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Since 1573 the San-on district gazetteer has recorded the more impor-
-tant events, and Sung Hok P'ang's collection gives some interestingbiographies.14 The two best-remembered worthies are the Viceroy ofCanton, Cho Yau-tak, and the Governor, Wong Lai-yam, who in 1669successfully petitioned the Emperor K'ang-hsi to rescind the order forevacuation and are commemorated in the study-library named afterthem in Kam Tin, to the east of Yuen Long. Ancestral halls, study-libraries, temples, forts and walled villages remain scattered about theNew Territories, often overshadowed by new developments and diffi-cult to discover. Also in Kam Tin are the Tang clan walled villagesof Kat Hing Wai, Wing Lung Wai, and Tai Hong Wai, and the Hakkafolk museum of Sam Tung Uk in Tsuen Wan, all of which give anindication of life in the New Territories before 1898.15 The TungChung fort on Lantau is a fair representation of a fortified militaryheadquarters rather than a serious defensive work; the walled city ofKowloon was a larger version of a similar installation.
The lack of co-operation from Canton and the abortive insurrectionprovided an excellent excuse for the British to clarify the walled cityquestion -to their own advantage. The quickest and most attractiveoption was to withdraw the concession on the continued Chineseg
33�X A HISTORY OF HONG KONG
jurisdiction over the walled city; it was therefore discovered that the military defence of the colony was imperilled by this, and British rule wa:; unilaterally imposed on 27 December 1899. 1s far as the British were concerned the walled city was from that time integrated with the colony; the Chinese reserved their views, but from time to time made it clear that they did not agree. Many of the Hong Kong British would have pressed for absolute cession of the territory, but the British government was consistent in its policy of not encouraging other powers to make further demands on China. That did not stop suc-ceeding Governors from agitating for advantage to be taken of any opportunity to convert the lease into permanent possession -May in 1905, Lugard in 1909, Stubbs in 1921 and Clementi in 1927.
One reason for the delay in taking possession of the New Territories had been the desirability of waiting until a new Governor was in post. Sir Henry Blake, who arrived in the colony in November 1898, was a large, cordial Irishman with all the qualities of humanity that his predecessor John Pope Hennessy possessed, and a great many others beside. By 1898 he had fifteen years' experience of colonial governor-ships, in the Bahamas, Newfoundland and Jamaica. Since he had served eight years in his last post, a long home leave had delayed his arrival in Hong Kong. He enjoyed stable relations with staff and community alike, although some comments were heard when his wife, Edith, invited the first Chinese ladies to Government House. The fact that Edith's sister was a Duchess (of St Albans) made that rash act more acceptable to the Englishwomen. Blake had gone into the Col-onial Service from the Irish police where he had been a resident magistrate -an excellent school for the art of administration -and he showed a policeman's skills in an emergency, personally attending to plague victims and turning out to assist in typhoon rescues. His appreciation of the Chinese case appears in the book he later wrote:
The Chinese who have come into contact with the foreign Powers regard them as bullies, who have by their destructive prowess forced themselves upon the Middle Kingdom. No definite com-plaint has been formulated in this matter so far; but it must not be assumed that there is no feeling of irritation on the subject ... and we do not know how soon the demand for reconsideration of foreign relations may become inconveniently pressing. 1''
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Responsibility for the New Territoriesm-365 square miles, rather than the two hundred mentioned by Lord Salisbury, was given from the beginning to James Haldane Stewart Lockhart, who combined the offices of Colonial Secretary and Registrar-General. 17 Lockhart was in a different mould to his chief; short, aggressive, competent and Scottish, with little capacity for suffering fools gladly or otherwise. He had been in Hong Kong for eighteen years, since his arrival as a cadet, and combined an intimate practical knowledge of Chinese customs with considerable scholarship. This modified the characteristics of brisk and sometimes unsympathetic efficiency that were often displayed by competent colonial officials, but Lockhart had all the professional's disdain for box-wallahs whose 'object in coming to the Colony is to acquire wealth and return to Great Britain as soon as they possibly can'. These sentiments restricted his usefulness in a colony li\e Hong Kong, populated by Chinese and English whose great object was 'to acquire wealth', and that as soon as may be. It was only to be expected that Lockhart and Blake would not see eye to eye on a number of matters. Although on leave in London at the time the agreement with China was signed, Lockhart was promptly returned to Hong Kong to provide a preliminary assessment: it was later he who agreed the boundaries, hoisted the flag, and accompanied the troops on their brief sweep through the New Territories.
Differences in approach between Blake and Lockhart quicklybecame apparent. On the same night that the British took over the New Territories, three Chinese villagers were murdered. Lockhart dealt with the crime by burning the suspects' houses and fining the village, actions which Blake criticized: 'we have come to introduce British jurisprudence, not to adopt Chinese ways'. Lockhart was 'dis-appointed to say the least . . . British jurisprudence is excellent in theory, but in practice was quite inapplicable.' But Blake's policy of offering a reward was effective; the murderers were caught, tried and sentenced, one to death. Since two of the culprits were gentry members they would, under Chinese law, have been able to escape severe pun-ishment.
Lockhart was also angered to discover that some of the gentry had petitioned the Imperial Magistrate at San-On to prevent the British occupation. He wanted them immediately banished and their property confiscated, but Blake refused, considering the petitioners were per-fectly entitled to take the action they had, and that the Chinese por,u-lation were more likely to be won over by encouragement and fair
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measures than by bullying. Blake and Lockhart were in better agree-ment over the need to preserve as much of Chine.se law and customs as was compatible with British notions.
The task of administering this newly-acquired slice of China was approached with suitable delicacy. The Order in Council dealing with the administration of the New Territories had specified that they were 'part and parcel of Her Majesty's Colony of Hong Kong in like manner and to all intents and purposes as if they had originally formed part of the said Colony' (20 October 1898). Blake, realizing that conditions in the New Territories were totally different from those in urban and developed Hong Kong, where the population had adjusted to British methods, wanted to manage things with a single British Resident, and for the administration to function through committees of elders -thesystem of indirect rule that had been pioneered in Africa. An exception had to be made for New Kowloon, the part of the peninsula that had not already been ceded, and Lantau, both of which areas were con-sidered to be capable of assimilation into the adjacent Hong Kong territory. Assisted by a handful of young cadets, including the brilliant Cecil Clementi, later to become Governor, Lockhart was given scope gently to bring the eighty thousand inhabitants of the rest of the area under Queen Victoria's aegis, without undue offence to settled habits.
Land tenure, in a community of farmers, was a sensitive topic. Unlike the existing colony, in which, being British Crown property, long leases could be granted, in the New Territories the ninety-nine-year Crown tenure limited freedom of movement. The Governor's proclamation that 'commercial and landed interests will be safeguarded and their usages and good customs will not in any way be interfered with'18 was little more than an acknowledgement of the restrictions imposed by the tenure. But discovering what the landed interests were was a complex matter: there were different classes of land, graded according to value, varying types of tenure (individual, ancestral, temple and registered associations), and no fixed measurement of area. Reports were made in terms of 'maus' -about o. I5 acres, but rents were calculated on the amount of grain needed to sow a field. In the absence of any plans it was impossible to be precise as to which fields were described, and often the putative owners were unable to identify their own property. Many were reluctant to do so: 'as is well known, the Chinese are a suspicious race and it is not easy to allay their suspicions once aroused ... Long experience of their own Govern-ment methods has made the inhabitants distrustful of all officials gener-
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ally.' But many who had experience of the reliability of the British administration hastened to buy lands for less than they were worth from the unduly suspicious. MacDonald, second to none in his distrust of the Hong Kong community, claimed that for years past some colon-ists, while agitating for the expansion on patriotic grounds, had surrep-titiously been buying up land on the cheap in what they hoped would become British territoryg-'and a thundering good thing they will make of it'.
In due course things were clarified, and the first survey of the terri-tory was made by Indian surveyors between 1899 and 1903. Roadswere built, telephone lines installed, and effective policing introduced, the previous situation having been chaotic: attacks by pirates and bandits were frequent; one walled village in Lung Leuk T'au was besieged for three months by robbers. Although it remained too easy for bad characters to roam the area, crime rapidly declined with the establishment of regular policing. Since there was to be no immediate attempt to impose British standards and customs, the New Territories were exempted from many regulations, and administered in a different way from Hong Kong. Every village, or unit of one hundred people, was entitled to nominate members of sub-district committees to consult with the government -although in a discreetly paternalistic way. The system of indirect rule was not over-successful; Dr Baker comments: 'the former viability of the unofficial system rested on the unwillingness and inefficiency of the official one', 19 but given an in corrupt and access-ible British magistrate, confidence in the courts developed so rapidly that few requests for help in settling disputes were ever referred to the committees. For the first time the farmers saw an opportunity to escape from the gentry's hold on the land, and of escaping the various clan taxes and payments in kind which had previously been levied. At least one district, Ch'eung Chau, 'voluntarily offered to pay increased Crown Rent, or such increased land tax as I may recommend to be
fair'.All this striving after justice did not come cheap, and the New Territories were an expensive acquisition. In the fir,t eight months $233,034 was spent, and only $7,273 received from all sources. Far from being fertile farmland, 90 per cent was scrub and rock:
Of the_ 1,060 km2 of land in Hong Kong about 67km2 can be
considered as arable land, out of which some 6,943 ha. are farmed.
The rest of the land consists largely of steep and unproductive
A HISTORY OF HONG KONG
hillsides where the soils are generally acidic and low in nutrients ... From the time of the leasing of the New Territories ... until the Second World War ... farmers produced .limited scale only and mainly for home production. vegetables on a 20
The crops grown were not of good quality, and required scientific improvement. The Governor seemed to be scraping the bottom of the barrel in his cautious first report, on 19 February 1900:
It remains to be seen to what extent the New Territory can be developed. Much depends upon the possibility of producing suc-culent grasses or trees of commercial value upon the hill slopes. If the former, there is no reason why a very valuable cattle-breeding industry should not develop. Mr Ford [the Government Fnrestry Officer] is about to try some experiments with camphor trees and vines. Either could be a valuable addition to the resources of the colony.
Although in time the acquisition of the New Territories was to change the whole character of the colony, it was some years before any effect was felt. The territory was large and its population was widely dis-persed, totalling only about one quarter of the colony's total; their habits and independence from the pattern of life in Victoria tended to keep them apart, as it still does in such spots as Tai O on Lantau.
Scoundrelly leaders of secret societies
The 1890s were a time of considerable financial stress for Hong Kong, caused largely by the fall in the value of silver, which made even the Hongkong and Shanghai Bank look shaky. A rumour that the Bank might have to close its doors circulated in January 1890, and caused Sir Robert Hart to transfer �G50,000 of the Customs monies held there to the Bank of England. Two years later he continued to be worried, and wrote on 19 June 1892: 'I have gradually sent most of the H'kong Bank money to the B. ofgE: the outlook is not reassuring.' Hart became quite snappy about the Bank: ' What with its constant cricket matches ... and the careless way of doing things generally ... Its new idea [of appropriating interest] is monstrous.'21
A good deal more monstrous, in the opinion of Sir Robert's Chinese
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employers, was the Hong Kong government's practice of harbouring rebellious Chinese dedicated to overthrowing the Ch'ing Dynasty. The opportunities provided in Hong Kong for young people to absorb Western ideas of constitutional government and to learn the English language were unparalleled elsewhere in China. Some of the first proposals to emerge at the beginning of the 1890s were hardly revolu-tionary. Yang Ch'ii-yiin and Hsieh Tsuan-t'ai had both studied in Hong Kong, where they had been brought up to speak English (Yang to the extent of having very little Chinese), and had discovered in the methods of British government what they conceived to be a workable alternative to the shaky Ch'ing regime. By virtue of their education they were also conscious of how limited were their own opportunities in a rigidly racially restricted British administration. Their society, the Fu-jen wen-se (the Literary Society for the Promotion of Benevol-ence),22 was a mild enough affair, and much less serious than the secret meetings held by the 'four bandits' -Yang Ho-ling, Ch'en Shao-pai, Yu Lieh and Sun Yat-sen -at the Red House (Hung Lau), in Tuen Mun, then still part of Kwangtung province. For the next twenty years the Red House served as refuge, hospital, and bomb factory for hundreds of revolutionaries.
The 'four bandits' had all become familiar with Western concepts and habits in Hong Kong. Sun Yat-sen, the future founder of the Kuomintang and President of the Chinese Republic, was in 1892 the newly qualified, and most distinguished, graduate of Dr Manson's Hong Kong College of Medicine. He had been exposed to British influences for most of his formative years, having been at a Church of England school in Hawaii and Queen's College, Hong Kong except for two short periods at Oahu College and a Canton hospital.
It is possible that the young revolutionaries would not have passed from discussion to action had they not engaged the sympathy of some prosperous backers, including none other than Sir Ch'i Ho Ch'i, that anomalous member of the Legislative Council who had strongly opposed the imposition of Western sanitary and medical methods at the same time as funding the new College of Medicine and the Alice Memorial Hospital. Ho had been one of Sun's supervisors at the College of Medicine, and might almost be regarded as standing in the same relation to him as Engels did to Marx, but he went further in providing support for armed intervention, and himself contributed to the organized thinking about a new society for China. Like other leaders of the Hong Kong Chinese, Ho's command of the Chinese
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language was shaky, and he engaged the services of a collaborator to assist with the publication of his political ideas. His collected works were written with the assistance of Hu Li-yan, who had also been educated in Hong Kong. The essays published as Hsin-cheng Chen-eh 'iian (A Collection of Essays on Reform) started appearing in r 887; they have not been translated into English, but are described by Dr Kit-ching Chan Lau: 'Ho maintained that to remove China's accumulated weakness, Western learning and the Western system must be understood and adopted in their totality, both in terms of spirit and methodology. In doing so, however, a clear order of priorities must be followed. Civil reforms must precede military ones, and the solution of internal problems must come before that of external ones.'
Ho's experience of China was limited, and his models were Britain, of which he had intimate knowledge, and even more Hon. Kong,_ where he played an active part in the government for over twenty years. How far Ho's solutions could ever have been applied to so enormous a country as China, with no experience of formal democracy, is ques-tionable, but many of his priorities were in fact followed by twentieth-century Chinese governments. Ho wanted 'a government manned with like-minded people' (which has, usually by drastic means, been the case in China) and democratically elected (unfortunately still to be attempted), together with the abolition of corruption and the whole-hearted encouragement of all forms of Western education. Only when these reforms had been achieved might radical economic reforms and defence improvements be attempted, instead of the half-hearted and piecemeal efforts which were at that time being made, and which proved ineffectual.
