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thus Currency

Owing to the carcety of Hong kong currency, none of the marketing centres in the NEW TERRITORIFS is as yet able to buy enough Government rice necessary for resale at 20 cents per catty, local rice finds a ready market even at a higher price. used to buy local rice, and in some cases Government rice, is mostly Chinese National currency.

In UN LONG Market, where a fairly comprehensive investigation has been made, the bulk of the local rice is being bought up by the two rice stores (assigned as sellers of Government rice) at 27 cents per catty. This rice has been transported by handcarts to CEPIT FEAK BAY where it is put on junks and shipped to HONG KONG. The remainder of the rice going out of UN LONG was being sold at 26 cents per catty and trans- ported to SHEUNG SHUI Market where it is being put on lorries presumably for shipment across the border into Chinese territory where rice is selling at the average price of 30 cents per catty To corner the local rice in the JN LONG District the two rice stores in UN LONG, which do all the milling in the district, have been selling their rice crops to the millers and using the money they receive (at $17 per picul) to buy Government rice at 20 cents per catty. It is noted that if the farmers keep their own rice they would receive only approximately 60 catties of milled rice after milling charges have been paid, per picul of unmilled rice, whereas when they sell their won rice, the money they receive will buy them 85 catties of Government rice.

Commencing Friday morning, governement rice for free distribution to the needy has been arriving at thc UN LONG Market via junks to Castle Peak Bay and by handcarts to UN LONG Market. On Sunday 7th October, distribution of this "Free" rice has been noted in both UN LONG and TAI PO. Cooked rice is being given to those who live nearby and uncooked rice to those who live at a distance from the distribution centres. inaugurated in both UN LONG and TAI PO to those drawing the "free"

A card system has been rice to avoid any person drawing more than one portion at a time and appears quite effective.

(111) A number of arrests have been made during the week in the KOWLOON area, the chief culprits being looters and persons in illegal possession of arms.

MA YUI TING a Chinese elder of TAI PO, was murdered in TAI PO market on October 1st by 2 urtown Chinese. The deceased is known to have been a collaboratur with the Japanese. A report and statements of witnesses hav Police H..

en forwarded to the Civil

Commando patrol from TAI PO to TAM CHUK HANG 555255, HOK TAU 553252 and the area of BIRD'S HILL reported that the villages appear prosperous. All were aing Chinese C.N.C. SAI KUNG village was occupied without incident on October 4th and all guerillas have now withdrawn from the area.

Patrols which visited KUK PO 6329 and FUNG HANG report that there are no Communists in the area but that food is very scarce and there is much sickness.

As of 7th October, Chinese Communist Guerillas were still maintaining armed sections on the Chine c side of the village of SHA TAU KOK. The main body of guerillas remains in the hills, but sends down regular reliefs for the sentries.

CHEUNG CHAU ISLAND.

This island was taken over by "Red Army" guerillas from the SILVIK MINE BAY area when it was evacuated by the Japanese on August 20th, 1945. The guerillas removed all Japanese property to their H.Q. on LANTAO Island and sealed all other property; their behaviour was very good.

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