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4. Before proceeding further it will be convenient to explain in some detail paramount importance of the rice trade to the Colony of Hongkong. Rice is much largest commodity dealt with in the trade returns and a large number of ships employed in bringing it to the Colony and in carrying it away after it has been with. The handling of the cargoes both at the ships and on shore gives employm to a large portion of the floating population as well as to a large number of the coole class. The companies and individuals who own godowns also derive great benefit from the storage of the rice while in course of preparation for export. For the year 1918 the value of the rice imported was no less than £12,904,321, while the exports for the same period were valued at £11,608,509.
assuraneo was given immediately that it was not intended to prohibit transhipment of rice at Hongkong. At the same time acting on the report above quoted a Japanese was about to make arrangements to divert two ships loading in Saigon so that they ould proceed to Japan direct without calling at Hongkong. This was averted.
10. It was obvious that with a view to controlling the price and preserving the le immediate action was necessary, and after some discussion it was decided to call meeting of the principal employers of labour to consider the whole question. After meetings it was decided that the only feasible course was for the Government to urchase rice and, subject to the approval of the Councils, this situation was accepted July enquiring whether it would be possible for the Government of Hongkong to buy y the Government. A telegram was sent to the British Consul at Saigon on the 1st
months for the purpose of local consumption, and on the 4th July the Consul am rice from the 1st August up to a maximum of five thousand tons a month for rested that the best course would be for the Government to approach the Food Con- eller at Singapore with a view to buying 27,500 tons of rice which he was willing to being considerably higher. This suggestion was adopted, and on the 11th July Food Controller could sell 27,500 tons Saigon rice July allotment for October a telegram was received from the Colonial Secretary, Straits Settlements, stating that delivery at $13.30 Saigon dollars ex mill, and requesting the Government, if it wished or this rice, to remit to the British Consul at Saigon $1,500,000 Saigon dollars for the ecessary advances.
5. As has been often pointed out the Colony of Hongkong is in the unique posite among the great ports of the Empire of producing practically no raw materials, but the other hand of possessing in its geographical situation and in its splendid har unrivalled opportunities for dealing with an immense transhipment trade. It is in fact in the nature of a great wharf and godown where every class of goods can be handled expeditiously provided the machinery for doing so is kept at the highest pitch of thell, the price being about $13 a picul (Saigon currency) E.o.b., the market price at the ciency and without any unnecessary restrictions retarding smooth working. Nothing could be more fatal to local trade than for an impression to be created in the grai markets of the world that the Hongkong Authorities might place obstacles in the way of the quick despatch of cargoes, or interfere with contracts connected therewith.
6. With regard to the rice trade a step in the right direction was taken not long; ago by the standardizing of rice by the Exporters and Dealers Association of Hongko in accordance with the repeated request of the California Rice Association. Prior to the adoption of this measure no limit was placed upon the amount of broken grains mixi with good whole rice, with the result that serious complaints came from America buyers. It is expected that the action taken by the Exporters and Dealers Associati will have the effect of restoring confidence among buyers in America and elsewhere whereby this valuable trade will be retained in Hougkong.
7. The bulk of the imported rice comes from Saigon and Bangkok, and is usually packed in single gunny bags of about 160 catties weight (213 lbs.), and, with the exception of some shipments to Japan, is never re-exported from Hongkong in the original bags. The principal grade of rice exported is known as "Siam usual", and is ordinarily made from a mixture of Siam rice and Saigon long rice in equal parts. Before mixing, the rice is screened so as to bring the amount of broken grains down to the standard. In the case of brown rice, especially when the season is advanced, it is the custom to winnow the rice before packing as it generally contains a quantity of dust and husks. The American market takes rice in 100 pounds double guany bugs and! sometimes in double bags of 240 pounds. The Cuban market also takes the latter packing, but shipments intended for South America are usually packed in double bags of 193 pounds gross weight. It is this work of standardizing and re-packing, which makes the trade of such importance and gives employment to the large number of persons referred to in paragraph 4.
8. There is only one crop a year in Siam and Indo-China, the Siam crop being avail- able in December and January and the Saigon crop about a month or so later. Rice is, however, exported from Hongkong all the year round according to demand. Japan has been recently the largest customer, the United States of America coming next. short time ago shipments for the Cuban market went to the Pacific ports of the United
Unti! States, and were transhipped thence to their destination; but latterly Cuban buyers appear to have preferred to make direct shipments.
9. It will be clear from the account given in the foregoing paragraphs that the situation presented considerable difficulties, and the receipt of a telegram on the 14th June from H. M. Chargé d'Affaires at Bangkok to the effect that the Government of Sian bad prohibited the export of rice from Siam as from the 12th July except under licence did not tend to improve matters. The price of both Siam and Saigon rice continued to rise the former to $15 a picul and the latter to $13 a picul, the poorer grades being rather less. To show how sensitive the feeling was in other countries it may be mentioned that on the 26th June a telegram was received from H. M. Minister at Tokyo stating that the Japanese Minister at Bangkok reported that transhipment of rice at Hongkong was to be prohibited shortly and enquiring whether the report was correct.
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11. The Officer Administering the Government thereupon summoned a meeting of which the Colonial Secretary and Mr. R. O. Hutchison were present, when it was decided Unofficial Members of the Executive and Legislative Councils on the 15th July at
of the proceedings is attached to this report. (Appendix 1.)
purchase the 27,500 tons of rice offered by the Food Controller, Singapore, À note
12. It was realised that the Government would have to face a considerable loss of money in giving effect to the decision to purchase rice, and it at once became apparent hat the loss would be increased owing to the high rate of discount on the Hongkong kllar at Saigon. The discount at first was 28 per cent., but on subsequent purchases was somewhat lower. The Treasurer arranged with the Hongkong and Shanghai Banking lebted to that institution for the valuable assistance rendered in this matter and for Corporation for the financing of the purchases in Saigon, and the Government is much moderate rate of four per cent. interest that has been charged on the overdraft. On the 26th July a telegram was received from the Colonial Secretary, Straits Settlements, te the effect that owing to an error the Food Controller had offered 27,500 tons whereas 1,700 tons only were available, the balance having been sold to the Netherlands Indies. As no further supplies could be got from Saigon except at a prohibitive price it became Decessary to make purchases locally and this was done to the extent of about 10,0X tous principally of broken rice to mix with the Saigon rice on arrival.
13. Mr. R. O. Hutchison was put in charge of the general control of the rice position and five of the leading Chinese rice merchants were invited to act on a Committee to arrange the purchase and price of rice for local consumption. Sufficient godown space was rented and everything was in order to begin sales on the 1st August.
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14. Unfortunately at the end of July typhoon weather prevailed and it was im- possible to convey rice across the harbour to Yaumati. The result was that a portion of the population started looting rice shops and a riot took place outside the Yaumati Police Station. The Naval Authorities lent the tug "Cherub" and the Military Authori- ties the tug Omphale" on the 28th July, which made it possible to send some rice to Yaumati and Hunghom. With the exception of some looting no other disturbances ccurred. The rice was guarded by Military escorts for two days while being conveyed from the tugs to the shops. In Victoria louting on a rather serious scale took place for about a week, and it became necessary to start the Government sales of rice before the organization was completed.
15. It will be convenient to deal now with other measures taken to obtain supplies of rice. The July crop in the New Territories was a good one, and in order to ensure that the rice did not go into Kuangtung all export except to Hongkong was prohibited,
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