This programme was to be carried out with the help of foreign investment, rather than by adopting an intolerant anti-foreign stance and insisting China could 'go it alone'. Foreigners had already proved what vital help could be given to China through the establishment of the Maritime Customs, and Ho suggested that their powers should be extended to the control of internal revenue duties. By foreigners Ho meant British, for he was a thorough Anglophile, who had a clear bias for Britain, the Western power for which he had the highest esteem. To him Britain was unquestionably the power of powers whose political institutions should be modelled upon.' Moreover,
Ho Ch'i held great pride in and an unswerving loyalty towards his place of origin -British Hong Kong. To him it was the crown
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jewel on the diadem of Biitish power and prestige. It epitomized the very government system he admired and advocated. The Hong Kong education and examination systems were far superior to the Chinese ones. In the colony too commerce thrived and the mer-chant class occupied an important position in society. Ho, above all, held that the Chinese in Hong Kong received fair treatment from the British, and were given every opportunity to rise m society so long as they had the ability to do so.
Events moved from the0ry to action in February 1895 when Sun Yat-sen, who had left Hong Kong on taking his degree, returned to estab-lish a local branch of the Hsing Chung Hui -the Association for the Regeneration of China -which he had founded in Honolulu. Hong Kong, owing to its geographical position and relative freedom from official interference, rapidly became the most important centre of the organization's work. Its members included Sun's old friends from the Red House, but one important new member was the rich businessman Huang Yung-shang, son of Wong Shing (Huang Shen), who had suc-ceeded Ng Choy on the Legislative Council. A locally financed coup was immediately planned, its aim being to overthrow the government in Canton. The coup was well publicized by a not-unsympathetic Eng-lish-language press in Hong Kong, Ho Ch'i having ensured its sym-pathy: the Reform Party, as Sun's organization was called, was described as intending to secure 'judicial reforms, diffusion of modern education, religious toleration, economic development, and improve-ment of local government'; it promised to open more trading centres and ports and the 'repeal of all laws that have a retarding effect upon trade'; all of which was eminently soothing and gratifying to the mer-cantile community.
Advance publicity is not the best of strategies for conspirators, and hardly helped these plotters, whose planning was hopelessly ineffective. $1In October 1895, four hundred coolies were hired in Hong Kong at
0 a head, and shipped off to Canton, where they were immediately apprehended, their arms being found concealed in barrels of cement. Three of the conspirators were executed, but most managed to escape back to Hong Kong, where the Red House is said to have sheltered two to three hundred dejected revolutionaries.
The government of Hong Kong was placed in a difficult position; whatever private sympathies with the aims of the revolutionaries might exist, they did not want to be seen to be encouraging those bent on
A HISTORY OF HONG KONG
the downfall of a friendly power; and the Governor at that time, Sir William Robinson, was no friend of revolution. No arrangements existed for extradition to China on political grounds, but Robinson was willing to consider altering this in return for some tangible benefit -by which he meant the Kowloon extension. Lord Salisbury, evensmore antipathetic to those disturbing the established order, thought itsa 'capital bargain' that Britain should be rewarded while at the samestime disposing of 'a few of the scoundrelly leaders of secret societiesswho harbour in Hong Kong'.23 This cynical piece of realpolitik wassnipped in the bud at the Colonial Office by Joseph Chamberlain, who,sas his involvement in the Jameson raid in the Transvaal in 1895sshowed, was not averse to realpolitik when it suited him, but found thisssuggestion 'monstrous', and blankly refused to consider it.s
Robinson Wa!; able to deal with the problem of Sun Yat-sen by issuing an order refusing him permission to return to the colony. In spite of some protests, this worked, until Sun made the British news-paper headlines in 1896 by being kidnapped in London and spirited off to the Chinese Embassy, whence he was only rescued by the efforts of his old teacher at the Hong Kong School of Medicine, James Cantlie. Michael Davitt, the former Fenian revolutionarys-now a little more respectable, having served two terms in jail and at last taken his seat in Parliament after being four times elected -raised in the House of Commons the question of why Sun should be denied the privileges of political refuge in Hong Kong that he was allowed in Britain. Davitt, a man of great integrity and powers of oratory, succeeded in embarrass-ing the government but not in getting the ban lifted. Sun thereafter avoided Hong Kong, although it continued to serve as an important headquarters for his revolutionary cells.
Ho Ch'i, being a realist, decided that he had backed a loser, and withdrew from public support of the revolutionaries until a more appro-priate time, contenting himself with financing publicity for revolution-ary causes. Events in China were hardly promising. In 1898 the Emperor Kuang-hsii made his bid for freedom and reform, which ended after a hundred days with his abduction and imprisonment by the Dowager Empress. Reformers were executed, but one of the most prominent, K'ang Yu-wei, managed to make his escape to Hong Kong. From that time it appeared that there was little realistic hope that the Manchu Court would permit constitutional reform, and that a success-ful revolution was therefore almost inevitable.
Then, after the Court gave its support to the absurd Boxer revolt,
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and forced an issue with the Western powers that could have only one result, there was no hope at all. When the violently anti-foreign Boxers be!>ieged the Western legations in Peking, an expeditionary force was dispatched, and the rising, which had been for the most part restricted to north-west China, was speedily suppressed. Reparations for the damage done and the two hundred or so Westerners murdered were enormous -nearly a thousand million taels, to be paid in instalments over thirty-nine years. Peking was occupied by foreign troops and the dynasty humiliated beyond recovery. In Hong Kong the Boxers were viewed with shocked d:staste. With only one exception the Chinese press stigmatized the rebels as 'bandits'. The conversion of the Empress to measures of reform was too late to do anything more than stimulate the pressure for revolution.
Conditions for revolutionary refugees in Hong Kong improved with the arrival of Sir Henry Blake in November 1898 and the emergence of an extraordinary tripartite alliance between the new Governor, Ho Ch'i, and that great survivor, Li Hung-chang, who had been exiled to be Viceroy of the two Kwangs. When the Boxer rising began Li, in common with many of the more sensible provincial Governors, could foresee the inevitable outcome, and endeavoured to dissociate himself from it. He went so far as to consider declaring his provinces indepen-dent of Peking, and asked Sun, then in Japan, to meet him in Canton. Sun, also convinced that the revolt would be speedily suppressed and of the wrath that would follow it, agreed. At the time the approach was made to Sun, Blake was absent from the colony, but on the day of his return Ho Ch'i hurried to enlist his support. The Governor was informed of the potential agreement between Li and Sun and shown a proclamation drafted by Ho and agreed by Sun which announced the establishment of an independent southern govern-ment 'headed by Li with Sun Yat-sen's co-operation and Britain's protection'.
Blake was sufficiently in favour to telegraph the Colonial Office the same day to the effect that some 'Chinese gentlemen' had told him of rebellions planned against the dynasty, but that these were in no sense intended to be anti-foreign, and their leaders were indeed hoping for British support. Ten days later this was followed by another telegram which proposed 'that to safeguard British interests, Sun should be allowed to enter an agreement with Li Hung-chang who, according to Blake's sources, offered to arm the "reformers". The Governor believed that the proposed pact was the best guarantee to avert great
340 , A HISTORY OF HONG KONG
disturbance which might develop into an anti-foreign movement in the south.'
Surprisingly enough, the government of Lord S�Palisbury, hardly a friend to revolutions, was willing to consider support for Sun, but only if Li approved; and Li had changed his mind. When Sun reached Hong Kong, on 17 July 1900, Li had been summoned to Peking. The invitation was not accepted immediately, Li being in no hurry to com-mit himself. But he was conscious that his presence in Peking, as the single figre ofinternational eminence, might, as the dgasty crumbled, result in the greatest of prizes -the establishment of Li himself'either as king or president', as Blake put it. Relying on the support of the Powers, Li decided to take the risk, and left Canton on I.he same day that Sun arrived in Hong Kong.
Blake had heard in advance of Li's intentions, by which time he was so committed to the concept of a Li-Sun alliance that he not only asked the British Consul in Canton to dissuade Li from going to Peking, but telegraphed the Colonial Office for permission to detain him in Hong Kong. This peculiar and quite inadmissible request was peremptorily denied by Chamberlain, who replied 'categorically forbid-ding him to detain Li or in any way forcibly interfere with his move-ments'. The Governor and Viceroy did meet, on 18 July, but without Sun Yat-sen, who was kept cooling his heels on board a ship in the harbour. In his conversation with Blake, Li not only made no reference to the previous plan, but urged Blake not to allow the colony to be used by rebellious characters. Ifhe was successful in his bid for power, Li wanted no more truck with revolutionaries. He attempted rather to persuade Blake of the wisdom of this policy, and dwelt largely on 'entering his bid as the "most suitable person of Chinese nationality" to become the ruler of China should the powers be in the position to make the choice if all the foreign ministers had indeed been butchered by the Boxers, as it was widely rumoured'.
gu yn
Blake had not abandoned his position of support for the revolution-aries, and Ho renewed his efforts on Sun's behalf to obtain British backing for yet another venture, a planned rising in Hui-chou, to the north of Kowloon. This was too much; the Governor suggested instead that a petition should be submitted to the Powers, specifying the reforms Sun and his supporters wanted; he then telegraphed Chamber-lain in an endeavour to persuade the Colonial Secretary that the British government should press for these demands to be included in any peace settlement. Ho Ch'i summarized the reformers' programme,
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which was drawn from his own writings on the subject; there was to be a temporary arrangement whereby a head of government would be 'responsive to the people's wishes and subject to constitutional restraints', with active support from foreign representatives, followed by the steady introduction of democracy, modernization and economic improvements, with unrestricted access to trade and industry. It was a programme calculated to appeal to any liberally-minded foreign government, but Chamberlain was having nothing to do with such ideas. Blake was unequivocally ordered to desist and to suppress all types of revolutionary activity in the colony.
The planned revolt went ahead, and, in spite of Blake's unwilling-ness to cooperate with the Ch'ing authorities in Canton to suppress it -he had again to be ordered to do so by Chamberlain -was quicklyand bloodily put down. Once again Ho Ch'i withdrew into the back-ground as far as support for revolution was concerned, and the next,again abortive, plot planned in Hong Kong went ahead without hisparticipating.
The Canton government <lid not rest content with quelling these revolts, but attempted to punish the originators, even when they had been accorded asylum in Hong Kong. On 10January 1901 Yang Ch'ii-yiin, one of Sun's original collaborators in Hong Kong, was teaching an evening class when four men burst in; one 'whipped out a revolver and fired four shots in rapid succession . . . Every one of the shots had taken effect, one entering the head and the others penetrating the left shoulder, chest and abdomen ... not a word was spoken on either side, the whole affair occupying just a few seconds.' It was suspected, and subsequently proved, that the assassins had been employed by the Canton government.
The whole of Hong Kong opinion was outraged, and pressed for vigorous actions against the Canton authorities, but the affair was smoothed over by a variety of methods; Canton, after having rewarded the perpetrators, executed first the actual killer, and later one of the others; a third was arrested in Hong Kong and similarly dealt with. The Viceroy who had instigated the murder died, and although Blake pressed for compensation and further punishments the Foreign Office decided that enough was enough. Blake also managed a moral victory on behalf of the revolutionaries: when the Canton authorities sent him a list of those suspected of revolutionary activities in Hong Kong -among whom was Ho Tung, later Sir Robert Hotung -the Governor responded only by indignantly protesting that none of those named
A HISTORY OF HONG KONG
had been implicated in any way. The real leader, Li Chi-t'ang, was even given extensive police protection against any further attempts at revenge on the part of the Canton government.
Sir Matthews railway
In November 1903 Blake left Hong Kong to take over the Governor-ship of Ceylon, leaving the colony in the hands of the Colonial Secre-tary Frank May24 until the arrival of the next Governor in July the following year. May, who had come to Hong Kong in 1881 after Harrow and Trinity College, Dublin, was a reserved authoritarian of understated efficiency. Twenty years younger than Blake, he did not share his departing master's enthusiasm for radical changes in China, was deeply antipathetic to revolutionaries, and suspicious -otten with good reason -of their approaches to the Governor. Later, when he had himself attained that post, the first cadet officer to do so, he was strongly critical of Ho Ch'i, whom he found 'treacherous'.
May immediately took advantage of his new position to undo some of the late Governor's work by pushing through the Peak Reservation Ordinance, which was designed to exclude non-Europeans from that favoured area. The ordinance was, in deference to liberal opinion at home, put a little less baldly than that, since it included the sop: 'It shall be lawful for the Governor-General in Council to exempt any Chinese from this Ordinance.' In fact the Governor-General in Coun-cil thought fit to do so on only one occasion, when the Anglo-Chinese knight Sir Robert Hotung (who, unlike Ho Ch'i, always adopted Chinese dress) applied. Lethbridge described the Peak as 'Surbiton or Wimbledon, in an atmosphere as truly British as roast beef or muffins.' Chinese, even if they managed to convince the Governor that they were fit to live there, would have been automatically excluded from the Peak Club, 'a centre for tea dances and bridge parties before dinner'. It is reasonable to add that the Chinese, sensible people, showed no sign of wishing to join in such pursuits. Ho Ch'i felt that the Ordinance had 'a decided savour of the nature of class legislation, but having consulted members of the Chinese community he found that they had no strong feelings or objections'; the 'change of phras-eology so as to make it less blatantly obvious that the Chinese were excluded' would suffice.
The move infuriated Blake, who wrote from Ceylon to the Colonial
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Office complaining about this discrimination. He was even more dis-mayed when May deported the editors of a number of Chinese-language newspapers who had been attacking the Ch'ing government. Strictly speaking May did not possess the powers to do this, although the orders of banishment were retrospectively confirmed. The Colonial Office hesitated, but Blake's defence of the citizen's right to 'think and speak what he likes and to act as well so long as he obeys the laws' was not effectual. When the next Governor, Sir Matthew Nathan arrived in July 1904, he backed May's restrictive laws with growing enthusi.sm; one Colonial Office clerk commented: 'Punch would get short shrift in Hong Kong if he was of Chinese nationality.'25
It might have been expected that when Francis May found himself subordinate to a man with as little knowledge of China as Nathan, and two years younger than he was, he might well have felt himselfaggrieved; but he exhibited no sign ofgit. Nathan's prejudices coincided with May's, and their areas of expertise were gratifyingly complemen-tary. Nathan had a number of disadvantages, of which he was strongly conscious. He was young -forty-two -a Jew, from a modest back-ground, with an equally modest rank (Major in the Royal Engineers), and inept in personal relationships. He was also, and so remained, a bachelor, which rather helped matters since Mrs May then became the 'burra mem', senior lady in the colony and entitled to take the lead in social matters.
