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4 and 89 of the Merchant Shipping Act, 1894 be exercised by anybody. From our point of view these are serious defects inasmuch as there is now no machinery for dealing with the registry or transfer of Hong Kong registered ships. There are other examples which could also be given.
3We think, therefore, that the draft should be amended to cover the points made above. How this should be done is not perhaps for us to say, but our points might be met by amending the definition of "enactment" or by amending paragraph 2 (1) and (2) so as to cover expressly the Hong Kong Defence Regulations and the Merchant Shipping Acts 1894 to 1940. The disadvantage of this latter course is that it may leave uncovered certain other functions of the Governor of which we have not yet thought but in respect of which provision ought to be made.
This brings me to another point. We understand that prior to the occupation of Hong Kong no agreements had been reached between the Governor and local shipowners as to the terms and conditions governing Hong Kong requisitioned ships. Accordingly compensation in respect of the requisition by the Governor falls to be paid under that Hong Kong Ordinance which corresponds with our Compensation (Defence) Act, 1939. After the occupation of Hong Kong we took possession of these ships "on behalf of His Majesty" leaving the question open whether this was a fresh requisition by ourselves or whether it was action taken under the original requisition which was of course effected by the Governor on behalf of His Majesty. Probably, though by no means certainly, any compensation payable after the date of the taking of such possession would fall to be paid by us under the Compensation (Defence) Act, 1939, if and when it becomes possible to make such payments. This, however, leaves open the question of compensation payable in respect of the original requisition. Surely this is a point which ought to be covered. There are, doubtless, other claims against the Governor in respect of the requisition of other property than ships.
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Lastly I should like to raise another matter. The proposed draft if amended to cover the above point) will vest in the Secretary of State for the Colonies all the functions of the Governor in relation (inter alia) to shipping. We should like you to consider whether it is not administratively inconvenient to have two Departments in London dealing with shipping questions, one the Ministry of War Transport dealing in effect with all shipping questions except those relating to Hong Kong ships and the other the Colonial Office dealing with Hong Kong shipping questions. We therefore suggest that it would be desirable under the proposed Order for all the functions of the Governor in relation to
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