Sessional_Paper_1912 — Page 26

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(e.) Sites for the houses of the Trust should be selected. The following are tenta- tively suggested:-A house in the neighbourhood of the Sailors' Home. One in the neighbourhood of the Sei Foo Row and Oriental Hotels. Two on the premises of the Hongkong and King Edward Hotels, or in the imme- diate neighbourhood if the existing bars cannot be leased. One in Praya East. One in Tsim-Sha-Tsui.

(f.) Arrangement should be made to obtain managers for these houses through the Agency of the People's Refreshment House Association. A general manager thoroughly conversant with the liquor trade should also be engaged. The managers should be partly remunerated by a percentage of the profits on games and non-intoxicating liquors.

3. The Committee consider it to be impracticable, if the Trust is to succeed financially, that any public houses should be allowed to remain in competition. It would seem that public bar is not a necessary adjunct of a hotel qua hotel; although a hotel should be per- mitted to sell liquors to bona fide guests.

4. The question of compensation is one of some difficulty. A considerable amount of capital has been invested by the holders of publicans' licences in the reasonable anticipation that such capital would eventually be recoverable, and it would seem equitable that some compensation should be given. The amount should not be large and it should be in the form of Trust debentures. It would be necessary to treat each case separately, and the matter should be referred in the first instance to the Directors of the Trust. No compensation should be given in the case of a house which has been transferred after notice of termination of the licence.

5. It is considered inexpedient that the Trust should take over any licences, which inay be surrendered prior to December, 1915. It is probable that houses so taken over would be run at a loss in competition with licensed houses, and in so far as the existing sites are undesirable it would in any event be necessary to close a house so taken when the Trust came into general operation.

6. In the opinion of the Committee it is uncertain whether sufficient capital would be forthcoming if no rate of interest were guaranteed. If, as there is every reason to suppose, the Trust will be worked at a considerable profit, the Government may safely guarantee interest at 4 per cent, and such guarantee would at once render available any sum of money that might be required. It would seem to be unnecessary at the present time to specify the amount of capital that will eventually be needed, as money can be obtained as required by the issue of debentures from time to time. It is recommended that profits in excess of the rate of 4 per cent should in the first place be applied to the payment to the Government of a sum equal to the amount of the existing licence fees, and that any balance should be divided between the Government and the debenture holders: Provided that the total amount to be received by the debenture holders shall not exceed a sum equal to 7% per annum on the amount of the debentures.

7. The Directors should have full control of the Trust and should be paid fees approx. imating to the fees paid to the directors of public companies. The policy of the Govern- ment should be safeguarded under the prospectus and the Articles of Association of the Trust.

8. With regard to the sites of the Trust's houses the Committee are of the opinion that there should be no bars in Queen's Road. It is suggested that there should be three houses on or near the water front for the convenience of the shipping, and two houses in the Central district should be sufficient for the needs of the general public. The site of a house in Kowloon is immaterial. Arrangements might be made with the Station Hotel, or the Humphreys Estate Company might be prepared to lease part of their premises in Nathan Road.

9. If all publicans' licences are withdrawn the only competition to which the Trust will be subjected will be that of Canteens, Institutes, and Clubs. It is understood that the hours during which Military Canteens sell liquors are restricted, and the Committee are of the opinion that similar restrictions should be placed on all Canteens and Institutes, as for instance the Police Canteen and the Sailors' Home, which sell intoxicating liquors. With regard to Clubs it is suggested that licences should be issued in respect of the sale of liquors