Although anti-Semitism in England was never as strong as in France, it was not easy for a Jew to become a colonial Governor as young as Nathan had been on his first appointment, which was to Sierra Leone at the age of thirty-seven -and to do so from an army career.26 Suchan advance was only possible with considerable talent, which Nathan certainly possessed, and energetic political backing, which he had from Joseph Chamberlain himself, on whose Colonial Defence Committee Nathan had served as Secretary. These assets were combined with a steady ambition and a suppression of emotional ties which might have interfered with his career (as his successor Lugard's marriage so nearly did with his). Nathan had no intimate male friends, anJ his wide circle of talented and interesting female acquaintances (which included Mary Kingsley) was kept at a certain distance. Not being a pushy individual, although conscious of the importance of maintaining the dignity of his position, Sir Matthew rarely adopted autocratic attitudes; May, with twenty-five years' experience of Hong Kong, was left a free hand in all matters where Nathan did not wish to play a personal role.
A HISTORY OF HONG KONG
It is probable that, in appointing Nathan, the Colonial Office had in mind that the New Territories needed a man with some experience of the District Officer type of government which was normal in Africa. Certainly Nathan showed much interest in the development of the New Territories, and was instrumental in building Nathan Road -'Nathan's Folly', as it was known at the time -in order to link the Kowloon settlement with the hinterland. The project for which he was best fitted, and which became of consuming importance to him, was the Kowloon-Canton railway. A concession had already been granted to the British and Chinese Corporation, a company linked with Jardine Matheson, but between the Corporation and the Canton government -Nathan blamed both for dilatoriness, suspecting that the Corporation's directors were more interested in holding out for a profitable sale of the concession than in seeing the project through -nothing tangible had been done for six years. In 1905 it was discovered that the con-cession to build a line from Canton to Hankow, which in conjunction with that from Kowloon would briQg Hong Kong into direct connection with the heartland of China, was up for sale. Nathan believed that if Britain cooperated with China in buying back the concession it would not only prevent it from falling into the hands of France and Russia, but also stimulate the progress of the Kowloon-Canton line. Using his considerable influence at the Colonial Office, Nathan persuaded them to offer through the Crown Agents a favourable loan to Canton -4.5 per cent at par, a far better rate than any previous loan, and onesthat failed to tempt the market, leaving most of the issue with thesunderwriters.s
Sir Matthew was very pleased with what he called 'his financial coup', but it really was a very muddled affair. It took another year of difficult negotiations with the Viceroy in Canton before final agreement on the finance, building and operation of the railway was reached, which tried Nathan's patience so sorely that he decided to start the line from Kowloon at least as far as the Chinese border. As a pro-fessional engineer he was in his element, but his anxiety to participate in the detailed work caused constant friction both with the contractors and the Colonial Office; Sir Matthew's biographer writes of an 'almost obsessional interest in the railway together with his peevish and over-bearing manner', which had the effect of causing the Colonial Office's initial enthusiasm for the Governor to show signs of waning.
When the railway was eventually opened, to the border in 1910, and all the way to Canton two years later, long after Nathan had left,
A SLIGHT EXTENSION TO THE COLONY
Kowloon developed rapidly. In the fifty years of British occupation prior to the completion of the terminus, building in Kowloon had not proceeded much beyond the line of Jordan Road. Some pleasant residential property had been built behind St Andrew's church, in the area of Kimberley and Granville Roads, but the lion's share of the land was still occupied by th!! services, who had Whitfield Barracks in what is now Kowloon Park as well as a number of smaller installations. Nathan Road, commemorating the Governor, was little more than a track in his own time, and it took the impetus given by the railway for Kowloon to begin emerging as a considerable community.
Nathan showed his abilities to more effect in coping with the prob-lems caused by the Russian war with Japan in 1904-5. The Russian fleet, which had already demonstrated its incompetence by firing on British fishing boats in the North Sea in mistake for the Japanese navy, found its way to the South China Sea, causing the British Admiralty to be nervous lest the Russians should attack Hong Kong, whether intentionally or in error. This resulted in a six-week alert for both the colony's garrison and the China squadron of the Royal Navy. The island became crowded with Russian refugees, who were promptly interned; smuggling of arms to Russia necessitated vigilance, and the Chinese in Hong Kong began to demonstrate their solidarity with the motherland.
The demonstrations took the form of protest, not against Russia, but against American laws designed, according to President Benjamin
Harrison, to 'defend our civilization by excluding alien races' which he meant the Chinese, described by his Secretary of State, the -by'morally obtuse' James Blair, as 'bringing the seeds of moral and physi-cal disease, of destitution, and of death'.27 These laws had been roughly enforced, and when extended to the newly-conquered territories of the Philippines and Hawaii they generated great resentment. Sparked off by a student's protest suicide in Shanghai, a wave of protest erupted all over China. Coolies went on strike, a general boycott of American goods was observed, and American cigarettes were publicly destroyed. The Chinese Chamber of Commerce planned a public meeting in support, which Nathan quickly banned as 'an attack on the commerce of a friendly power'. He also expelled the editor of a newspaper for publishing anq-American cartoons. Nathan was thanked by William Howard Taft, then the United States Secretary of War, but the Col-.onial Office, now under Alfred Lyttelton, was less enthusiastic, and dubious about the legality of the Governor's actions. Lyttelton was
A HISTORY OF HONG KONG
right to be worried about the subject, since he was responsible in 1904 for the decision to admit Chinese indentured labourers to South Africa under conditions which looked to the British public very much like slavery, and which was to lead to the downfall of his government.
This affair may have contributed to Nathan's early removal from Hong Kong in 1906, after only three years in office. It was not that Nathan had made himself actively unpopular either in Whitehall or Hong Kong, although the new Liberal government did not see any reason to favour one of Chamberlain's proteges, especially one who had opposed the Liberal defence cuts to the point of threatening resig-nation, as Nathan did in 1905. His brother W.S. Nathan was also attracting some attention for his involvement in the Kaiping mines administration; there was more than a hint of anti-Semitism in that, since G.E. Morrison of The Times, at the same time as criticizing Nathan, described the mines' chairman as 'a Jew who would cheat his blind grandmother at cards'.28
The real reason for Nathan's premature removal was the redoubt-able Flora Shaw, now Lady Lugard, who wanted her husband trans-ferred to a climate she found more congenial, and the Lugards were hard to resist. Flora Shaw was a rare phenomenon, a successful career woman, an influential journalist and an expert on colonial matters, 'a woman of remarkable ability and enterprise', according to L.S. Amery. She had married Frederick Lugard four years previously when he became High Commissioner in Northern Nigeria. In order to make room for Lugard in Hong Kong, a colonial musical chairs took place. Blake, then sixty-five, was retired from Ceylon, being replaced there by Sir Henry MacCallum from Natal, whither Nathan was unwillingly dispatched, at a reduced salary. Once again Francis May was left holding the baby in Hong Kong pending the arrival of a new Governor.
12
HONG KONG AND THE CHINESE REVOLUTION
Pernicious parliamentarians
When, after succeeding Lord Salisbury, Arthur Balfour's ministry split in December 1905, eleven years of Conservative government were superseded by a Liberal administration under Sir Henry Campbell-Bannerman, which was subsequently strengthened by a decisive elec-tion victory. The new Liberal Cabinet was every bit as virtuous and talented as any of Gladstone's: the Grand Old Man's youngest son, Herbert, was Home Secretary, his biographer, John Morley, had the India Office, Sir Edward Grey was Foreign Secretary, and James Bryce, the historian, was given Ireland; the only note of raffishness might be said to be struck by Lloyd George at the Board of Trade. Among the juniors, at the Colonial Office under the 9th Earl of Elgin, son of the former Plenipotentiary, was the thirty-one-year-old Winston Churchill, a recent recruit to the Liberal Party.
In colonial affairs the new government took a tone strongly critical of its Imperialist predecessor, and one that reflected the moral con-cerns of its Non-conformist supporters. One issue on which the elec-tion victory had been gained was that of'Chinese slavery', a convenient if hardly correct description of the Chinese indentured labour in South Africa. The worst aspects of the 'pig trade' that had so maltreated previous Chinese emigrants had been reformed, but reports from South Africa disturbed liberal consciences. Coolies had been imported on three-year contracts for labour on the Rand mines, where they_ were kept in compounds under harsh and restrictive conditions, with frequent use of corporal punishment, a system which the Liberals
A HISTORY OF HONG KONG
had promised to end. Publil: opinion was moving from chauvinistic certainties and was ready to redress such offences against Liberal morality, of which the old question of opium was not the least important.
On 30 May 1906 Theodore Taylor, a Lancashire Liberal, raised in the House of Commons the motion that 'the Indo-Chinese opium trade was morally indefensible', and asked that 'such steps as might be necessary for bringing it speedily to a close' should be taken. Morley was placed in a difficult situation, for he did not wish to defend what he described in the debate as 'a horrible drug ... a pestilential evil', but it was an evil that produced 7 per cent of the total income of the government of India, some �G2,250,000 per annum. If the Chancellor of the Exchequer were to be asked to replace that revenue he would doubtless be willing to discuss it, but John Morley 'did not think the discussion would take long'. If, however, 'China wanted seriously and in good faith to restrict the consumption of the drug in China, the British Government would not close the door ... even though it might cost us some sacrifice'. Since this guarded pledge bound nobody to any specific action, it was little more than a formality for the House to pass the motion unanimously.
Somewhat to the surprise of many, the Chinese seemed anxious to make real progress. The Dowager Empress, still at the helm after half a century, issued an edict closing the smoking dens and extinguishing opium production over a period of ten years. In reciprocation the British and Indian governments agreed to restrict the export of opium to China pari passu over the same period.
Some consternation was felt at the news in Hong Kong, since the income derived from the opium monopoly was a good deal more sig-nificant to the colony than to India. Bowring, as part of his pragmatic legislation, had created an opium monopoly which gave the right to prepare opium in the colony, whether for sale or re-export, up to a specified quantity. This valuable privilege was sold to t.'1e highest bidder, and in the course of time had brought in a substantial sum. In the previous year, although it showed signs of declining, it had comprised, at $2,040,000, no less than 29 per cent of the colony's income. May, holding the fort after Nathan's recall, shot off an acerbic memorandum to the Colonial Office, but it was left to the incoming Governor to deal with this potentially damaging issue.
Sir Frederick Lugard arrived in July 1907, a reluctant appointee; he wrote to his brother Edward that he had never been faced with an
HONG KONG AND THE CHINESE REVOLUTION 349
assignment 'for which I feel less aptitude, and from which I shrinkmore'. Lugard was a romantic figure; campaigns in Afghanistan, the Sudan and Burma, interrupted by big-game hunting (he bought his favourite rifle with his reward for shooting a man-eating tiger), explo-rations and fights against slavers in Africa had led him to work for Sir George Goldie, the founder of the United Africa Company, in opening up Nigeria.g1 For six years from 1900 he had fought and negotiated with the emirs of Northern Nigeria to pacify and unite that vast terri-tory. During much of this time he was undergoing an unhappy love affair with a London society lady, and was in a state of emotional tension.
Flora Shaw, colonial editor of The Times, had been in love with George Goldie, but when he was free to marry he jilted her, and Flora married Lugard. They were both in their forties, and made a powerful couple. It might be that Lugard's appointment to Hong Kong owed much to his wife (Susanna Hoe quotes a note from the Perham Papers in Rhodes House that Lugard's biographer believed 'It seems that a good woman was wanted in H'Kong and that the appt was as much ofher as of him
'2), but he came to Hong Kong with the most impressive record of any Governor, as the most distinguished figure in the Colonial Service of the day. As well as bringing vast tracts of Africa under British rule, Lugard had very nearly succeeded in the perhaps more difficult task of persuading the Colonial Office to change its whole system of working. His proposal was that Governors should spend only half the year in post, the other half being passed in Whitehall occupying themselves with the other aspects of their responsibilities and relations with other departments. Churchill had frowned on that, in early Churchillian style: 'We will not simplify the labours of the Colonial Office by converting it into a Pantheon for proconsuls on leave.'3
Sir Frederick himself was furiously energetic and decisive, but not autocratic and indeed personally rather retiring -'really too retiring', one Hong Kong lady observed. He enjoyed pottering in Government House gardens, and was once taken for the gardener by a young man anxious to sign the visitors' book. Neither Lugard nor his wife had any taste for gossip or frivolous parties, or for protocol and precedence. Flora's attempts to raise their intellectual level by organizing reading parties.was not appreciated by the colony's ladies. But the quality of the Lugards' opposition can be gauged by a letter from Murray Stewart, a bullion dealer, former correspondent to The Times and member of the
35�X A HISTORY OF HONG KONG
Legislative Council: 'I could not honestly say nice things about the joint occupants of the throne ... they don't attract me, that is all.' He went on to write: 'some of our "Indian" fellow-subjects -Bagdadis, Parsees, Bengali Baboos et hoe genes -would have been naturally wounded in their precious feelings by being differentiated from Eng-lishmen. Do not some of them belong to the Carlton and others boast friendship with the King?'4 Lugard would have regarded such racial gibes ac; 'pernicious', one of his favourite adjectives.
Any chance of a well-thought-out solution to the opium problem disappeared in the following May when one Mr William Johnston, the backbench Liberal Member for Nuneaton, succeeded in the draw for a Private Member's Bill and chose to resuscitate the opium debate. He claimed that although the Indian and Chinese governments had moved forward, the Colonial Office had done 'next to nothing', and the Hong Kong authorities nothing at all. The motion he put forward was specific: 'to take steps to bring to a speedy close the system of licensing opium dens now prevailing in some of our Crown Colonies, more particularly Hong-Kong, the Straits Settlements, and Ceylon'. Theodore Taylor took up where he had left off two years previously, having visited China in the interim, and was equally hard on Hong Kong, 'our own corner of China', where we were 'raising millions of dollars from this opium traffic', and where 'nothing had been attempted, nothing done'.
The unenviable task of replying for the government was given to Colonel Jack Seely, the newly-appointed Under-Secretary for the Colonies. Seely was a man more noted for courage and dash than prudence, and his answer was the first speech that he was called upon to make in his new role. It proved, as Hilaire Belloc put it, that 'Decisive action in the hour of need, Denotes the hero, but does not succeed.' Without any consultation, he announced that he had sent the previous day a telegram to Lugard: 'His Majesty's Government have decided that steps must be taken to close opium-dens in Hong Kong.' Although some cautions were issued during the debate on the effect that any acceleration in the agreed programme of eliminating opium production would have in India, no one was able to point out the much more serious consequences for Hong Kong, and the motion was accordingly once more passed unanimously.
