CO129-595-9 The British Military Administration of Hong Kong- report- 1946 11-7-1946 - 2-9-1946 — Page 148

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Hongkong has now been thrown open to private trade, though there are still limitations upon that trade. It

is not easy to forecast the speed and volume of private supplies which will result, nor is it simple to gauge the final effect upon the Young and the Brett supplies. There is however a more immediate problem, namely the distribution of supplies which are in the offing and which may be expected to flow through Government channels to Civil Affairs in the next three months. The distribution of these supplies is visualised as being co-ordinated with some form of price fixation. If the two were not combined a serious part of the value of these stores would be lost. Prices in Hongkong dollars have re- gistered a steady decline; but there are still hundreds of price levels which are absurd - some of these being the prices charged for services. A concerted attack upon the cost of living must be launched as soon as supplies are in hand. This may best be achieved by the controlled sale of goods through existing distributive systems, this department acting as the wholesalers, and charging a small sum for the service rendered.

During the past three months land and water transport has been coping with ever increasing traffic with inadequate and depreciated equipment. The arrival of the Transport Com- pany will do much to speed up the work of rehabilitation. The transport of foodstuffs by water necessitated the bringing into commission of all small vessels capable of sailing on the waters. Some of these were ex-Japanese craft which according to the surrender agreement, will be handed back to the Chinese Government. Meantime they have been used for immediate food- needs. Many questions relating to the surveying, charter-hire and repair of these vessels are outstanding, and it may be some time before they are finally settled. It is highly desirable for all private dock and godown companies to get back to a normal commercial basis of working as soon as possible. Ferries badly require repair and reconditioning, as overloaded trans- port of this nature can be dangerous. The lack of an adequate number of ship surveyors has caused some concern.

Since the re-occupation, a number of factories or indus- tries have begun to operate. These include printing, soap, rattan ware, tanneries, flour and rice mills, building lime, matches, paints, rubber and canvas shoes, native boats, nails and bakeries. Recently a scheme to bake and distribute bread was introduced, and bread is now on sale at fifty cents a pound. The shops in the scheme report that all bread is sold within an hour. As soon as greater stocks of flour are in sight the scheme will be broadened. Two months ago bread was reported on sale at over six dollars a pound. Rice has been sold at an uneconomic level for economic purposes.

Certain stocks of raw materials have been requisitioned from the Custodian of Enemy Property. These are being sold to factories at replacement c.i.f. cost plus charges or at 1941 prices plus a reasonable percentage. Gradually the wheels will begin to turn. Rehabilitation of the heavier industries, such as dockyards, iron foundries, will be delayed as war damage, in some cases, is extensive. The cotton textile in- dustry is at a standstill because of the lack of raw material. The weaving and knitting machines are in good order and can operate as soon as yarn is available. In the future there may be room for a spinning mill in Hongkong to process raw cotton into yarn, for local and export needs.

A creditable amount of relief work has been carried out and over 23,000 meals are issued daily to the destitute. Need is the only qualification for receipt.