CO885-11 — Page 22

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PUBLIC RECORD OFFICE

Reference :-

C.O.882/11

PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO

in England.

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This wrong impression should never have been allowed to grow up, and I submit that in future there must be a properly accredited and able representative in London who can at all times supply the Press with the real facts and prevent such alienation of public opinion as undoubtedly took place this time.

Our Financial System.

93. The recent financial crisis has shown us how imperfectly the banking system in Hongkong is centralised as compared with the systems of larger States. Hongkong finances the trade of the whole of South China, directly or indirectly, and it includes among its banks one of the most powerful in the world-the Hongkong and Shanghai Banking Corporation. But there is no banker's bank here as there is in London, or in the areas of the Federal Reserve Banks in America. The connection between the three types of banks I have mentioned is comparatively slight; and in the event of a crisis there is no very obvious means of safe- guarding the banking system as a whole, while providing against The Hongkong and unsound practices by the various banks. Shanghai Bank is in every way predominant, through its large capital, through having its head office in Hongkong, through being practically the Government's bank, and also by reason of its great prestige among the Chinese. This leadership is shared in a less degree by the Chartered Bank.

But it is not so over-

whelming as to enable the Hongkong and Shanghai Bank to play the part of the Bank of England in such a crisis as this. The question is, however, one that should be studied with extreme care. It is my intention, when I can spare the necessary time to do so, to examine thoroughly the systems of the Chinese regis- tered banks and of the native banks with a view to seeing whether centralisation, as applying to them, would be desirable or not. If my study carries me far enough, I may submit a memorandum on the subject for the information of the Government.

Capital and Labour.

94. The importance of a better understanding between Capital and Labour has not been thoroughly realised in the past, though matters have improved since 1922. Lately, the Chinese General Chamber of Commerce has on two occasions entertained repre- On the second occasion Mr. Chow sentatives of the guilds.

Shou-son and I were present. There were no speeches, but there was a general atmosphere of goodwill and friendliness, and con- sequently both parties benefited from these meetings round the tea-table. General Leung also realised the need for improvement in this respect, and held several social parties. The first of them was experimental, only a few brave spirits from six of the guilds being present, but when this proved à success the later meetings were well attended. And out of them grew proposals for forming the "Labour Mutual-Help Society (referred to in para. 96), and for creating some machinery for settling disputes in a friendly manner.

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Proposal for Fascisti Organisation.

95. It is interesting to notice that proposals were made to me from no fewer than three separate parties to form an organisa- tion here on the Italian model. The men who advocated this belong mostly to the class of the old Chinese literati, and it is an interesting proof of the growth of a civic interest and self- reliance formerly lacking among the Chinese of this class. Beyond consulting Mr. Chow Shou-son and reporting the pro- posals verbally to the Secretary for Chinese "Affairs and the In fact, I did Assistant Colonial Secretary, I took no action. not give encouragement to the proposal because such a move- ment would not have commended itself to the Home Government, and also because I knew, from the history of this organisation in Italy, that if once it is allowed to get out of hand it becomes a danger to the community. In any case it would be difficult to find men of the necessary type to become leaders of the movement here.

Labour Mutual-Help Society.

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96. However, the Chinese should be shown tangible signs of protection in times of unrest and intimidation; and this means maintaining an organisation like the Labour Protection Bureau but in a modified form, even in times of industrial and social peace. With this object in view, General Leung has been work- ing hard during the last two or three weeks to have a "Labour Mutual-Help Society formed, whose objects would be some- what similar to those printed on the registration form of the Bureau (see para. 48), with only this difference, that while the services of the Bureau are given absolutely free, the new Society will require a small entrance-fee and a monthly subscription. It is conceivably impossible for the Bureau to be run on a permanent basis at Government expense, and therefore some such organisa- tion as the one projected seems to be the best alternative.

97. There is nearly as much need for the promotion of a spirit of understanding and sympathy between the guild leaders and the ordinary guild members, as between employers and employees. I have received a very interesting suggestion from Mr. Hon Man-wai on this subject. Mr. Hon is himself the head of the powerful Chinese Engineers' Guild, but he maintains close personal relations with the lower ranks. His suggestion is that there should be a development of night schools for members of the guilds, to be run only by men of proved loyalty and approved qualifications, whose work should be partly voluntary. It is my desire to help towards the realisation of this very worthy object. as soon as normal conditions are restored.

Importance of keeping Pleasure Resorts Open.

98. An soon as confidence had been somewhat restored, the first thing missed by the Chinese of the upper and the lower class seemed to be the Chinese theatre and the tea-house respectively. I had known of the fondness of the Chinese for these pleasure resorts, but their hankering after them as evinced during the The Government. strike, had a force which surprised me.

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لها المحدودة .