In Hong Kong the news was received with indignation and incred-ulity, much exacerbated when it was learned that Seely, having been criticized in Parliament on 28 July 1908 for his lack of consultation,
IIONG KONG AND TIIF. CIIINF.SF. REVOLUTION 351
had replied that, 'Although they did their best to ascertain the views of the people, it was quite impossible to get anything like a reasoned opinion from the inhabitants of Hong Kong.' To those inhabitants that sounded like a lie, and an offensive one at that. A vote of censure on Seely was moved in the Legislative Council, supported by all the unofficial members, but automatically defeated by the official majority. Lugard was obliged to defend as best he could his masters in London, but did so without enthusiasm. His own researches failed to convince him of the deleterious effects of the drug; visiting a large number of 'divans', a term he preferred to the emotive 'dens', he found them 'very different from what I imagine Colonel Seely's conception of a "Den" is ... All were animated and intelligent, and there were none besotted or stupid ... the net impression conveyed to one's min4 was that the so-called "vice" was really a most extraordinarily temperate and satisfactory substitute for alcohol etc .... You could not find such
5
scenes in English public houses. 'g
The episode was typical of the misunderstandings between a London government whose policy, for better or worse, was subjected to political pressures, and a Hong Kong impotent to defend what it conceived,rightly or wrongly, to be its own domestic interests. Members of Parlia-ment, backbenchers in particular, have as their most important audi-ence not the House of Commons, but their own constituents, and Mr Bennett, Liberal Member for Woodstock, probably thought it well worth taking a rap over the knuckles from Sir Edward Grey to be able to attack 'That imperialistic fetish called the "man on the spot" whose superior intelligence and experience was held to be paramount in deciding great questions of policy and morality' (6 May 1908). Bennett met Lugard's arguments with a violent attack (27 July 1909) on 'Imperial officials who thwart the action of their own government ...an intolerable state of things, and I think that some very sharp repri-mand should be administered to officials of this type.'
Lugard was hardly the man to whom sharp reprimands could be addressed with impunity, and the matter was sorted out by a grant being made by the Colonial Office to help Hong Koug overcome its potential loss of income. This proved to be only an interim solution, since the whole question was raised again after Lugard's departure. His denunciation of 'the Faddists' was made privately in a letter to his wife of 26 July 1909: 'These pernicious parliamentarians who ... have swollen heads because they arc M.P.'s for some villa settlement ...do a great deal of harm and make the Colonies hate the Mother
A HISTORY OF HONG KONG
country. Nor is it entirely useful for the Chinese to read these censures on their Governor.'6
An act of high patriotism to fornicate
Lugard was an ideal man to have at the head of affairs during the difficult times of the Chinese Revolution. He was able to rely upon Francis May's assistance -he described his second in command as 'a living dictionary of knowledge' -and shared May's conservative dis-trust of revolutionaries. Given this official disapproval at the top it is remarkable that throughout Lugard's period of office the revolutionary movement should have been allowed so free a hand in Hong Kong, where it had by far its strongest base.
The T'ung-meng Hui -the Revolutionary Alliance -which in the course of time developed into the Kuomintang, was founded in Tokyo in August 1905 by the exiled Sun Yat-sen, and rapidly established its branch in Hong Kong, which was to be for the next six years the centre of revolutionary activity in China.7 Bomb factories were established, arms collected, recruits assembled and risings and assassinations planned. No fewer than six attempted coups were launched in Canton and Kwangsi, all planned from Hong Kong, and all failures. Ho Ch'i and his fellow member of the Legislative Council, Wei Yuk (an alumnus of the Clackmannan Academy in Perthshire and later also knighted), although retaining their sympathy for the aims of the revolts, steered clear of these incompetent conspirators. Ho acted in a pro-fessional capacity as solicitor for one Yii Chi-ch'eng, a known revolu-tionary, when the Canton authorities attempted to extradite him on a trumped-up charged of robbery. The court was convinced by Yii's counsel, Sir Henry Berkeley, KC., that his client was in truth wanted for a political offence, for which he enjoyed the protection of the Hong Kong laws and could not therefore be extradited to China.
The last effort of the Hong Kong revolutionary cells took place in April r9r r and ended in another complete fiasco, although one attended with considerable bloodshed, in the city of Canton, after which the movement in Hong Kong lost much of its enthusiasm. When the successful rising that eventually brought down the Ch'ing came later that year, it was in the Hupei city of Wuchang, and had little to do with the inept efforts of the T'ung-meng Hui. Huang Hsing, the revolutionary leader in Hunan-Hopei, had distanced himself from
IIONG KONG AND Tllf. CIIINF.Sf. Rf.VOLUTION 353
Sun's polky and follo.ed his own strategy. It was not a civilian plot hut an army mutiny that sparked the outbreak, which was quickly followed by similar outbreaks in the other provinces which declared their independence from the central government. The Ch'ing adminis-tration in Peking by then depended entirely on the support of that skilled trimmer Yiian Shi kai, and when he decided to support the revolution the outcome was inevitable. On 11 February 1912 the five-year-old Puyi, the Emperor Hsuan-t'ung, formally abdicated. By that time all the provinces except one were controlled either by Yiian or by local notables: only in Kwantung had the T'ung-meng Hui-Kuo-mintang proved successful. The Ch'ing Viceroy at Canton, the last to hold that post, was Chang Ming-ch'i, a young man of considerable ability, who managed to avert a military revolution in the city, and the Kuomintang was able to take over peaceably in November 1.1t1, Hu Han-min, a moderate, becoming head of the government.
The attempts to overturn the Manchu rule, which had cost so many millions of lives in the previous century, had finally been successful. The new order, however, was no very clear improvement. Sun Yat-sen resigned his claims to leadership in favour of Yiian, who was accepted as the only potential head of government. An election in December 1912, held with a limited franchise, but still the only legitimate election ever to be attempted in China, resulted in the Kuomintang being returned as the largest single party. This was too much like democracy for Yiian, who then had the Kuomintang declared a 'seditious organiz-ation' and banned. Thereafter Yiian imposed an increasingly personal and neo-imperial rule which became so unpopular that many provinces renounced allegiance to the central government.
The news of events in November 191 1 in Canton, which was taken, a little prematurely, to signify the end of the Empire, was received in Hong Kong, Lugard wrote, with 'the most amazing outburst which has ever been seen and heard in the history of the Colony ... The entire Chinese populace appeared to become temporarily demented with joy. The din of crackers ... was deafening and accompanied by perpetual cheering and flag-waving -a method of madness most unusual to the Chinese. '8 The Governor also wrote to his brother that 'Even the Prostitutes have announced in posters and in the press that they are paying half their earnings to "the Cause", and inviting extra custom from patriotic motives. Where but in China would you find it an act of high patriotism to fornicate!'9 Wisely, Lugard chose to tum a blind eye to these manifestations, and on 13 November sought the
A HISTORY OF HONG KONG
advice of Ho Ch'i and Wei Yuk. A compromise was reached, and it was agreed that another demonstration could be held, not to sanction a revolution which was still its early stage and the success of which was by no means guaranteed, but to 'signify joy at the absence of bloodshed in Canton'. Ho and Wei, tongues firmly in cheeks, assured the Governor that the demonstration was without political significance, which Lugard found it prudent to believe.
A few days later, on 19 November, Lugard had a meeting with the leading members of the Chinese community at which he explained that while they were at liberty to entertain their own views on Chinese politics, and that he 'would sympathize with their legitimate aspir-ations', there were certain rules of conduct that must be observed within the colony. Public enthusiasm had spilled over into a certain amount of the old anti-foreign conduct, looting and obstructing thea. police, mostly originating among Cantonese 'min-Chuen' -bluntly, bandits -who had arrived in considerable numbers. This was exactly the sort of situation which Lugard had met often before in Nigeria, and he took some pleasure in dealing with it, sending army patrols through the worst affected areas and proclaiming an emergency Peace Preservation ordinance enabling magistrates to impose summary flog-gings, 'so that a very considerable proportion of the disaffected riff-raff [were] engaged in scratching their stems in public, and prefer standing to sitting'. In all some fifty 'riff-raff' were flogged before the emergency legislation was lifted in the following February. Although considerable alarm was felt at what seemed to be a return to the bad old days of street violence and anempted poisonings, this was trivial compared to what was taking place just over the border. Dr Chan Lau concludes that 'the governor ensured that Hong Kong behaved appropriately in terms of its external relations during the revolution. By adopting stem and severe policies in dealing with the so-called lawless elements, he succeeded in restoring law and order within the colony.'10
Lugard, like all Governors after him, was constrained in his action by more than the Colonial Office restrictions. The Chinese Empire was obviously crumbling, and British policies remained to prop it up for as long as reasonably possible -and even for longer, as the deter-mined British effort to back Yiian Shi kai's anempt to restore a mon-archy in 1915 proved. Hong Kong's external interests, which were much more closely concerned with what was happening in Canton than with who held the reins of power in Peking, had to take second place. It was a frustrating state of affairs for Lugard, the last of the
HONG KONG AND THE CIIINESF. RF.VOI.UTION 355
empire-builders, habituated to being able to call up a punitive ex-pedition to reinforce diplomatic efforts, but he showed more awareness of the delicacy of his situation than did his immediate successors, and exerted himself to establish good relations with the authorities at Canton. He was so successful in this as to annoy the Colonial and Foreign Offices, who felt that he was poaching on preserves that should have been the responsibility of the British Consul-General at Canton.
But the support of the Canton Viceroy was critical to the success �P of what proved to be Lord Lugard's most important contribution to Hong Kong, the central part he played in founding the University.11 There had been talk of such a project since the 1880s, when the College of Medicine was founded, and W.H. Donald, the editor of the China Mail, 'a congenial and unendingly cheerful man', had been enthusiastically backing the idea for some time before Lugard threw out the suggestion that a new university could be combined with the existing College of Medicine and with the Technical Institute, which had just been established to provide evening classes.
Manson's college, although successful in producing a small number of competent doctors, had always been a scratch affair, relying on local medical men providing free tuition, and having only $2,500 of government assistance per annum. It was essential that any new insti-tution should be properly funded, and this seemed likely to prove a difficult task. H.N. Mody, a successful Parsee, immensely sympathetic, and a great admirer of Lady Lugard ('dear old Mody -he almost worships you, the dear old man', Lugard wrote to Flora12) offered a generous opening contribution. The speed at which events sub-sequently moved is an object lesson in how a colonial administration could get things done. Mody confided to A.H. Rennie, the promoter of the Hong Kong Flour Mills, about the initial approach ('I cannot see the use of meeting HE on this subject, as I leave everything to you ... I have every confidence in you, my good friend, and you may have a lakh and a half of dollars for the building of a University if you are satisfied with the site and all other arrangements'13). On 17 February 1908 Rennie met Lugard, and produced a one-page feasibility study, which envisaged departments of Medicine, Commerce, and Engineer-ing. Lugard consulted Sir Paul Chater, and decided to proceed: another meeting was held, with May -no enthusiast -and Rennie on 13 March, and, three days later, a Committee was invited which held its first meeting on the eighteenth. Advice was sought from the Univer-sities of Tokyo, Birmingham, Manchester and Glasgow and a detailed
A HISTORY OF HONG KONG
feasibility study with capital and revenue costs prepared. (Shortly after-wards the Flour Mills failed, and Rennie committed suicide.) The sel::ction of a site presented some problems; Mody thought the pro-jected Tai-ping-shan location 'a hotbed of plague and shunned by the Chinese'; the College of Medicine believed Pokfulam too inaccessible.
By October the decisions were made, and Lugard launched the campaign with an appeal to the more conservative Chinese. A university was needed in Hong Kong, since ten years, which was the time needed to complete a secondary and university education abroad, was too long for young men to be separated from their parents, and 'I have heard, too, that Chinese parents find by experience that their sons return from a course of study in a foreign country with revolutionary ideas and become a danger to the state. It should be the special care of Hong Kong University to see that no such pernicious doctrines are encouraged or tolerated here.' Chinese reactions were cautious; were the Chinese only to have the privilege of paying for the University, or were they going to be given a share in its management; were the fees not high in relation to those ..:harged in London; and, after all, might it turn out to be no better than an Indian university? Lugard assured them that they would indeed be expected to serve on the controlling board, and that their contributions would be recorded on a suitable plaque, 'In order of the amount donated and not according to the social standing of the donors.' A list of suggested names was sent to Edward Irving, the Registrar-General, for vetting: he found the suggestions acceptable -'They are all quite private individuals and their sole recommendation is that they are wealthy. I do not think that there is any reason to object to any of them.' But it seemed that Taotai Wu of Canton had been instructed by the Viceroy to say that two of them 'had the reputation of being active participants in the revolution-ary party led by Dr Sun Yat-sen'. May, the expert, investigated the suggestion and reported on 13 March 1909: 'Chan is the editor of a Chinese newspaper ... dresses in European style ... but not a revolutionary. If he really were dangerous like Dr Sun he would have been finished long ago.'
The European community proved initially even more suspicious than the Chinese, and large donations were slow in coming in. It proved fortunate that one of the most important Hongs, Butterfield and Swire, was having trouble with the Chinese: one of their ticket collectors had been accused of kicking an elderly Chinese to death, and a retaliatory boycott was imposed. Their handsome donation of �G40,000 was
HONG KONG AND THE CHINESE REVOLUTION 357 gifenough to have the boycott called off and was matched by an equal
t from the China Association.
Some actual obstruction had to be coped with; after the Legislative Council had, with some encouragement, been persuaded to vote $50,000 to the project, the Colonial Office stepped in to veto the grant. To some extent they had been influenced by a rival concern, backed by the Revd. Lord William Cecil, later Bishop of Exeter, who was seeking backers for a specifically Christian university, and expressed his distaste for Lugard's project in pious terms: 'We Christians put before them [young men] the higher moral tone. A merely Utilitarian University leaves to a great extent the enthusiasm of youth unoccupied and therefore it becomes a hotbed of revolutionary intrigue.' All that was eventually forthcoming from the Imperial government was the miserable sum of �G300 a year to fund the King Edward VII Scholar-. ships. The Peking government did much better, with �Gz5,ooo in addition to the similar sum given by Canton. The rest of the money, a total of one and a quarter million dollars, was scraped together, and the foundation stone was laiJ on 16 March 1910. At the ceremony, Lugard made a speech remarkable for its lack of prescience: 'Let us exercise our imperial imagination ... we are forging a link in the chain which binds us in friendship and goodwill with the great Empire on whose confines this Colony is situated' -this in the year before that Empire finally collapsed.
