CO885-(25-26) — Page 538

TULUI

CO.885/25

PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-

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As you are aware, there was a conference under the auspices of the British Imperial Council of Commerce in London in June of last year, and at that con- ference Mr. C. H. Ross, a former member of the Legislative Council of this Colony, represented the Hong Kong Chamber of Commerce. The leading subject of the conference was trade during and after the War, and, in part reply to your inquiries, I enclose copy of a letter addressed to Mr. Ross, outlining the views of the Chamber at that time.

I am directed to supplement this with the following points of importance to this Colony which have occurred to my Committee.

Imports, Exports, and Industries.

Hong Kong is essentially a great shipping port and trade emporium, and as such cannot be dissociated from the neighbouring State of China, which, indeed, pro- vides the most important commercial field for Hong Kong enterprise. Whatever Imperial policy is adopted for the future, in the interest of Hong Kong, provision must be made for its peculiar relationship with China, and no measures should be taken which would be likely to be detrimental to the further expansion of the import and export trade with China; and tariff regulation should provide for these circumstances. As a shipping port it is essential to foster and stimulate the important ship and engine repairing and dry-docking facilities, also the ship and The shipbuilding plants engine building establishments which at present exist. which are actively employed in replacing depleted tonnage are now an important Imperial asset of recognized service to the Empire.

The considerable sugar refining industry should also be protected in any measures which may affect them, as also such industries as the cement and rope works.

The export trade in Chinese produce is open to further development, which would be stimulated by the scientific absorption by Great Britain of produce previously largely exported to the Central Powers, where various products, such as essential oils, cantharides, hides, human hair, wood oil, coco-nut oil, pea-nut oil, star aniseed, gall nuts, tobacco, tea oil, partridge canes, ginger, turmeric, galangal, nux vomica, kwongsi cassia, bristles, and soy were subjected to scientific treatment and re-exported to the Allied countries in manufactured form. This is a matter which will no doubt form a question for research and studied attention on the part of the technical bodies now being formed at home for the purpose.

With regard to trade-marks belonging to enemy firme, these should be expunged from the register, and their re-issue prohibited. The Honourable Mr. Holyoak has already voiced the opinion of the Committee in the matter, and nothing more can usefully be added to the remarks of the Chamber's representative on the Legislative Council.

Return of Enemy Subjects.

It would seem impracticable in these days of trade and interwoven interests to permanently bar the return of present enemies, although this would tend towards sounder commercial conditions; but a strong advocacy exists for deferring their return for a minimum period of ten years after the declaration of peace, and when allowed to return to the Colony it is urged that it should be only under licence, in similar manner to which British merchants submit in Russia.

With regard to residence and trading by friendly aliens in the Colony, since the Chinese form so large a proportion of the community, it is difficult to suggest any particular form of control, but it might be practicable to institute a form of registration, and it is urged that more effective control of all alien and native firms should be aimed at especially should alien and Chinese corporations trading as Hong Kong registered companies be better controlled. It is a matter of common knowledge that the requirements of the local Ordinance are frequently ignored- that there is in fact no real control, notwithstanding the elaborate paper machinery. The books of all companies seeking the protection of the Hong Kong Companies Ordinance should be kept in English, as previously contended by my Committee, and properly qualified auditors should be insisted upon.

My Committee believe that the present system of ascertaining the qualification of an auditor of Chinese companies is derided by the Chinese themselves.

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Insurance.

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As to restrictions and control to be placed upon insurance companies, it seems desirable that legislation should provide that British traders or insurance companies shall insure and reinsure only with British companies, and that British insurance companies doing business through agents shall employ only British agents on Empire territory.

A special tax on all premia secured by foreign companies doing business on Empire territory should be imposed.

It would be well to provide further, that the books of all foreign insurance companies shall be open to inspection by properly appointed auditors, and that such books shall be kept in English.

Shipping.

The ton-for-ton policy, as part reparation for submarine outrages, which it is hoped will be adopted, should provide an effective check on the enemies' shipping expansion. Ships belonging to the Central Powers should not be allowed to use British ports on the same terms as before the War, and subsidized ships of their flags should be subjected to penalties. Should it develop that Germany proposes to use British ports as stages on a route leading to the development of Whampoa in an attempt to divert trade and shipping from Hong Kong, port dues from Suez outwards should be placed on differential terms, and coaling facilities restricted against German ships employed in such a policy. It is also desirable to consider how far it would be practicable to apply port dues to alien shipping on reciprocal terms, according to the flag in question.

Commercial and Industrial Policy.

It is strongly urged that the most effective way to meet competition, and to handle the Empire's vast resources in and for the Empire's interests, is by practical knowledge and business organizations, assisted and supported by legislation, which should at least know the real commercial outlook and not merely the political one.

In view of the fact that a conference of representatives of the United Kingdom, the Dominions, and India-as foreshadowed by the Prime Minister recently--may at some future date be convened, it appears desirable to my Committee that applica- tion should be made by the Colonies to have their nominees present on that occasion. If this cannot be arranged that Colonies should at least have the right to send their representatives, elected by the Chambers of Commerce, home to advise the Secretary of State, who, in the scheme outlined by the Prime Minister, will represent the Colonies at the conference.

My Committee also consider that the Colony should elect its own member of the Imperial Parliament, and that the services of a Commercial Attaché to South China should be procured at an early date. This latter suggestion is one that has received great consideration from my Committee, who are satisfied of the necessity of having a commercial expert to assist in the future commercial development of the Colony and the Empire trade generally.

I have, &c.,

The Honourable

The Colonial Secretary.

C. H. Ross, Esq.,

E. A. M. WILLIAMS,

Secretary.

Hong Kong General Chamber of Commerce,

Messrs. Matheson & Company, Limited,

3, Lombard Street, London, E.C.

DEAR SIR,

Hong Kong, 21st March, 1916.

I AM to convey to you the thanks and appreciation of my Committee that you find yourself able to represent this Chamber in the Council of the British Imperial Council of Commerce in the place of the late Mr. E. A. Hewett, C.M.G.

There will be, as you no doubt are aware, a conference in London during the week commencing 5th June, 1916, to which all members of Council and certain special delegates from overseas will be invited.