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25. It is estimated that only about one-third of the imports into Hong Kong consists of goods intended for retention in the Colony and that less than one-tenth of the exports are of goods originating there. The bulk of the trade of the Port is transhipment or entrepôt. The very important function which the Port performs in this respect is due to the fact that between Shanghai and Indo-China there is no other deep-sea harbour having convenient access to the interior as well as safe anchorage and efficient equipment and facilities. Goods in transit to and from China and other Asiatic countries must in the main be conveyed in deep-draughted ships and discharged at some point into smaller coasting vessels or into houses ashore, or vice versa as the case may be. Hong Kong serves this purpose, and is able to secure the business because of the position of its excellent Harbour coupled with the cheapness of its facilities.
Existing facilities of the Port.
26. PIERS. The waterway of about 17 square miles in area between the island of Hong Kong and the mainland forms a magnificent natural harbour and has a depth varying from 24 to 78 feet, there being a rise at spring tides normally of only about 8 feet. This small range of tide renders it unnecessary for enclosed docks with locks to be provided, and therefore the accommodation for the berthing of vessels has taken the usual form in such circumstances, viz. fixed piers projecting from the shore into the waterway.
27. They are of varying design and utility and have been constructed around the Harbour to serve particular trades. The majority of them are privately owned and stand on sites that have been leased by the Government at an annual rent. There are also some, called temporary piers, that are held on annual licence from the Government. The history of the leasing of the permanent piers is important, for it is the matter of these leases that has largely given rise to the present problem, as will be gathered from the mention of them in the terms of reference.
28. Prior to 1899 such piers as were in existence were let on varying conditions but in that year it was decided to grant pier leases for a term of 50 years ending on the 31st of December, 1949. Leases granted after 1899 were made to expire on the same date. The leases gave the right to the lessees of erecting and maintaining piers in, upon, over, across and above the Crown foreshore and Crown land covered with water, subject to the payment of a rent and to the observance by the lessees of all the provisions of the Piers Ordinance, 1899, and of any Ordinance at any time thereafter amending or substituted for the same and also the observance of any regulations then made or thereafter to be made by the Governor in Council, under Section 15 of the said Piers Ordinance, 1899.
29. The rent was based on the extent of the encroachment made by the piers, and a schedule of annual rents was drawn up, the figures varying from $120 for an encroachment of 500 square feet or less to $1,200 for an encroachment of over 10,000 square feet. This scale applied to sites in the City of Victoria; in any other place the scale was one half of those amounts. The term Permanent Pier is applied to piers erected under such leases.
30. There is no condition in the leases giving the lessees the right or any expectation of a renewal of them, and the piers at the termination of the leases thus become the property of the Government.
31. There are two Reports in existence touching on the matter. The first is dated 29th August, 1922, and is signed by Mr. E. R. Hallifax, then Secretary for Chinese Affairs, and Mr. C. W. Beckwith, then Harbour Master. In it the opinion was expressed that it was desirable to aim at the ownership by the Government of all piers, it being presumed that Government control could be made a "sound financial proposition
32. The second Report is signed by Mr. John Duncan, the then Harbour Engineer, and Mr. L. C. P. Rees, then Principal Land Surveyor, and is dated 1st September, 1922. The authors of the Report had been asked to report on certain
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