CO129-443 - Governor Sir May - 1917 [7-9] — Page 234

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maintain the nucleus of important British lines such as this Indo-China Calcutta line, and also in order to conserve the goodwill, built up with expenditure of much labour and money, and prevent it from passing to alien competitors. It seeme preferable to us where valuable interests are at stake, as we judge in this case, and where more than one Company is in question, to endeavour to maintain the mcleus of each Company's line, rather than entirely to withdraw the whole of any one Company's, connections, by repeated Requisitions, and to leare another Company alone on the established route.

▲ disadvantage now experienced more and more acutely from the withdrawal of British steamers, is that British interests are suffering at the hands of Japanese competitors. Thus the India Cotton Yam interests are threatened with the loss of their goodwill and long standing comections in Hongkong and China owing to the withdrawal of British shipping faciliti- -es between Bombay and China, and the practice of Japanese giving preference to their own shippers and own interests. The Bombay Tarn Merchants in Hongkong represent that Japanese ship- -owners are declining British Yarn shipments in order to carry Raw cotton for Yarn spinners in Japan: the Japanese Ship-omer and Mill-ower thus combining directly or indirectly to divert the Indian Manufacturers' Yarn market in China to Japanese spinners to the detriment of British shipping, manufacturing, and merchant interests. As a further illustration of these disadvantages to British Shipping and Manufacture, prominent Calcutta merchants wrote on 23rd. June to a Hongkong Sugar Refinery with regard to the supply of Gunnies:-,

"Owing to Government commandeering steamers the Agents "have been compelled to cancel space for 100 bales *June shipment. They also inform us they will probably "have to do the same in respect of 300 B/s July ship- "-ment.Out of 200 Bales for August shipment we have "been allotted 100 bales space".