In one of its aims, to avoid having students enthused by revolutionary doctrines, the University of Hong Kong has been quite remarkably successful -in spite of Lord William Cecil's gloomy prognostication. In the other, to attract Chinese from the mainland, it has not done so well. Japan, where the language difficulties were not great and where Chinese were not met with that bland condescension that was the best they could expect from the British, was much more popular among Chinese youth, and the American universities in China were funded with a generosity that placed them in a different rank from that of Hong Kong. Nor was the University conceived on a large enough scale; when, duly built, staffed and incorporated, it OiJened its doors in 19g12, it was to only seventy-seven undergraduates, mainly from China, to begin their studies in the Faculties of Medicine, Engineering and the Arts. Lord William Cecil, far removed from the real world, noted disapprovingly: 'Most unfortunately the English started the Hong Kong University on a secular basis ... if the Hong Kong Univer-�E sity had been established on a thoroughly Christian basis and had, as
A IIISTORY OF HONG KONG
we wished, also taught reverence for the Confucian philosophy, prob-ably there would have been no trouble in Canton.'14
The first Vice-Chancellor was an odd choice. Sir Charles Eliot had been among Benjamin Jowett of Balliol's star pupils, 'one of the chief academic wonders of Oxford', a slim willowy youth, bright-eyed, mobile lipped', who spoke twenty-seven languages fluently, but 'had great difficulty in adding up a column of�G, s and d' and 'disliked the work of engineers, which he said made cities filthy with smoke and made primitive people discontented': 15 neither of these last attributes was likely to be helpful to the head of what was essentially a technical university, with the largest faculty that of engineering, and one urgently seeking to improve its finances. Eliot had been in the Diplomatic and Foreign Service and served from 1901 to 1904 as Commissioner for British East Africa, where his white-supremacist attitudes and policies had proved too much for even that not excessively sensitive institution. Some quotations from The East African Proteaorate, which he published in justification, give a flavour of the first Vice-Chancellor's quality: 'American negroes are not fit for the suffrage'; 'the absence of any feeling for art in the African is remarkable'; 'Fusion between Euro-peans and negroes is of course out of the question'. The 'lower races of mankind', he agreed, 'must be protected from unjust aggression, and be secured sufficient lands for their wants; but with this proviso, I think, we should recognize that European interests are 'paramount.'16 On his dismissal from British East Africa Eliot had become Vice-Chancellor of the University of Sheffield, and from there he went to Hong Kong in 1912. He was not a great success, and in 1920 the University had to be rescued by a grant of$1,700,ooo from the colonial government, which paid off debts of over half a million dollars and provided an endowment fund. This windfall came from the old prop and stay of the colony's finances, opium; the new Chinese republican government was energetically suppressing the drug (recidivism was reduced to almost nil by the simple practice of shooting those who re-offended), which had the effect of making the Hong Kong govern-ment monopoly extremely profitable, and the UniversitJ one of the few to be financed by the drug trade. A typical Hong Kong row followed Eliot's resignation in 1918 to become British High Commissioner in Siberia; the Council had asked Reginald Johnson, administrator of Weihaiwei, to take the Vice-Chancellorship but the Senate of the Uni-versitya-it is said because Johnson had a 'pronounced anti-missionary bias' -refused to confirm this. It was believed that Cecil Clementi of
HONG KONG AND THE CHINESE REVOLUTION 359
the Colonial Office wa�Ps willing to take the post, but this proved not to be so.17 The outcome was that Johnson went to Peking to become tut0r to the boy Emperor, now confined in the Forbidden City and Clementi, six years later, came to Hong Kong as Governor.
In its effort to provide leadership for the new China the University was not successful. A review in 1937 correctly, if slightly cynically, assessed its intentions:
China in 191 1 was beginning to awake; her educational system was still woefully inadequate; and there was a vast field for devel-opment of railways and roads, waterworks, power plants and factories. What could be more fitting than that Great Britain, always in the forefront of engineering matters, should provide in its outpost in China the means by which the engineers required for this awakening could be trained? There would be prestige; there would be something like benevolence; and there might be the indirect advantage of making China's pioneers think in terms of British standards and material when it came to purchase of plant.
This had not happened; most of the Chinese graduates had not returned to China, and of these 'the majority are filling posts which are not at all commensurate with the cost of their education'. Medical graduates, having obtained degrees that entitled them to international recognition, had been even more reluctant to return to China, and the Faculty of Arts had 'attached itself like some half-unwanted step-brother to those two scientific Faculties which, to the founders at least, gave such promise of a sturdy manhood'. 18
When Lugard left to resume his interrupted career in Africa in March 1912, Francis May at last got the job for which -at least in his own opinion -his experience had so well qualified him. In fact it is doubtful whether May, that superb assistant, ever had possessed the qualities of a Governor. He may well have reached his level as Captain-Superintendent of Police between 1893 and 1902, when he had effected a complete reform, and a severe cull, of the force. At the time his acerbic qualities and racial intolerance had been restrained by the generous personality of his Irish chief, Henry Blake. On his own, as Officer Administering the Government, May's actions had_ often been rash and ill-considered, and he lacked the public presence which might have enabled him to face down criticism. Only to some
A HISTORY OF HONG KONG
extent were his deficiencies compensated by the qualities of his wife, the Helena May of the eponymous Institute.1'1 Almost as much a Hong Kong veteran as her husband -being the daughter�P of General Digby Barker, who had advocated the Kowloon extension -Helena was for twenty-five years at the forefront of energetic good works in the colony.
Hong Kong was May's second and last governorship, thirty-one years after he had first come to the colony. In 1910 he had been promoted away to Fiji, as Governor, and on his return in 1912 he found China a very different country from the one he had first known under Pope Hennessy, and even from that he had left only two years previously. In that brief time the Manchu Empire had disappeared and been replaced by a shaky republic under the presidency of Yiian Shi-kai.
A demonstration of the new state of affairs was offered on the first day of his tenn of office, when, as Sir Francis was actually proceeding in state from the quay to City Hall for the inauguration ceremony, he was shot at from the crowd. Violence against officials was unknown in Hong Kong, in stark contrast to Canton, where in 1910 two military governors had been assassinated in the space of a few months. Nor was the attempt on May politically inspired, but the result of a mis-understanding. In a letter to the Times correspondent in Peking, G .E. Morrison, May wrote on II August 1912 that 'The attack on me has no political significance at all. The man was I am sure crazy although the doctors who examined him at my instance pronounced him sane. Curiously enough he mixed up Fiji with South Africa (Feichau in Cantonese) and thought that I was governor of the Transvaal and had turned his compatriots out of that country.'20 The Liberal government's ban on indentured Chinese labour in the Transvaal had clearly not been popular among those it was meant to protect. But however little political violence was directed against the British authorities in Hong Kong, any unrest in Canton inevitably affected the colony, especially in the New Territories, where bands of min-Chuen roamed across the borders. In August 191 2 the little island of Ch' eung Chau, off Lantau, was raided by pirates, the police station destroyed ana the constables killed.
Altogether more typical of Hong Kong was the trouble on the tram-ways. As a matter of convenience Canton coins, of the same size and denomination as those of Hong Kong, had been widely accepted in the colony, but in the autumn of 1912 the Canton currency had depreciated to such an extent that the Hong Kong government
HONG KONG AND THE CHINESE REVOLUTION 361
attempted a currency reform which would have the effect of banning Canton coinage from circulation. The tramways and the Star Ferry Company had to insist on payment being made only in Hong Kong cmrency, a move which was widely resented. As well as being an inconvenience it was seen as an insult to the new Republic of China, and a boycott of the trams followed. May's authoritarian habits prompted him to issue an extraordinary coercive measure, the Boycott Prevention Ordinance, which gave wide powers to punish incitement to boycott and provided for penal taxation on areas which submitted to a boycott.
This 'most objectionable' law aroused considerable suspicion in Whitehall, and May was in fact instructed to repeal it, an instruction which he was successfully able to disregard.21 The Governor also angrily berated any Chinese he thought was not pulling his .weight in fighting the boycott. In fact the local press and almost all the prominent Chinese sided with the government, but this was not enough to save them from May's wrath. In particular he pursued his old adversary Ho Ch'i, whom he accused of 'not having made two speeches helpful to the government'. May seemed unable to adapt himself to the thought that Chinese should form part of the apparatus of government, and Ho Ch'i's knighthood that year may well have irked him: he reported to the Colonial Office: 'While Mr Wei Yuk [the other Chinese member of the Legislative Council] still retains as much of my confidence as experience proves that it is safe to repose in any Chinese, I regret that I cannot say the same of Sir K'ai Ho Kai.' The Secretary of State, Sir Lewis Harcourt, a Liberal of liberal tendencies, was no admirer of Sir Francis, whom he believed had 'mismanaged' the tramways affair and on whose behaviour he commented ironically, 'This man is so efficient I shall have to promote him to St Helena.' As a compromise it was agreed that no Legislative Council member should serve for more than two terms, which barred Ho Ch'i, a member since 1890, from reappointment. Only one month later May put forward Wei Yuk's name for a third term of office, making nonsense of the previous
decision. May's authoritarian attitudes and legislatiou measure an occupying army might use to enforce its will --the kind of fomented
discontent, especially among young Hong Kong Chinese, which was to cause his successors much anxiety.22
The financial difficulties of the Republican government in Canton grew steadily worse, much to the concern of the merchants there and in Hong Kong, but things began to look brighter in the spring of 1913,
A IIISTORY OF HONG KONG2
when President Yiian offered a loan from Peking to bail out the Canton government. The suggestion was warmly received by the Chinese population of Hong Kong, who had lost most of their enthusiasm for Sun Yat-sen and his followers, to the extent that when Sun passed through Hong Kong in June 1913 he was met only with neglect; and rumours even circulated that photographs of the father of the revolution had been stoned. The 'Second Revolution' of July 1913, when Yiian moved against those provinces held by the Kuomintang, was generally welcomed in Hong Kong, and especially by the colonial authorities, who saw in a provincial government supported by Peking the possibility of stability in Kwangtung. They were therefore prepared to tolerate the 'acts of gross corruption, inefficiency, excess and brutal-ity'23 that took place over the border so long as they did not affect the tranquillity and prosperity of Hong Kong.
After August 1914 events in China ceased to occupy the attention of Europe, and Hong Kong became of even more peripheral interest to the British government than preyiously. Life in Hong Kong was not much interrupted by the First World War. The Hongkong and Shang-hai Bank was the object of some nervousness -suspected, because of the number of German nationals on the board and its links with Ger-man banks, of being subject to German influence. German nationals were interned and German businesses closed down, and Hong Kong's Britons volunteered in great numbers, but the prosperity of the colony waxed, in part due to that old standby, opium.
In spite of the reservations of the British government, it seemed that the Chinese were more seriously intent on suppressing the drug than they had been given credit for. Sometimes, perhaps, the enthusiasm was more apparent than real. Dr Chan Lau notes that: 'Under the guise of banning opium in the province [of Kwangtung] a so-called opium inspection office ... was set up ... in Canton, which in reality attempted to amass supplies, centralize sales, and channel profits to Peking.'24 But in other provinces vigorous action was taken, especially after the 191a1 revolution, when in Hunan alone forty-seven people, including five women, were shot for producing or sm0king opium. So dangerous an addiction rapidly lost much of its attraction, and the demand for imported opium slumped. An interesting situation then arose. Opium stocks in Hong Kong amounted to as much as �Gi2 million, funded by British banks operating in the Far East. China's action to end consumption of the drug rendered these stocks, in the immediate future, almost unsaleable; and the Indian producers were

HONG KONG AND THE CHINESE REVOLUTION 363
still turning out more opium in the quantities permitted by the ten-year agreement. Merchants and banks frantically attempted to pressure the British government into forcing upon the Chinese authorities an observance of the ten-year agreement, which would allow opium to be imported once more.
It looked very much like a re-run of 1839-40, and similar arguments were again advanced in the House of Commons. On 7 May 1913 the Revd. Josiah Towyn Jones, a Welsh Nationalist, moved that China should be released from her treaty obligation to admit opium, and that 'she should be set free to prohibit the importation of the stocks of Opium now accumulated at the treaty ports and Hong Kong'. If su,c-cessful, the motion would have led to enormous, perhaps crippling losses. Jones apologized for any defects in his maiden speech, since English was to him a foreign language, but he did remarkably well:
In Britain we label opium a poison . . . as far as its effects are concerned, they are disease, debauchery, and death everywhere, irrespective of colour and creed, country and clime ... the fact that the British Government are enforcing this immoral trade against the will and conscience of China by unrighteous treaties, consequent upon most unjust wars, adds immeasurably to our guilt and shame.
Henry Keswick, the Jardine Taipan who had retired from Hong Kong to become Member of Parliament for Epsom, attempted to stem the flow: 'If you believe all that has been said in this House tonight, you would imagine that the smoking of opium was necessarily a most hor-rible evil. It is no more an evil than the taking of a glass of beer or a glass of wine.' When Taylor asked if he would like his own son to smoke opium, Keswick agreed that he would not: 'I have tried it myself,and it made me very ill indeed,' but went on to suggest that what port and whisky were to the British, opium was to the Chinese consti-tution, and as for his three sons, he would look forward to their partak-ing of such beverages 'in due course ... with discretion'.
It would have been impossible for a Liberal government in 1913 to adopt the stron,g line Palmerston might have taken, and equally imposs-ible to force tne banks into such large losses. The only conceivable solution was put forward with a suitable rhetorical flourish by Edwin Montagu, the Under-Secretary of State for India:
HISTORY OF HONG KONG
I am glad to be able to tell the House that ... notwithstanding the Treaty which China made with us, notwithstanding that we may get from these chests of opium [those allowed under the Treaty for the unexpired period] roughly speaking something like eleven millions sterling revenue ... we are prepared not to sell any more opium to China not only this year, not only while the stocks are being absorbed, but never again.
The motion was withdrawn, and the debate ended in mutual congratu-lations at having done the right thing at the least expense.
On the international front enough progress had been made to enable a Hague Convention to be agreed, in 1912, providing for 'agradual and effective measures' aimed at the complete suppression of the trade. Taken in conjunction with the ban on Indian sales to China, commer-cial difficulties were inevitable in renegotiating the contract between the Hong Kong government and its opium sub-contractor. In an endeavour to circumvent these the Colonial Office took the initiative in suggesting that the system be ended and that the Hong Kong govern-ment should take the opium monopoly into their own hands. Since, in an effort to substitute a tax on alcohol and tobacco for the revenues lost in closing the divan-dens, a preventative force had already been formed, this could be done without extra expense: the customs men could control all the addictive drugs at the same time. May and his councils agreed, and the House of Commons was satisfied with the explanation that the change was all part of a long-term project to ban the trade. (This turned out to be very long-term indeed, since it was another thirty-two years before opium became illegal in Hong Kong. It was finally prohibited by the post-war military government on 20 September 1945 -and was only made possible by the absence of a colonial authority which would doubtless have continued to defend this source of government income as stoutly as had its predecessors. But Theodore Taylor was alive to celebrate it, since he lived until 1950, having reached the age of 102.)
The change was immediateiy, even embarrassintly, successful.
