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PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-

COPYRIGHT PHOTOGRAPH-NOT TO

98

tendency to go to Germany. This would, doubtless, have been accentuated if local merchants had continued to buy copra on credits opened for them by dealers in Hamburg. With due precautions as to origin of goods this tendency can be met, without any objection on any ground in Seychelles, by protective dues.

With the object of preventing a recrudescence of enemy trade with the Allied countries after the War, the latter have resolved, amongst other things, that "goods originating in their countries shall be subjected to prohibition or to a special regime of an effective character.”

It is obvious that prohibition of direct export of produce from colonies to enemy countries would be quite useless unless the re-export of such produce to enemy ports, after its arrival in Europe, were likewise prohibited.

But such prohibition would fall far short of completely stopping enemy countries from receiving produce if they are free to obtain it via neutral ports-- especially Rotterdam. The writer suggests that the only way of meeting this difficulty effectively would be to continue the present war system, under which imports into neutral countries are officially controlled.

It is to be hoped that what remains of the German mercantile fleet, after restoration has been made at its expense of the many vessels illegally destroyed during the course of the War, will be subject to special conditions in respect of calls in Allied colonial ports. Some measure of this kind seems to be indicated amongst the "Transitory measures" of the Paris Conference.

But such measures appear to have only a temporary and emergency character. I think we have to face the truth that the enormous development of German trade in recent times-however unscrupulous may have been the political uses made of it-by no means has been due only to numerous species of unfair com- petition. Probably it is more largely the fruit of superior enterprise, higher development of education under a logically organized system leading from the lowest to the highest grades, intense cultivation and encouragement of scientific research in every direction, and enlightened readiness, and even eagerness, of To these factors can be capitalists and manufacturers to profit by the latter. added efficient support by Government in suitable cases, and the working together --probably on account of subventions of merchants and shipping companies.

In all these respects we have allowed ourselves to be far surpassed by Germany. The question seems to be whether we are going to make up leeway during the time that the Allies' trade will be protected by the emergency measures resolved upon at the Paris Conference. Those measures are, in their nature, of a temporary character, and cannot possibly be otherwise. As soon as they are discontinued, I think the sources of supply within the Empire will once again tend to fall under foreign (German) control, unless, in the meantime, changes will have taken place at home in all the respects indicated.

I am afraid the foregoing are trite remarks, but from the nature of the subject they could hardly be otherwise. My excuse for troubling Your Honour with them at all is my desire that lack of response to your invitation (which I feared) should not constrain the inference that complete indifference to this far-reaching subject exists here.

I am, &c.,

Tis Honour the Administrator,

Seychelles.

32951

SIR,

No. 30.

HONG KONG.

W. F. STEPHENS.

THE GOVERNOR to THE SECRETARY OF STATE. (Received 29th June, 1917.)

(No. 156.)

*

Government House, Hong Kong, 10th, May, 1917.

WITH reference to Mr. Bonar Law's Circular despatch of the 25th September last, I have the honour to forward, for your consideration, the enclosed copy of a letter from the Hong Kong General Chamber of Commerce, to whom that despatch

* No. 1.

99

was referred on the 20th of November last. On the 15th of March the despatch and the Chamber's letter were considered in Executive Council, and it was agreed that the papers should be circulated, with the permission of the Chamber, among the Unofficial Members of the Legislative Council, with a request for an expression of their opinion; and that thereafter I should draft a despatch for the considera- tion of the Executive Council. The papers were so circulated on the 4th of April, and were returned on the 12th of April. Mr. Holyoak minuted: "I do not think anything can usefully be added to the Chamber of Commerce's replies." Mr. E. Shellim wrote: "The Chamber of Commerce's letters are in harmony with the views of business men in the Colony." Mr. H. E. Pollock, K.C., added: "I agree with the views expressed in the Chamber of Commerce's letter of 8th January, 1917, to the Colonial Secretary." Messrs. Anton, Lau Chu-pak, and Wei Yuk, C.M.G., merely initialled the covering minute paper.

At the meeting of the Legislative Council, held on the 5th of April, Mr. Holyoak, the Unofficial Member nominated by the Chamber of Commerce, gave notice of the resolution, copy of which is enclosed, and on the 19th of April the resolution was moved by him and seconded by Mr. C. E. Anton, the present head in Hong Kong of the firm of Messrs. Jardine, Matheson & Company, Limited The resolution endorses, as far as German subjects are concerned, the views of the Chamber on the subject of the return of enemy subjects. I enclose the Hansard debate on the resolution in question, and copies of leading articles from the four English newspapers commenting upon the debate.t

Subsequently a meeting of the Hong Kong General Chamber of Commerce was held at which the recommendation to exclude all Germans from the Colony for a period of ten years following the declaration of peace, and that subsequently they be only admitted to the Colony under strict licence, was reaffirmed. Later a public meeting was convened with the same object, and the same result, with the important exceptions that no fixed period was named for the duration of the policy of exclusion, and that it is now admitted, to quote from the speech of Mr. P. H. Holyoak, that "it would be presumption and folly to say that this Colony alone should exclude the Germans." I enclose Press reports of both meetings; and before I leave this subject I would like to emphasize the fact, with reference to Mr. Holyoak's remarks at the meeting of the Hong Kong General Chamber of Commerce, that before he moved his resolution in the Legislative Council it was within Mr. Holyoak's knowledge that the letter of the Chamber of Commerce of the 8th of January, which was in reply to a direct invitation for the opinion of the Chamber, and which contained the substance of his resolution, would be sent to you for your consideration. He also knew that the Government could not accept the resolution, for I informed him to that effect immediately after the meeting of Council at which he gave public notice of his intention to move the resolution.

2. Taking now the Chamber's letter seriatim, the first point raised is the importance of the present maintenance, with a view to after-war progress, of the Empire's commercial position in the Far East, with special reference to the questions of shipping facilities and the supply of trained men. The former question, in its relation to Imperial requirements generally, has received, and is still receiving, the closest attention of the Admiralty; while the question of the retention in Hong Kong of men of commercial training has been, and at the time of writing still is, under the consideration of the Commission whose appointment was approved in your telegram of the 7th February.§

3. Under the heading "Imports, Exports, and Industries," the Chamber refer to the Colony's close association with China, to its local industries, to its export trade in Chinese produce, and to the question of trade-marks registered by enemy firms.

4. The question of Hong Kong's relation to China is dealt with by the Chamber at more length under the heading "Fiscal questions" in their letter to Mr. Ross, where they aptly compare the Colony to a depôt or godown. I may make the suggestion that goods in transit through this godown could, by an extension of the bonded warehouse and drawback systems, be made free of any special tariff operative within the Colony.

* Of 19th April: not printed.

| South China Morning Post, The China Mail, The Hong Rong Telegraph, of 20th April, and The Hong Kong Daily Press, of 21st April. The Hong Kong Weekly Press, and China Overland Trade Report, of 27th April.

§ 6434 not printed.

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