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5. Private Warehouses.—On 30th June, 1932, the extension of private warehousing privileges for six months, of which mention was made in last year's report, expired. The change over to bonded warehouses took place very smoothly on the whole and seems to be working well. It will no doubt work even better when further experience has been obtained by the various staffs concerned. One firm has availed itself of the offer of the Government referred to last year, and now has special European supervision of its private bonded warehouse, for the cost of which service it reimburses the Government.
6. European Liquor. A fair increase in the number of gallons paying duty was shown under most classes of European Liquors. This is partly due to the discoveries of frauds mentioned in the 1931 report, and also to the fact that some Duty Paid Liquor is purchased in Hong Kong to be taken elsewhere. Exports and Ships Stores applications are all now carefully scrutinised, and it is extremely difficult to obtain Duty Free Liquor.
7. New Duties. In March, the method of assessing duty on Medicines was amended to a four-point scale based upon the alcoholic strength of the medicine, but this proved unsatisfactory, and in June, the system was completely changed, and the basis on which duties are assessed on Native Spirit was adopted. This is 5 cents per gallon for each 1% of alcoholic strength, with a minimum charge of $1.20 per gallon for liquors containing 24% of alcohol and under.
In October, effect was given to the Ottawa Agreement, and the Duty on Empire Brandy was halved.
8. Local compounders of perfumes, etc., continue to export on drawback, but the business has fallen off considerably owing to the effects of the slump in the Straits and Java and to high tariffs elsewhere. Bulk exports to China still continue, but the quantity being so exported is decreasing owing to prohibitive tariffs.
II. TOBACCO.
9. On 1st October, 1932, this Department took over the licensing of Street Squatters from the Police Department. All Tobacco Retailers in the Colony are now under the direct control of the Superintendent of Imports and Exports, in accordance with the requirements of the Tobacco Ordinance, No. 39 of 1931. All the licences issued by the Police have, with few exceptions, been renewed, but it is not proposed to issue any new licences of this class. At the time of writing, the number of licences which have been issued is 681, which includes 92 issued to cover delivery, but not sale, of tobacco and cigarettes by the coolies employed by manufacturers and wholesalers.