Under the previous system, hampered by the effort of the abolitionists, opium revenue had fallen to $1,183,200 by 1912. The first year of the government monopoly saw this shoot up to h,680,617, to peak in 191 8 at nearly $8 million, at which level the income from the drug amounted to no less than 46.5 per cent of all Hong Kong government revenue. While highly satisfactory, this needed to be kept decently
HONG KONG AND THE CHINESE REVOLUTION 365
quiet lest earnest reformers should complain, and the opium monopoly proceeds were therefore camouflaged in the official returns as 'Lk:ences and Internal Revenue not otherwise specified'. It is typical, and wryly amusing, that G.R. Sayer, who was involved as Secretary to the Governor during the establishment of the monopoly, omits any mention of the subject in his history of Hong Kong, and attributes the wartime prosperity of the colony to more respectable sources, which enabled $5 million to be 'placed forthwith at the disposal of His Maj-esty's Government'.25 The total net income from opium during the five war years amounted to just over $25 million.
The First World War, in spite of its frightful casualties among fight-ing men, had less permanent effect upon Britain than is sometimes assumed. The Edwardian upper classes were able to resume their comfortable lives in a post-war world where unemployment ensured that servants -perhaps a trifle less polished than before -were still plentiful. Imperial expectations had been handsomely fulfilled: not only the white British dominions, Australia, New Zealand and Canada, flocked to the banner of the r, {other Country, but South Africa, Ireland and the USA sent volunteers in hundreds of thousands. Indian troops had served loyally (apart from one or two mutinies), and it seemed as if the pieces of the Empire could be retrieved and reassembled, to be set slowly on the road to self-government.
Given such a background, it would have been too much to expect that the rulers of Hong Kong would be sensitive to new developments, especially those that related to Chinese nationalism and to Commu-nism. The effort to establish first a viable republic, and then a mon-archical form of government in Peking, foundered with Yiian Shi kai's death in 1916, and it appeared as though China was splitting into regions where control rested with whichever local commander could muster the most effective body of troops. Sun Yat-sen attempted once again to use Canton as a base for establishing power, but a government he founded there in 1917 was short-lived. The incessant shifts of power in warlord-dominated China led to his return in February 1923, as 'Grand Marshal', head of a military government.
Popular support in the colony for any mainland leader continued to be limited and less than enthusiastic, but the government was denied a period of post-war tranquillity. May reluctantly left in September 1918, after a mild stroke, to be succeeded in September 1919 by Sir Reginald Stubbs, the interim being administered by the Colonial Secretary, Claud Severn -'a clever, humorous old stoutie', ' a kindly
,A IIISTORY OF HONG KONG
man, if somewhat pompous', who once, detailed to give away a bride, fell asleep in church while waiting. 21' Severn came from a modest colonial background, was fond of cricket, given to �Pcomposing light verse, and devoted to his newly wedded wife Nan, but his new chief was cast in a sterner mould.
The son of the famous Bishop Stubbs of Oxford, the foremost historian of his generation and a man of overpowering personality, Sir Reginald 'inherited all his father's academic ability and more than his share of his father's directness of speech'.27 With a double first in classics and greats he was able to pass easily into the Colonial Office, but chose to transfer after thirteen years in Whitehall to the Colonial Service. As a young man Stubbs had, like all the other Whitehall clerks, been highly critical of the 'men on the spot', and especially those in Hong Kong, where 'even the cadets were prepared to advance claims to act on behalf of the Almighty'.28 After only six years in the service, as Colonial Secretary in the well-ordered colony of Ceylon -an un-precedentedly short apprenticeship -he was appointed to Hong Kong at the age of forty-three. The rarefied atmosphere of Oxford and Whitehall, hardly dispersed by spending the war years in the relative tranquillity of Ceylon, had equipped Stubbs but inadequately to cope with the rapid changes taking place in China. In addition, he had a short fuse which, combined with a firm conviction of the. rectitude of his own rather conventional views, often got him into trouble, some-times seriously.
The post-war Hong Kong government found itself in a permanent dilemma. Its own dealings, as a matter of practical necessity, had to be with whatever administration was in power in Canton, three hours away along the railroad. But the British government's ambassador was, with the rest of the Diplomatic Corps, accredited to Peking, where a quite different set of politicians and generals, usually at loggerheads with those in the south, were in charge. Sir John Jordan in the capital had never thought much to Hong Kong, and the post-war settlement seemed a useful opportunity to improve Anglo-Chinese relations by returning the New Territories to China. It would be, i1e conceded, 'a considerable sacrifice . . . But without sacrifices on the part of all Powers who acquired or inherited leased territories of 1898 no solution of the [China] problem seems possible.' Lord Curzon, then Foreign Secretary, brushed this 'idealistic and impracticable' notion aside: 'We cannot begin to dig up by the roots all previous cessions, perpetual leases etc. To give back the Kowloon extension is in my view out
HONG KONq AND THE CHINESE REVOLUTION 367
of the question.' The Chinese desk of the Foreign Office remained unconvinced.
What transpired in the north often had little effect on events in Hong Kong. When it was revealed during the negotiations for the Versailles Treaty that rights in Shantung province had been granted extensively to the Japanese by the previous Peking government, with the backing of the Western allies, all China seemed to react with anger and dismay; but the May Fourth movement of 1919, when students demonstrating in Tiananmen Square fired the rest of China with excitement, caused few ripples in the colony other than an indignantboycott of Japanese goods. But it was enough to alarm the colonial administration, who warned the local papers not to use such emotive terms as 'imperialism'.29 The Chinese community in Hong Kong, whatever their political preferences, tended, for reasons of profitability, to favour whichever group seemed to off er the prospect of reasonable stability in Canton. From 1913 to 1916 the Yunnanese warlord General Lung Chi-kuang's brutal and corrupt regime had at least survived and been supported by Peking. Opposition by Kuomintang supporters in Hong Kong was suppressed by May, who stated to the Colonial Office on 4 May 1916: 'My endeavour has been and is to support the existing authority, which has shown itself alone able to maintain order in the province, by preventing the Chinese in Hong Kong from rendering assistance to the rebels either actively or by revolutionary propaganda.'
But after Yiian's death inJune 1916 General Lung withdrew from Canton, and an old colleague of Sun's, Ch'en Chiung-ming, previously a member of the Hong Kong T'ung-meng Hui, took charge. Attitudes in Hong Kong began to differ: Ch'en's single-minded commitment to the welfare of Kwangtung and his pragmatic avoidance of revolutionary rhetoric appealed to the more conservative, while the younger and more enthusiastic supported Sun Yat-sen. May, who believed Sun to be a 'closet Bolshevik', had no doubts on the matter, but by the time of Stubbs's arrival Sun's flirtation with Communism was cooling. The label of the Revolutionary Party, which had been adopted after Yiian's coup, was quietly�Pdropped and the Kuomintang resurrected.
Sun would probably always have preferred to obtain the support of Britain, a country he knew well and for whose institutions he had a high regard. When, immediately after gaining power in Canton, he paid an official visit to Hong Kong in February 1923 he was cordially received and entertained by Stubbs at Government House. In a speech to the University Sun described the island as his 'intellectual birth-
A Ill STORY OF IIONG KONG
place' where he had learned his 'revolutionary and modern ideas'. In the midst of 'deafening cheers' he lauded the British Parliamentary system, and urged his audience 'to carry the example of good govern-ment to all parts of China'.-10 Such acceptable sentiments stimulated Stubbs's anxiety to assist Sun, but this got him into difficulties at home and very nearly cost him his job.
The need to live on amicable terms with the powers in Canton had been made painfully obvious to Stubbs in the previous year. The provincial government was in constant financial difficulties, largely because it was cut off from access to the most reliable source of income, the revenue from the Maritime Customs, which was paid direct to Peking, where it stayed. If a due portion of this, after deduction of the agreed repayments on foreign obligations, could come direct to Canton, the provincial government could use this as security for a much-needed loan to be raised in Hong Kong. The Peking authorities, who wanted the money themselves, very naturally took a poor view of this, and urged their case on the foreign diplomats still stationed there. Stubbs was accordingly appro.iched to deploy his good offices on behalf of Canton. This he proved remarkably willing to do, writing to the Colonial Office to ask that Sun's claims on the customs income should not be opposed: 'I urge most strongly that His Majesty's Government should not intervene further than is absolutely necessary to secure payment of foreign loans. This would be provided for by adoption of Sun's latest proposals.'
This intervention by a mere colonial Governor in matters of state was too much for the Foreign Office, then headed by Lord Curzon, a man acutely conscious both of the proprieties and of his own impor-tance. Stubbs must be made an example of: either he must be sacked, or at the very least a 'sharp reproof' must be administered. Reproval and promised amendment duly followed, and in the next crisis Stubbs behaved in a correctly circumspect fashion. 31
The Canton Merchant Volunteer Corps affair of 1924 has never been satisfactorily explained, since the chief participant died shortly after this extraordinary adventure, in which a respectab!e bank engaged in gun-running. A.G. Stephen, Chief Manager of the Hongkong and Shanghai Bank, had been a creative banker, ready to take chances at which a more conventional lender might have hesitated. The Merchant Corps was a private army -a common enough thing in China at the time -raised by contributions from the merchants and intended to defend Cantonese business interests against revolutionary outsiders.
JGHT: Sikh policemen with a Chinese culprit in he stocks.
ELOW: An Assistant Superintendent of Police ives instructions to a Sikh Constable ( Chi11a
1867).
3noll,IIIIT
.11\H l'T A.TF. BELOW: A performance of Gilbert and
4.IJOP Qool Mow, .. ud,,...odt Yoaru1.�E�Ertoll001 �E0lu.o,t.mn.
Sullivan's H.M.S. Pi11afore, c. 1880.
The Jardine Matheson Tai pan's house, c. 1860.
The personage in the sedan chair was probablye
a draper's assistant, but
his lordly bearing might be taken as typical of those superior British attitudes that so annoyedethe Chinese.
Dent's Fountain and Beaconsfield Arcade, c. I 860. Such colonial elegance has disappeared from Hong Kong, but is still to be found
in Macao.
This view of Taipingshan, from the present site of Hospital Road, shows the Tung Wah Hospital in the left foreground, with the roof and belfry of the German mission church beyond it. Facing the church across Po Yan Street is the Chinese Theatre.
The typhoon of 1906. This French torpedo boat was one of the many vessels wrecked. Deaths, estimated at more than ten thousand, included that of the Bishop of Victoria, Dr C.J. Hoare.
The meeting between the veteran Li Hung-chang and Sir Henry Blake, 18 July 1900.
Li was then Viceroy at
Canton, and consider-
ing whether to support or oppose the Ch 'ing government. J .S. Lockhart stands between them, in full uniform. Blake was usually photographed in civilian clothes.
Chinese and British middle classes in Stella Benson's Hong Kong.
HONG KONG AND TIIF. CIIINF.SF. RF.VOI.UTION 369
Connecting Canton and Hong Kong was Ch'cn Lien-po, Compradore of the Bank in Canton, Commandant of the Corps, and an extremely rich man. Stephen gave his enthusiastic backing to Ch'en's scheme of importing a large quantity of small arms, at least ten thousand rifles and pistols together with several million rounds, contrary both to British policy and to existing agreements. The plot was exposed and the arms confiscated, but the suggestion was made by Stephen that Stubbs had given at least tacit consent. This potentially extremely damaging insinuation Stubbs denied indignantly: 'Mr Stephen had certainly never discussed it with me ... I do not understand the obser-vation in Mr Stephen's letter ... that he thought that "the Hong Kong Government would preserve a benevolent blindness" ... I find it difficult to believe that anybody who knew me as intimately as Mr Stephen did could have formed this opinion. '32
Within two months the merchant force and the Kuomintang had come into collision, which rapidly resulted in the complete victory of the latter. The news was not well received in Hong Kong: 'Sun Must Go' was the headline in the Hong Kong Telegraph, and the Chinese press were equally scathing. By this time it had become clear that Sun had decided, for want of any alternative, to rely on Russian support. Borodin, the Russian 'special adviser', had arrived in Canton in October 1923 and engineered a rapprochement between the new Chinese Communist Party and the Kuomintang, while Blucher, the veteran Civil War cavalry leader, instructed the cadets at the new military academy at Whampoa. Both were quickly effective and by March 1925, when Sun died at the age of fifty-nine, the left wing of the Kuomintang and the Communists were jointly in control of Canton, and bent on causing trouble in the imperialist outpost to the south.
Organized strikes and boycotts had been used before by Hong Kong's Chinese population in order to protest against what they believed to be injustices, but Stubbs was faced with these techniques brought to perfection. The first occurred in April 1920, shortly after his arrival, when engineers, represented by the Hong Kong Engineering Institute, demanded a 40 per cent pay rise in compensation for the increased cost of living. This trade union had been formed ten years previously, and was well prepared to take action when post-war pricec. rises, especially of the staple food, rice, made it nearly impossible to earn a living wage. Their polite request was turned down by the employers, whereon the mechanics, some nine thousand of them,
37�X A HISTORY OF HONG KONG
simply took themselves off to Canton. By this time Hong Kong had become, at least in part, a modem industrial society,_with telecommuni-cations, tramways, electricity and gas industries serving the growing industrial base, and the sudden withdrawal of all skilled engineering labour quickly brought life to a standstill. It took only a fortnight for the employers to agree a 32.5 per cent increase. Unlike previous strikes, no chance was given to such traditional institutions as the Tung Wah Committee to intervene; this was a straightforward example of well-organized workers confronting their employers.
More serious trouble broke out the following year when the Chinese Seamen's Union demanded similar increases.33 Seafarers were notori-ously the least well-organized and most put-upon of workers, and the Chinese seamen had more than most to complain about. They were paid only a fraction of European wages for the same work, and had to pay a high proportion of these to the shipmasters who found berths for them and provided board and lodging between voyage'>. Fortunately for them, the very system that gathered seamen together in squalid lodgings made it easier for them to organize. Representatives from each lodging house elected an effective Committee for Raising Wages, with both English and Chinese secretaries, and requested an increased scale of pay. With a compound of folly and incivility the employers did not even acknowledge the request, and on 13gJanuary 1922 the seamen followed the example set by the mechanics, and departed for Canton. They were joined by increasing numbers of other workers, including domestic servants, engineers and coolies, some 120,000 workers in all, the majority of the colony's labour force. The coolies' employers wisely offered an immediate increase, but the men, in a demonstration of solidarity, insisted on staying on strike until the seamen's demands were met. Faced with resistance on this scale the employers, govern-ment and traditional Chinese leaders went into a nervous and ineffec-tual huddle. Those who had previously defended Chinese interests on the Tung Wah Committee were now, in defence of their own pockets, wholly on the side of the employers and government. They denounced the strikers as selfish simpletons: Sir Shouson Chou, who in 1926 became the first Chinese member of the Executive Council, insisted the government must not in any circumstances 'retreat one inch', and wanted all labour unions officially suppressed. Encouraged by 'respon-sible Chinese opinion', the government issued an Emergency Regu-lations Bill giving themselves extraordinary powers, proscribed the Seamen's Union and raided its headquarters. The worst moment came
IIONG KONG AND THF. CHINESE RF.VOLUTION 371
when, Chinese having been forbidden to leave the colony, Indian troops supporting the police fired on a large crowd attempting to cross the border and killed five of their number.
