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advantage of this fortuitous turn of events and press resolutely ahead.
6.
While this general enthusiasm over the Colony's immediate prospects is gratifying, it is melancholy to have to reflect that the full exploitation of an unexpected good fortune is mainly impeded by the equally unforeseen failure of supplies which had been so carefully and con- fidently planned. Disease and unrest have been avoided, law and order restored, and confidence in the Colony's future is everywhere apparent. But the Colony at the moment presents the picture of a re-established entrepot which the outside world is not yet in a position to use. The warehouses stand empty and the merchants are idle and restless.
7.
It is apparent, however, that in its desire for an immediate return to Civil Government, public opinion is over-ambitious. The Colony's reliance upon the open- handed assistance of the Services is still very great, and until the supply of experienced administrative and technical personnel is increased measurably beyond the present standard a change in anything but name from military to civil government is not practical. It is indeed possible that no reassuring solution to the personnel question will be found until the Colony's ex-internees and P.O.W's are ready to return.
FINANCE.
8.
Stocks of currency notes are sufficient for present requirements. The banks, though handicapped by the so-called liquidation by the Japanese, are returning to something approaching normal conditions. The un- scrambling of other banks's accounts with the Hong Kong & Shanghai Bank presents serious problems of accounting. It was proposed that a special team of accountants with a legal adviser should be sent from the U.K. to assist in this work, but this was vigorously opposed by the creditor banks who suspected that such procedure might result in unnecessary delay. The present proposal, which is believed to be generally acceptable, is that a local firm of Chartered Accountants should be utilised for this purpose as soon as sufficient staff is available.
Old accounts remain frozen and it is now essential that a decision with regard to the "duress" notes should be reached without delay. There have been violent fluctuations in the market value of these notes, and recently a method of altering their numbers beyond hope of normal detection appears to have been discovered. Representations in regard to the resulting situation, which is potentially very serious, have already been sent home.
9.
10.
Exchange dealings within the sterling area were resumed on 12th November and full exchange facilities were made available on 4th December. Exchange control over foreign exchange has also been established.
11.
The Colony has the advantage both of a stable currency and of an early start over its competitors, and for this advantage to be consolidated, it has been necessary to obtain initial supplies from countries which were in a position to send at once, though these