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612
1)
"
VOTE !.
Miscellaneous Items.
General Pan's finances. The Hong Kong Administration have settled this question temporarily by making ocensional advances to General Pan - he has now had, I think L.K.150,000 - against signed receipts No arrangements have been made for any recoveries; nor has any rate of exchange been discussed. It would seem undesirable that this position should continue. My suggestion, which was generally endorsed by Brigadier MacDougall and in conversation with General 8.K. Yi, was that settlement should be part and parcel of any general arrangement reached in respect of British fapi drawings for our official expenditure. I told General Yi that a sum of
H.K.100,000 per month was out of the question and asked him to reduce demands to the real minimam.
General Pan's Mission. This large group, which includes no fewer than five generals, is a nuisance to the Hong Kong Administration in general and to General Festing in particular. They have little
to do and morely create problems. On the British side the in- plications of the Chungking agreement are understood and the Chiness will get the Japanese equipment loft in Hong Kong. Meanwhile a few Japanese ships are being got ready for service and will be used by the Administration for immediate needs.
Hong Kong facilities for Chinese troop moyomontg. The arrangemente to use Hong Kong as an embarcation point for Chinese troops proceeding up the coast have been well handled and General Ho is quite satisfied and asked me so to inform General Chen Chong, to whom I have written (@opy attached) enclosing a letter from General z Ho. A first party of Chinese troops has arrived at Kowloon and one division will start embarking for Dairen as from to-morrow. The American liaison officers with this group seem happy about the arrangements made,
4) Return of Chinese to Hong Kong. Brigadier MacDougall will welcome Chinese business-men to return to Hong Kong, but suggests that they must find their own means of transportation, except in special 02888, They do not wish indigents to return but cannot stop them and it is estimated that the exodus from Free China is now at the rate of about 1000 a day. I cleared a visit for Mr. Tsai, the Secretary-General of T.V. Soong's Bank of Canton, at H.C. Kiang's request and suggest that he may be given R.A.F. lift from Kunming: but Brigadier MacDougall rast be warned beforehand of his arrival. I have informed H.C. Kiang whó will send Thai to see us when his passport etc., are in order. I think he might be given letters to Brigadier HnoDougall and to the managers of the Hongkong and Shangha and Chartered Banks.
5 Piracy. There has been widespread piracy which has curtailed
Tishing and junk traffic. Anti-piracy patrols by the Navy and R.A.P. are now taking place and the fishing fleet goes out under nav al protection. There is talk of a "junk" operation to make an example and frighten ptratos from the neighbourhood of Hong Kong.
Communist forces. There are still some Co:cuunist units in the New Territories. Contacts have agreed that they will evacuate } Northwards as soon as General Pesting can take over the areas. There are not enough troops yet to close the frontier or to take over at present and the Commander-in-Chief has supported the General's request for one more brigade. kwei has suggested from Canton that he will soon move up and close General Kung Chung P- the frontier and all are agreed that it would be best to have the Communists out first. General Festing is off to Canton to moet General Chung on October 5th.
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