Such repressive measures did not go uncriticized in London; Colonel Josiah Wedgwood, a Labour Member, complained on 6 March1922 that by preventing labourers from leaving the Hong Kong govern-ment was in effect forcing them 'to take work with the alternative of starvation'. As well as being discreditable, the Hong Kong govern-ment's attempts at repression were useless. In an ignominious retreat government and employers, complaining bitterly of Communist sup-port for the strikers, were forced to concede a famous victory for the seamen. Stubbs was thrown into despondency, and prophesied to the Colonial Office on 16 September 1922 that 'we should hold Hong Kong for twenty years at the most'.34 This might be regarded as an unusually accurate estimate, for just over nineteen years later, in December 1941, Japanese troops occupied the colony. In the same letter Stubbs forecast, equally accurately, 'a boycott, more or less open': this duly occurred three years later, and developed into a test of wills between the new left-wing administration in Canton and the Hong Kong government.
It was sparked off in 1925 by the 30 May incident, when eleven demonstrators were killed in the Shanghai International Settlement by Chinese and Indian police under British command. There was tremendous indignation all over China, and general strikes were called in Shanghai and Hong Kong. A good deal of stirring-up on the part of the Canton Communist labour leaders active in the colony was needed before the strike call was heeded, but when three weeks later another crowd was fired upon in Canton by British-led troops, killing fifty-two, there was no need for agitation. Protracted investigation sub-sequently failed to establish which side began the clash, but this was hardly relevant in view of the relative casualty figres (only one
gueforeigne
foreign er was killed) and Chinese bitterness at having such an armed
enclave in the heart of a Chinese city. Cantonese fury was almost ungovernable, many clamouring for war. For the first time a violent and specifically anti-British feeling swept Hong Kong, and the strike rapidly became general: within just over a month a quarter of a million strikers and their families had left for Canton, where they were fed and housed by a highly-organized and well-funded strike�P committee. In addition to the central committee there were bureaux for reception, transport, recreation, correspondence, propaganda and
37 2 A IIJSTORY OF HONG KONGa
finance, a strikers' court, and a staff of two thousand uniformed pickets, amounting to something very like an alternative government. For per-haps the first time it seemed that a Chinese city administration had developed its own effective and responsible institutions of government.
But the authorities in Hong Kong were capable of responding. A run on the Chinese banks was halted by a government guaranteed loan; volunteers staffed hospitals and essential services; temporary departments were set up to control food supplies, labour and transport; the directors of the Tung Wah gave their backing to the government, taking for the first time an active part in politics, and the usual emer-gency regulations were proclaimed. Intimidation, of which there were many examples, was met by counter-intimidation, and strikers' propa-ganda by anti-Communist attacks. By the end of July the back of the strike was broken, and the workers were flowing back to the colony ..tBut the Canton committee had a more powerful weapon to employ: the complete boycott of all British goods and a ban on all ships using Hong Kong. This continued until October the following year, after Stubbs had left, and was savagely damaging to Hong Kong.
Stubbs had asked to be allowed to stay on in an effort to see out the crisis, but it became apparent that, unlike the strike, the problem of the boycott was incapable of being solved from Hong Kong. The Canton strike committee's actions were clear breaches of treaty agree-ments, but there was nothing the Peking government could do about it. The only alternative open to Britain was a reversion to gunboat diplomacy, compelling those in power at Canton to adhere to treaty terms by the use of armed force. This the Foreign Office, in spite of much urging from Stubbs to the Colonial Office, whose responsibility it was, did not feel justified in attempting. The Governor grew increas-ingly agitated and determined to bring down the Bolshevik regime in Canton. A glimmer oflight seemed to appear in August 1925; Severn wrote to his wife, Nan, 'We are hoping that some action will be taken regarding Canton and the flagrant breach of the treaties. Yesterday the leading labour leader and communist was assassinated and this may have some effect.'35 The victim was Liao Chung-k'ai, who had been a prominent Kuomintang man since before the revolution, but his removal did nothing to discourage the vigorous prosecution of the boycott.
Stubbs turned again to the possibility of funding the 'Anti-Red' opposition, and pressed upon the Colonial Office a proposal from the unofficial members of the Legislative Council that a million dollars
HONG KONG AND Tllf. CIIINESf. REVOLUTION 373
should either be given from public funds or be collected from private sources. When the Foreign Office once more turned down the sugges-tion the increasingly desperate Stubbs suggested bribing the Peking authorities to intervene 'to compel Canton to put an end to anti-British actions and should be offered assistance by His Majesty's Government for this purpose both in money and material' (12 November 1925). The sum of $3 million was suggested as a suitable gratuity, but when this plan too was rejected in Whitehall Stubbs had recourse to a sadly minor piece of chicanery which implicated the Tung Wah Hospital in secretly (but it was very much an open secret) advancing $50,000 to finance a coup. When this fizzled out miserably the hospital was left with a deficit in its accounts, which eventually had to be paid by an expostulating Colonial Office protesting about a 'scandalous and poss-ibly criminal misappropriation of trust funds', while the left-wing Chinese accused the hospital committee of being 'English dogs', caring only to keep their property and disregarding 'the loss of national prestige'.
By the time this came into the open Stubbs had departed (in October 1925), leaving the boycott in full swing.
13
A COLONIAL BACKWATER
Faces shut like doors
Governor Stubbs's agitated quest for an end to the boycott either by bribery or by force was followed by the quieter policy of his successor, Sir Cecil Clementi. An oddity in the Colonial Service, Clementi, after a brilliant Oxford career, had passed out high enough in the Civil Service examinations to have been able to take his pick of departments. He might have chosen the Indian Civil Service, the Foreign Office or the Treasury, but elected instead the Eastern Colonial Service, thought of as something of a haven for intellectual also-rans. A man of wide interests -his edition of the Peroigilium Veneris, a fourth-century erotic Latin poem, is one of the few scholarly works ever attempted by a colonial Governor -and considerable personal charm, Clementi was posted to Hong Kong in 1900 and worked on land registration in the New Territories. His chiefs spoke of his abilities with enthusiasm; Blake thought him 'one of the ablest men in the Eastern Service -a scholar and a thinker, and will go far one day',1 and Lugard found him not only brilliant but sympathetic and agreeable. Before coming to Hong Kong as its Governor Clementi's name had been seriously canvassed as Vice-Chancellor of the University. He travelled exten-sively in China, learning many of the languages, and in 1907 embarked on a three-thousand-mile walk from Central Asia to Kowloon. There-after, for reasons best known to the Colonial Office, Clementi spent twelve years in British Guiana and Ceylon, where an intimate know-ledge of China was not particularly relevant.
Poor Claud Severn, the Colonial Secretary, had hoped for the
A COLONIAi. BACKWATER
Governor's job: 'The appointment of Clementi as Governor has been rather startling,' he wrote to his wife Nan on 22 August 1925. 'I thinkhe should do well and that the appointment is a good one, but hardly while I am here, and that's felt I gather pretty generally.'2 On his arrival in Hong Kong, in November 1925, Clementi immediately straightened out the tangled communications left by Stubbs and estab-lished relations not only ,vith 'the Canton government but also with the British Foreign Office and its representatives in Peking and Canton. A sigh of relief was breathed by James Jamieson, the Consul-General at Canton, who had found both Stubbs and Severn incurably ignorant of the Chinese: 'Even more than in mainland China foreigners in Hong Kong ... had failed to grasp the nature and the extent of changes'. What Jamieson correctly identified as 'the growth of an exceedingly sensitive spirit of nationalism' was received in Hong Kong with 'apathy and abysmal ignorance'.3
The new Governor also attempted to enlist public opinion on his side. In this he was helped by Robert Kotewall, later a member of the Executive Council, and Shouson Chou, who, with the help of a government subsidy, began an anti-Communist newspaper which was widely circulated both in the colony and among the Chinese diaspora. Clementi later attempted to consolidate this success but complained to London that he had been banned from attempting any 'defensive counter propaganda . . . I hope the experiences of the last general strike have created a body of opinion in local labour circles sufficiently convinced that the whips of capitalist exploitation are lenient beside the scorpions of union tyranny.'4 Some counterblast to Communist propaganda was essential; the government's alleged practice of burying very small children under bridges to ensure their stability might only be believed by the more credulous, but the claim that 'In 1919 more than 10,000 of the On Chat Lai[?] tribe had a meeting in a public garden, and the British soldiers swept them with machine gun fire, leaving none of them un-killed,' was not without plausibility at the time of the notorious Amritsar massacre in the Punjab. The Colonial Office was not unduly concerned about morale wit!1in the colony: Walter Ellis, an Assistant Secretary, minuted on 21 February 1927: 'Ithink the talk about "strain on the loyalty" of the Hong Kong Chinese can be discounted. Surely any Chinaman who has anything to lose must thank his gods that he is living in Hong Kong under British justice and not at the mercy of [?] warlords and Reds.'5
It soon became apparent that while tlie Canton government lent
A HISTORY OF HONG KONG
general support to the strikers, it was not in control of their activities. The strikers demanded a complete climb-down, reinstatement, strike pay and compensation, amounting to over ho million. This loss of face the Hong Kong government was not willing to tolerate, and after inconclusive discussions Clementi's thoughts turned to the possibility of coercion. Although this was strongly opposed by the British Consul-General in Canton, now Sir John Brenan, Clementi had the general support of the Colonial Office, which had from November the previous year been under Leo Amery, who was at that time always ready to assume an ultra-imperialist attitude. Amery wrote in his autobiography ofhis concern that 'the growth of an aggressive anti-European national-ism in China ... led to much controversy between the Foreign Office, out for appeasement, and those of us who were more concerned to defend the interests built up by British enterprise in a prosperous colony like Hong Kong . . . But,' he added regretfully, 'little could be done to protect Hong Kong from the consequences of Chinese boycott.'6
These included such intolerable inconveniences as the demise of
the chit. Paul Morand, a French diplomat, happily reported:
Hong Kong is falling asleep . . . Little by little, revolutionary China endeavours to bring the city to its knees by commercial ruin ... As a rule, everything is paid for with a signature in these countries, and even cocktails can be paid for on credit. Now, however, and this is quite unprecedented, signs put up in hotels and stores warn people that 'You will greatly help us by paying in cash'.7
But events were moving in the colony's favour. On Sun Yat-sen's death Chiang Kai-shek succeeded to the leadership of the Kuomin-tang. Chiang, who had been trained by the Japanese army, and had spent some time in Moscow examining the organization of the Red Army, had been appointed Commander of the military academy in Whampoa. From this base he had developed a poweriul army, which was thereafter used to re-establish a central authority. As a first step, Chiang was preparing a northern expedition towards Shanghai and Nanking, and needed therefore to secure his position in Canton. In March 1926 a coup was engineered by Chiang's supporters which drew the Communists' teeth, and the atmosphere lightened considerably; Brcnan spoke of 'a total volte-face', and in June Chiang issued an
A C:01.0NIAI. BACKWATER
eight-point programme, of which one requirement was the end of the boycott. From thenceforward a settlement was merely a matter of time, encouraged by a little muscle-flexing by the Royal Navy in clear-ing pickets from the docks and a stubborn refusal by Hong Kong to pay any ransom money to the strikers. In October 1926 the boycott quietly ended without any payment being made. The conclusion was aptly put by Chan Lau: 'It was evident that the strike-boycott came to an end because the Canton government saw to it that it did ... The lesson was difficult to forget. For the rest of Clementi's term of office in Hong Kong, he actt:d with the conviction that, for the sake of the colony's well being, the goodwill of Canton had to be cultivated and maintained at all cost.'8
The cumulative effect of the strike-boycott was severely damaging to Hong Kong. Chan Lau believes an estimated cost of �G5 million a week 'quite conservative', and gives a figure of a total decrease in property value of �G500 million. The Times estimate on 6 April 1927 was much lower, at �G100 million, and it has to be appreciated that both these figres included notional losses due to the decline of prop-
gu
erty values. In the nature of things these would, and did, recover, any losses being realized only if property were sold under distress con-ditions. Current losses should have been reflected in the accounts of the banks, but the largest of these, the Hongkong and Shanghai Bank, showed record dollar, and only slightly reduced sterling, earnings in the critical year of 1926. Even with these limitations, however, there can be no doubt that the harm done to Hong Kong trade was consider-able and protracted.
Chiang Kai-shek's northern expedition was eventually successful. By 1928 most of China was held either by the Kuomintang or by local potentates associated with the movement. The major exceptions were in Manchuria, where a provincial general, Marshal Zhang Zuolin, had established a quasi-independent state, and a nucleus of committed Communists remained in Jiangxi, under the leadership of Mao Tse-tung. A new capital was established at Nanking, well away from the dangerously exposed Peking (now renamed Peiping). Local disputes continued: a small civil war occurred between Kwangsi and Kwangtung in 1929, and when this was settled the two provinces jointly fell out with Nanking. Even after their squabble with the central government was resolved the two Kwangs remained at least semi-autonomous, .nd enjoyed ah unprecedented prosperity. This was shared to some extent by other Chinese cities, although not by the countryfolk, and the
. �E A HISTORY OF HONG KONG
Nanking decade, from 1928 to 1937, seemed as though it might be the start of a newly permanent Chinese state under the Kuomintang. The regime was recognized by the Powers, and the embassies moved from Peking to Nanking (Nanjing). Western encroachments were recovered; Tsingtao and Weihaiwei were returned by the Japanese and the British. International sympathy for China took on some practicalforms; defaulting bonds were written down and renegotiated and new lendings arranged. These, interestingly enough, agreed with an aggressively independent nationalist state, were on almost identical terms to those negotiated up to half a century earlier and presumed to be imperialistically exploitative.
At the height of the strike Severn had written to his wife, on 21aAugust 1925: 'I feel sure that a great change is coming and that there will be a fearful retribution for the Russians in Canton when the people realize how they have been duped.'9 Retribution was a little delayed,abut came savagely in December 1927. Stalin had issued instructions to his agents in Canton to stage an uprising, instructions which were faithfully followed, with the usual amount of atrocities, mayhem and bloodshed. There was little support for the brief commune that fol-lowed, which was speedily crushed by the Kuomintang forces, to the accompaniment of even more of the usual atrocities, in the course ofawhich five of the six remaining Russians in the Consulate were killed. Thereafter Canton had some stable interludes under the control ofaone or other of the Kuomintang factions and managed to enjoy its share of increasing prosperity.10 Past asperities were forgotten, and when Clementi visited the city he was received with 'an almost effusive display of pro-British sentiments'.
