial purposes, and they have suggested that an approximately accurate figure can be arrived at through statistics obtained to show the cargoes which are vital to the life of the Colony; whereby under a process of elimination tonnage now carrying non-essentials and semi-essentials can be definitely set on one side as available for Imperial purposes. The Committee find themselves unable to supply this informa- tion, for the following reasons:—

In the first place the trade of the whole China Coast is in question. Hong- kong's trade statistics extend over a period of a few months only, and, with trade conditions continually changing, with ships required for one purpose to-day being diverted for another to-morrow, the Committee regard those statistics as not sufficient for the purpose required. They regard the in- mensely voluminous figures compiled by the Chinese Customs as equally insufficient for the purposes of any decision on the vital requirements of Hongkong.

It is unnecessary to reiterate the point that Hongkong is merely a distributing centre and that her vital requirements do not consist solely in food for the population and material for the docks. The Governor's draft telegram of June last to the Secretary of State for the Colonies, which was concurred

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