1946-1947 — Page 5

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Railway, but the handling charges incurred were collected by the contractor who paid a small annual fee for this privilege. The system was never really satisfactory and, since the re- occupation, a scheme has been introduced whereby all hand- ling at Kowloon Station has been done by

done by a Railway Contractor, less 10%, which has been retained by the Railway. The scheme has proved most successful, handling being entirely under Railway control and more efficient. Moreover, the Railway share of receipts from handling during the eleven months has amounted to $53,236.00 which is far in excess of the amount earned under the old method.

12. The future is difficult to forecast. As regards the Passenger Service with Canton, keen competition with the river boats may be expected with a possible reduction in fares, though increased operating costs in the case of both rail and water will preclude a return to the pre-war figures. Through passenger trains with Hankow are dependent on the provision of additional coaches by both the British and Chinese Sections of the Line. The immediate prospects for these services are therefore not bright.

Freight traffic would move in considerable quantities in both directions if the Chinese National currency were stabilized. Exports are moving down to Canton from the interior at present in a fairly steady stream, but they are not booked through to Kowloon owing to foreign exchange difficulties and must needs be smuggled out of Canton by devious methods in order to reach the Port of Hong Kong.

13. Another factor which will have a marked bearing on through traffic potentiality is the increasing unserviceability of wagons on the Canton-Hankow Section. Lack of machine tools and other appropriate equipment has caused unservice- ability to exceed the rate of repair and although, as already stated, some 1261 UNRRA wagons have been supplied to the Line, these wagons were not new stock and they are fitted with chilled iron wheels on which flat spots are developing rapidly. Very few spare wheels exist, and beyond endea- vouring to weld the parts as flats are noticed nothing can be done. Even if sufficient spare wheels were made available, there are insufficient wheel presses to effect repairs. provision of these wagons must therefore be regarded as a very short term policy towards China's Railways restoration programme. Meanwhile, the British Section is also depleted of wagon stock and the delivery date for new stock is uncertain in the extreme.

14.

TRANSPORTATION

The

Despite the difficulties of operating with an inadequate and worn out supply of Rolling Stock and equipment, revenue

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