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a trade that has been recognized by, and legislated for, by both the British and Chinese Governments. Such drastic methods as are feared in Hong Kong would, it is contended, be unfair in every respect, whether as regards dislocation of the finances of the Colony, the interests of British subjects engaged in the trade, or the wrong which would be done to Chinese residents who have embarked their capital on the security of existing legislation.
It is gravely doubted, moreover, whether the sudden closing of the opium houses in Hong Kong (or anywhere else) would have the seemingly expected result of suppressing the use of opium. On the contrary, it is believed that the first result would be the creation of an illicit traffic, which would not only discredit the Colony, but would put a further burden upon its resources in the shape of a preventive service at the moment when these resources are being diminished.
While acknowledging the evidence of sincerity on the part of many high officials in China in their desire to free the people from the opium habit, the Committee would wish for better evidence than is at present available that the authorities are honestly endeavouring, or are able, to enforce the prohibition of cultivation. It may be regarded as certain that, so long as the poppy is grown, the use of opium will be continued.
There appears, therefore, serious reason to fear that too sudden and drastic action in the design of stopping the practice would produce economic and administrative difficulties altogether disproportioned to the practical result.
I have, &c. (Signed)
Dear Sir,
Inclosure 2 in No. 1.
C. J. DUDGEON, Chairman,
China Association, Hong Kong, to General Committee.
I INCLOSE, for your perusal, a Report which has been drawn up by Mr. Cousland, the Secretary of this branch of the Association, giving his views upon the causes of that marked depression which has existed in this Colony for some time past. I venture to think that they may prove of interest.
Hong Kong, April 4, 1908.
I am, &c.
(Signed)
Inclosure 3 in No. 1.
M. STEWART, Chairman.
Suggested Reasons for the Arrested Prosperity of Hong Kong.
IN reviewing the trade of the Colony of Hong Kong from year to year, it is rather disappointing to find that for the past two or three years the general note has been one of depression. This feeling, which originally was confined to only a few classes of trade carried on in the Colony, seems to have spread until at present complaints are almost universal, and it is acknowledged by all that the state of affairs is not what it should be.
Apart from the individual experiences of the merchants, there are other indications of lessened activity in trade within the Colony. The district in which most of the merchant trade is carried on, that including Bonham Strand, Winglok Street, and Jervois Street, showed at last census a decrease in population of about 16 per cent. from the previous one. A few years ago it was well-nigh impossible to obtain a shop or warehouse for immediate entry in those streets, each vacancy being keenly competed for. Now there are said to be ten houses vacant in Bonham Strand and Winglok Street, and no doubt a comparison of the rents ruling then and now would confirm the fact that there is a decreased demand for business premises.
Granted, then, that the depression is real, and that, whilst it has continued for some time, there seems little immediate prospect of a change, it is natural to look for some reason or reasons to account for it, with a view to finding out whether or not anything may be done in the way of remedy.
Several local causes have been suggested. There is no doubt but that large sums were lost during the Russo-Japanese war in attempts at running the blockade and through speculation in food-stuffs. There was also a period of wild speculation in yarn, which ended in the practical extinction of almost all the old dealers. These and other speculations have certainly been responsible for a large wastage in capital. But at present there is no complaint from the Chinese that money is dear. Capital seems to be freely available for all legitimate trading, although it may be scarcer for any speculative ventures. It is therefore hardly correct to ascribe to the above causes any great diminution in the volume of the trade carried on in Hong Kong.
Sanitary and other restrictions affecting the Chinese living in the Colony, and those placed on Hong Kong consequent upon the existence of plague, have also been mentioned in this connection. The former, which, if they attained their object, would lessen the bad effects of the latter, can, however, have really little effect on actual trade. They may affect the city as a residential quarter, they might even have a depressing effect on local industries, although this hardly seems to have been the case, but when it comes to actual merchant business, it seems improbable that Regulations as at present existing, or any others on similar lines, could stifle the commerce carried on by the Chinese. Any restrictions imposed for the sake of the general health of the community can be as nothing compared to the many advantages the Chinese merchants enjoy here under British rule. The quarantine to which vessels from Hong Kong are subjected may at times be detrimental to certain classes of trade, but it is only for part of the year, and business has been very much better at times when plague was more evident than it has been of recent years.
Local causes do not, however, explain a lack of demand from consuming centres, and it is of this that the Chinese yarn, piece-goods, and flour merchants bitterly complain.
One reason has thus been suggested to account for the present depression, and in order to see in how far it may be a true one, it is necessary to consider what position Hong Kong occupies as a trading centre. To begin with, it is not a consuming district. The population is comparatively small, and the percentage of the imports used here is really insignificant. The Colony has grown to its present size and occupies the position it does because it was found to be the most convenient and suitable port for landing, storing, and distributing goods intended for South China, Formosa, Manila, and even some other places farther afield. In fact, to some shippers in Europe and America, Hong Kong became synonymous with China, and transhipment and distribution were made from here to Singapore and the Straits in the south, and all ports up to Vladivostock in the north. Its splendid harbour, the freedom from all customs restrictions, and the security afforded by naval and military protection—these and other advantages combined to establish in Hong Kong a merchant trade of great magnitude. But it would seem as if these were not so highly esteemed now as heretofore. It is said that business which would have formerly passed through Hong Kong as a matter of course is now done direct with the consuming centres, and on investigation, there seems to be some measure of truth in this assertion.
"The Returns of Trade and Trade Reports, 1906," Part I, Abstract of Statistics (Chinese Imperial Maritime Customs), give the value of the trade between Hong Kong and China for eight years. The Colony's share in the trade of China as a whole is a decreasing one, and although the actual value of the imports from Hong Kong has increased 20 per cent. during that period, it has been stationary for four years, and that of itself is an unhealthy sign. But, so far as China is concerned, these statistics issued by the Customs are of little value when the object is to find out whether actual trade is being carried on here or not. Ocean steamers do not as yet call at the Treaty ports, and as cargo for these places is still transhipped at Hong Kong, the entries in the Returns show it as imported from this Colony. It is only by looking into each class of business individually that we can see what is really taking place.
The branches of trade which have already left Hong Kong are many, and in most cases, it is difficult to see how they could have been retained. The Japanese have taken the Newchwang trade, which used to be in Hong Kong hands, and have also captured that carried on between Japan and Singapore and the Dutch Indies, with a detrimental effect on the sugar trade with Java. Rice now goes direct to Peru from Siam, instead of through Hong Kong. Kerosene oil is imported to the Treaty ports in bulk, instead of being distributed here. Flour, which used to be imported here and distributed far north and south, is shipped direct to Shanghai, Chefoo, Tientsin, and Vladivostock; and Singapore now draws direct on Australia for the requirements of the Straits. There
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