Sessional_Paper_1923 — Page 70

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12. Colonel Thomson supplied the Government with a list of thirteen steamers which were to be requisitioned, namely:

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S.S. Haitan, Hai Hong, Manapouri, Castlefield, Telemachus, Pheumpenh, Ching Chow, Patriot, Lien Shing, Hai Mun, Brisbane, Rotorua, Upolu; to which list was added the S.S. Wollowra, referred to in paragraph 7.

These vessels were mostly old and out-of-date. Not one of them was suitable for full requisition for Imperial purposes, and several of them would perhaps not have been running at all, had it not been for the war.

13. In February and March, 1918, telegrams were exchanged between the Hong- kong Government and the Colonial Office and it was finally arranged that the requisi- tioning should be done by the Commodore in the name of the Imperial Government, but that the Colonial Government must accept full responsibility for the financial result of the scheme. The Hongkong Government proposed that the profit, if any, after payment of local expenses, should go to the Imperial Government, subject to the Imperial Govern- ment guaranteeing the Colony against heavy loss, but the Shipping Controller was unable to accept this proposal. It was laid down that "the Imperial Government is in no way interested in the financial arrangements or their results except to see that remuneration of Colonial registered vessels is not appreciably higher or lower than that of competing vessels registered and owned in the United Kingdom.'

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14. On the 14th March, 1918, Sir Henry May read the following statement to the unofficial Members of the Legislative Council:-

"I have asked you to meet me this morning in order to inform you of certain instructions that have been received from the Secretary of State for the Colonies in connection with a scheme for bringing under control the re- maining British vessels on the China Coast, which are still being run on the owners' account, without supervision.

As you are no doubt aware, Companies such as the Indo-China Steam Naviga- tion Company and the China Navigation Company, whose vessels are registered in the United Kingdom, are running those vessels at fixed rates under what is known as liner requisition, the profits over and above those rates being taken by the Imperial Government. It has been decided to inaugurate a similar scheme as regards vessels registered in India, Singapore, Hongkong, and Shanghai, under the general control of Colonel Thomson, a shipping expert who is now in the service of the Government of India. Colonel Thomson visited the Colony early in the year in con- nection with this scheme.

This Colony is concerned only with vessels registered in Hongkong and Shang- hai, fifteen in number. The circular letter, which you have in your hands, outlines the scheme under which it is proposed to control these vessels. As far as it is possible to foresee, there will remain, after payment of all charges, a substantial profit to the account of the Government. I need hardly say that the purpose of the scheme is not that the Government should take over a profitable commercial undertaking. Its object is to secure that all tonnage available is utilised in the most economical way, and that any surplus tonnage is without delay diverted to meet pressing needs.

I have represented to the Secretary of State for the Colonies that, although, as I have said, there is every prospect that the scheme will be a profitable one, yet there is an element of financial risk which might assume serious proportions in the event of enemy submarines, raiders, or minelayers appearing in these waters. The scheme is a matter of Imperial policy, in which the Colony has no direct and separate interest; and I have accord- ingly suggested that the Imperial Government should take over all respon- sibility for war risk, on the understanding that they will receive the net profits of the undertaking. I have not yet received a reply to that sugges- tion. I may mention that enquiry has been made regarding the market rates of insurance against war risk, and it is considered that the Government would not be justified in paying the very considerable premia demanded.