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pumped in from warships: when rice and meat stocks drop almost to the vanishing point, another cargo is somehow spirited from the Delta.
17. Labour trouble has been held off by raising the minimum basio wage From a pre-war 60 cents to g1 plus a grant of a monthly "rehabilitation allowance" of $30. About 40,000 free meals are served daily through the heavily reinforced charitable institutions to which the Administration gives free rice and vegetables. In their long and honourable history, these institutions have never given more valuable service than now. An extensive scheme of public works relief, employing close on 40,000 unskilled labourers on clearing the mess and dirt inseparable from Japanese occupation of any city, has also helped to steady the situation.
18. In my view, the labour situation, at present quiet and undisturbed, is potentially one of the most dangerous facing the colony. Every effort is being made with the exiguous staff available to keep watch for the first signs of unrest. The labour unions and associations are meantime being re-formed. Sooner or later they will be organised to take political direction from outside Hong Kong: and if by that time the colony has not been able to make manifest the promise of prosperity by reviving trade and industry, the consequences are likely to be serious.
19. The re-start of trade is a topic of discussion on everyone's lips. The plans with which the Administration arrived, which contemplated no private trading for six months or more, require and are receiving urgent reconsideration. Great pressure is being exercised by American agents to permit the import of commodities said to be ready for shipment from the Pacific Coast of the United States. The American Consul has sought an interview at which he asked for assurances that Hong Kong contemplated no policy of trade exclusion or discrimination: Chinese merchants with dollar credits in America and sterling credits in London daily enquire when they will be allowed to resume business operations. The Administration requires to act very quickly to avoid the appearance of pursuing a restrictive policy which would be fatal to the colony's prospects.
20. The first soundings have also been made with reference to air facilities for American companies planning to develop routes in the Far East. It is to my mind absolutely essential to the future of Hong Kong as an air junction that it be removed from the sphere of reciprocity bargaining in regard to air facilities. At Canton, less than 20 minutes flight distant, a more spacious airport already exists than any that it is possible to construct with the narrow confines of this Crown Colony. The Chinese will try very hard to induce world airlines to make their terminals there, connecting with Hong Kong by means of subsidiary feeder lines only.
21. The matter is for Hong Kong one of major policy. Our task, as I see it (as, I believe, anyone must see it who experienced the Pan-American negotiations of hine years ago) is less to decide whether and on what terms we shall or shall not admit foreign air-lines to the colony than to try to persuade them by all means in our power to come in and use our facilities at will.
22.
Relations with Canton and South China, as experienced at first hand, give rise to some anxiety. The policy of limitation of entry of persons into Hong Kong, which is imposed as a result of lack of supplies, has caused resentment. General Chang Fa Kwei, the effective commander of South China, has chosen to regard it as an insult to "honest Chinese merchants": expressions of his private irritation over dolay in permitting resumption of the anachronistic operation of the Chinese Ministry of Communications in the colony have also been conveyed privately to us: and there have been several misunderstandings in regard to requisite notice having been given for British planes to land in Canton. There are other instances of friction also, all of them, like those quoted, of a minor nature. The expectation is that very great tact will be required when points of real dispute arise.
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