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antee for the future, and it was felt that sooner or later the new unions and associations which were being fostered by the Administration would be re-organized to take political direction from outside Hong Kong. If such a development occurs before the Colony has made manifest the promise of prosperity by the revival of trade and industry, serious consequences may yet have to be faced.
58. Throughout the military period there was a shortage of both skilled and unskilled labour, and such labour as was available showed the unmistakeable effects of four years of malnutrition. These facts, together with the abnormally high cost of all food- stuffs except rice, of clothing and fuel, were exploited to the full in the demands of all classes of labour for increased wage-rates. Initially, basic rates, comprising the 1941 rates plus 1941 High Cost of Living allowances, were increased by a "Rehabilitation" allowance computed on the difference in price of the five main items of the average household budget between the years 1941 and 1945. This scheme was satisfactory in its application to unskilled labour, but there were repeated indications from several quarters that a more detailed grading scheme was required in the case of artisans and semi-skilled labour. A permanent Labour Board was therefore established early in November consisting of representatives of all branches of the Services, of Civil Affairs and of the larger European employers of labour. On the Board's recommendation, the Administration accepted a full grading scheme which established basic hourly wages for all grades and classes of artisans and daily paid labour. The variable factor,- the rehabilitation allowance, was increased from $1.00 to $1.50 and was tied to the current prices of ten items of food and fuel. Provision was made for its gradual reduction and elimination as these prices fell.
59.
A similar High Cost of Living and Rehabilitation allowance was applied to the salaries of all local Government servants. This was not sufficient, however, to resolve either the larger problems of rehabilitation with which every local family was faced, or the dissatisfaction which was already being shown in 1941, by certain grades of Government servants, towards their salary scales and conditions of service. A general revision of salary scales, directed in particular at the substitution of
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through scales for the excessive number of classes and promotion bars, as had already been approved in the cases of the new police scales, was clearly desirable, and would involve considerable adjustment of existing allowances and pensions.
60. It was considered, however, that it would be impracti- cable to attempt such a general revision until living costs had been stabilized, and it appeared unlikely that sufficient staff could possibly be made available for so considerable an under- taking until Civil Government had been re-established. Mean- while, a small committee was appointed to consider such temporary adjustments as could properly be made in the salary scales of the Junior Clerical Service, having regard to the limitations of the Military Administration, and to the possibility of eventual large- scale revision being undertaken by the Civil Government. Much work was involved in this enquiry and it was not possible to implement the main recommendations of the committee before the end of the Military Administration.
Volunteers and Auxiliary
61. After the outbreak of the European war and prior to the Japanese attack on the Colony, many auxiliary service organiza- Services. tions were formed with widely differing regulations and conditions of service in regard to their very considerable establishments.
62.
After the surrender of the Colony, personnel of these services either remained in Hong Kong or were dispersed to all parts of China or further afield, and virtually all records were lost. The Administration was, therefore, inundated with claims from members of these organizations, which varied from an application for a week's outstanding pay to compensation for loss of life or limb. Little could be done towards the settlement of such claims until some appropriate machinery had been devised, and until such Government servants as were likely to have some knowledge of the terms under which members of the organizations were originally enrolled had returned from rehabilitation leave in the United Kingdom.
63. The demobilization, payment, and subsequent disposal, of members of the Hong Kong Volunteer Defence Corps presented a more pressing problem. All members of the Corps, together with their dependents, were housed and fed while initial arrange-
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