Compared with such violent happenings Hong Kong remained a relative haven of tranquillity, and life resumed its normal pattern. It was not, from many points of view, an attractive one. The racial segre-gation begun with the creation of the Peak reservation was continued with an ordinance in 1902 setting aside twenty thousand acres of Kow-loon for European occupation, on specious grounds of health (the Chinese could not be trusted to keep down mosquitoes). Attitudes had undergone a change since the earliest days, comparable to that which had occurred in India. The first colonists had seen the Chinese they met as exotic, fascinating, often difficult, sometimes admirable charac-ters, but at least as individual fellow-humans. In 1842 the Chief Justice danced with the Emperor's uncle; Pottinger and Ch'i-ying were on the friendliest terms; Richard Woosnam, a surgeon who became a member
A COLONIAL BACKWATER 379
of Pottinger's team, shed a tear over the death of 'poor old Elepoo'. But these Chinese were high officers of the Empire, men of great power, which always exercises considerable attraction. Once the colony was settled, the only Chinese coming into contact with the Westerners were in very subordinate positions -servants, shopkeepers, at best a compradore or merchant. Social discrimination was added to racial attitudes. Nor were the Westerners from the top drawer; the Civil Ser-vice, with few exceptions, was shuffled together from third-raters; the great taipans, who had commanded fleets and influenced governments, had retired, leaving commercial gentlemen to run their businesses, often extremely successfully, but rarely with the same panache.
For some time there was limited flexibility; in the 1850s Mrs Daniel Caldwell, a Chinese, was acknowledged as a member of Hong Kong society, had her children christened in the cathedral, and entertained the impresario Albert Smith, who passed with her family 'one of the most agreeable evenings of his visit'. The Caldwells were pillars of the cathedral, and also employed a private chaplain in their twenty-four-strong household. Church society, which should have been more egali-tarian, ossified, at least as far as the Anglicans, firmly attached to notions of social status, were concerned. The Non-conformists were more lib-eral: in 1877 Miss Rowe, of the London Missionary Society, described a service attended by Chinese families:
they made it a social function; babies were brought, and old women to nurse them, little children and girls to play with them ... and even the family dogs to please the little folk ... a kind of subdued picnic ... the singing was dreadful ... Everyone who could read the characters felt it was his or her duty to shout them aloud, as if like the priests of Baal, they thought God was sleeping.11
As well as being an assiduous Anglican, Daniel Caldwell was also a Free-mason, and it was many years before the Hong Kong lodges of that society could bring themselves to admit Chinese. As late as 1895 it wasrecorded that 'Grand Lodge is strongly opposed to the admission of Chinese into Freemasonry, and though we have the misfortune to have one or two of such nationality attached to one of our lodges, their numbers are not likely to increase.'12
1869, the year of Affie's visit, might be taken as a watershed, when Hong Kong British society began to set in its mould, with the Governor and the permanent cadet officers at the centre, flanked by the Com-
A HISTORY OF HONG KONG
mander in Chief, the Bishop (Anglican, of course) and taipans forming the apex; a very small group, perhaps thirty in all, wit!i their wives. The respectable persons, Justices of the Peace, special jurors, proprietors of businesses, were perhaps another three hundred; the remainder were 'pong pans' -subordinates, clerks, shopkeepers. Within this society, but knowing their place, were a handful of Jews, Armenians, Portuguese and Parsees who knew which fork was which and who were admissibly rich. Outside were a number of other Portuguese and Eurasians who quietly fulfilled essential clerical and minor administrative roles. Stations in society were evident from membership of the clubs; the elite belonged to the Jockey Club and the Hong Kong Club, while the Victoria Club admitted the others; Germans had their own club, the Germania, and Portuguese the Lusitania. The Cricket Club and Amateur Dramatic Corps cast their nets wider in search of talent, as presumably did Lord Saltoun's Madrigal Club.
Only later did one or two Chinese infiltrate British society, without ever being thoroughly accepted. The first of these, Sir Ch'i Ho Ch'i, a man of both worlds, insisted that Chinese were different; some Euro-peans appeared 'to forget that there are wide cultural differences between a native of China and one who hails from Europe. They do not allow for differences of habits, usage, mode ofliving and a host of other things.'13 Spitting, Ho convinced Lugard, was doubtless objectionable, but the Chinese should not-indeed could not-be prevented from doing it. Ho believed that Chinese did not object to segregation, but among the second generation of Chinese knights Sir Man-Kam Lo, speaking on the occasion of abolition of residential segregation (which did not take place until 1946), insisted: 'There was very strong and bitter opposition to the measure on the part of the Chinese community ... solely on the grounds of racial discrimination.'14
It took as long for the Matilda Hospital to change its policy. Under the terms of the businessman Granville Sharp's will, the Matilda, named after his wife, and opened in 1906, was to be 'for the benefit, care and happiness of patients primarily who are helpless ... and emphatically ... for the poor, the helpless, the forsaken and for him who is alone and desolate'. As long, that is, as he was white. (Although, as it was made clear in 1940 when an American woman married to a Chinese was refused admission, it was nationality, rather than colour, that was the officially advanced reason. Once again 'no Chinese' was universally understood without having to be embarrassingly specified.) Sharp, a universally respected businessman, displayed crudely suprem-
A COLONIAL BAC2KWATER
acist attitudes: 'We have been too lenient in the past,' he said in 1896. 'When first I came to Hongkong every Chinese coolie doffed his cap and stood on one side to allow you to pass. When do you see a coolie do that now? We do not exercise our undoubted superiority. We must rule by power .. .'15
Sharp was complaining about the decay of the Europeans' previous casual brutality, which had been replaced by irritating assumptions of superiority which were deeply resented by the Chinese: in the 1870s a Chinese gentleman had protested that he was not given the courtesy title 'esquire', which his British colleagues were accorded; on public property there could be no official segregation, but this did not prevent squabbles about sharing access to the city museum or sitting on the same park benches. In 1908 there was even a proposal to reserve some park areas and parts of public transport for foreigners. 'Of course,' Dr Chan commented, 'no such legislation so manifestly discriminatory materialized,'16 but the attitude of mind that it represented was both unconcealed and widespread. Institutionalized discrimination did in fact exist: there was no question, for example, of Chinese being admit-ted to the higher ranks of the Eastern Colonial Service. It was not until 1942 that the Colonial Office dropped its demand that all candi-dates should be 'of pure European descent', and even as late as 1992 the most senior posts were all held by British officers.17 This was in contrast with the practice in the Indian Civil Service, a more highly-regarded service, which had encouraged Indian applicants to qualify for the most senior positions since the 1920s. In Ceylon one-third of all appointments in the highest grades were reserved for Singhalese. Even junior posts, which in other parts of the empire would have been filled by locals, were reserved in Hong Kong for expatriate, white, staff. It was alleged that Cantonese police could not be relied upon to control their fellow countrymen in times of stress, and were unable or unwilling to counter intimidation by strikers. Europeans, Indians, and Chinese from Weihaiwei were recruited instead. Not until just before the Second World War were Chinese admitted to the police force at the rank of sub-inspector, and even then they were placed under the orders of British ranks junior to them. As late as 1946 this inexcusable policy was defended by the reactionary Chief of Police Colonel San-som, who wanted also to ban inter-racial marriages. No excuse was offered wqen i. other parts of the service Europeans, often not expatri-ate but locally recruited, were paid more than Chinese for the same
A HISTORY OF HONG KONG
work purely on grounds of race. At all ranks, from probationary clerks to medical officers, Chinese were treated differentially.
This practice did not create as much obvious discontent as might have been thought; even Sir Man-Kam Lo, in 1936, maintained that Chinese did not expect to receive the same salaries as Europeans.18 Allowance has to be made for the racial attitudes of the Chinese them-selves, which went far to mitigate the worst effects of discrimination. Few Chinese particularly wanted to spend their time with Europeans; unlike Indians they did not play cricket, or polo, or ride to hounds, or earnestly emulate British middle-class mores. To be Han has always been, to the Han, to be almost different in kind to the rest of humanity; and, observing the progress of Chinese communities, the rest of the humanity must often wonder whether there isn't something in that belief. If the unpleasantly sweaty, cheese-eating, Westerners wanted to keep their objectionable habits to themselves, the Chinese were not complaining. In so far as the British mandarins were worthy, the respect accorded to authority in traditional Chinese society would be forthcoming; the more so since these great men were, to all practical purposes, incorruptible. There was no undue resentment at the fact that opportunities for modest corruption were taken by the lower ranks, irrespective of race. It had always been accepted that official underlings, the yamen runners, would benefit from their position, and no hard feelings were necessarily aroused wheri their modern equivalents acted similarly, nor much annoyance provoked by the common practice of offering appropriate gifts to smooth any small difficulties that might arise between the citizen and the police, or other officials.
Other sections of the population might well have felt injured by the attitudes of some of the British. The Portuguese were habitually slighted, and confined to the lower ranks of the service. Although there had been proposals to have Portuguese representation on the Legislative Council before, it was not until 1927 that a Portuguese, Jose Pedro Braga, was appointed. At least the insults to them were not quite as blatant as those made by Sir Henry Norman, M.P., to the Jews -'that peculiar contingent known as the black brigade, recognizable bycthe physiognomy of Palestine and the accent of Spitalfields' -whocwere to be found in the lobby of the Hong Kong Club. 19 Braga himselfchad some success in combating institutionalized racism, when in 1921che persuaded the newly-formed League of Fellowship to seek 'thecelimination of racial disabilities ... irrespective of race, class or creed'.c
A COLONIAL BACKWATER
Henry Pollock, the Chairman, attempted to argue that no racial dis-crimination existed, but Braga, supported by Man-Kam Lo, carried the day. But nothing much subsequently happened. 20
The European, and more specifically the British community, was divided within itself by stultifying snobbishness and a nervous adhesion to proprieties. A remorselessly accurate picture of the colony in the early thirties is given in the diaries of the novelist Stella Benson. As a successful writer and wife to James O'Gorman Anderson, Com-missioner of the Chinese Maritime Customs, Stella had a recognized position in Hong Kong society, which her decided and unconventional views sometimes jeopardized. She did not think much to Hong Kong -'this dreary place' -although she enjoyed the sailing and the bathing.It was the narrowness of the society she found tedious: 'There isnobody here who reads, nobody who is interested in European politics... Really nobody likes even the mildest honesty here ... Faces shutlike doors unless we talk about games or the weather.'71 Gossip wasthe prime recreation, and Claud Severn dutifully relayed the bestexamples to his wife: 'As regards Captain Bloxham's marriage. In thespring a Vaudeville Company visited here twice and one of the featureswere six young ladies who danced called "Lee White's Peaches". Yourfriend Harriman admired one and bought a ring, which she is said tohave pawned in Manila. To our amazement Captain Bloxham gotengaged to another, Audrey Jones.'22
Stella Benson found some useful employment when her assistance was sought by another writer, Bella Woolf, Lady Southorn, who was Virginia Woolfg's sister-in-law, although little clue to the relationship can be found in Bella's own undistinguished works. As wife of the Colonial Secretary Mrs {as she then was) Southorn was responsible for entertaining the second rank of British residents: 'By a clever ruse she managed to include both the Kowloon Decayed Gentlewomen and the Peak Flourishing Gentlewomen' in her tea parties by inviting the latter 'to polish off the rabble'. Stella enlivened one tea party on 18 August 1931 by 'roguishly' teaching 'Mrs Southorn and two rather nice Chinese men, Chow and T'ang, to play poker'. The Southorns were not among Stella's favourites, as her diary indicates: 'Mr Southorn is a somehow under-baked person -he is rather handsome yet flabby somehow, not enough crust on ... just a little doughy. Mrs
S.gis very sharp and plain, a very flattering manner with which makesyou feel, somehow, that she makes it her business to be very pleasantto everybody in order to Help Her Husband's Career -It is veryg
A HISTORY OF HONG KONG
curious she should be Leonard Woolf's sister, and yet have no subtlety at all.'
Stella herself had a sharp eye for social distinctions: 'Hong Kong girls seem all to belong to the type of girls one sits behind on the top of buses in London talking with sibilant imbecility,' and dedicated to 'slavish self-offering to men'. When Dame Rachel Crowdy, a most distinguished lady, who had been in charge of the Voluntary Aid Detachments of nurses in France during the war and was Chief of the League of Nations Bureau on Social Questions and the Opium Traffic arrived in Hong Kong, she met Stella before going to Government House. Only when confronted by the Governor's aide 'with a wholly frosty face' was Stella made aware of 'the enormity of what I had done in entertaining a Governor's guest before the Governor had time even to offer her a biscuit. I became at once sick with fear lest I had injured James' career.' The aide confirmed that since the Governor had kept lunch waiting for half an hour while Dame Rachel had been illicitly seeing Stella, he was indeed much annoyed, and that a profound apol-ogy would be in order. This was duly proffered, and Stella was for-given, but James was made to suffer at dinner where he was placed below the salt: 'it seems very odd that pork butchers, men who mend the electric light, insurance touts etc, should be placed above the representative of the Chinese government.'
A fretful concern with precedence had always been a characteristic of Hong Kong society. On formal occasions a list of acknowledged degrees of social status was observed; it included such arcane infor-mation as, for example, the fact that wives of Members of the Royal Victorian Order (5th class) ranked ahead of daughters of Knights Bach-elor, who in turn were senior to wives of the younger sons of peers' younger sons. While this might be helpful to the ladies concerned -who were usually very well aware of their precise grade -it was of little practical use in Hong Kong. Of the 178 ranks listed, Hong Kong society was almost exclusively composed of the 173rd, immediately after Subaltern Officers of the Army: 'Professional Gentlemen, as solicitors, attorneys, proctors, engineers, architects, medical prac-titioners, artists, literary men, merchants, master manufacturers, scien-tific professors and others.' Among this heterogeneous class it was observed that while they were 'considered to possess some station in society', there was no legal order of precedence between them.23
The ritual of the 'book' divided the classes. It was, and still in some circles is, considered polite when visiting a foreign capital, and

A COLONIAL BACKWATER
especially a colonial possession, to make one's presence known bysigning the visitors' book in the embassy, high commission or Govern-ment House. In Hong Kong this was an essential part of protocol; SirAlexander Caldecott, Governor from 193g5 to 1937, explained tonguein cheek how it worked in an imaginary colony: 'Heads of Departmentmust, their deputies should, other officers of more than ten years senior-ity might ... Members of the Legislature must, Town Councillors should, heads of mercantile houses and persons authorized to sign forthem "per pro", might ... �PAH others might not.'24 The book was thenused as the guide as to whom should be invited to what, from intimatedinners to the omnium gathernm garden party on the Queen's Birthday.
'Pomposity,' recorded Sir Alexander Grantham (Governor 1947-57), 'seemed inseparable from important persons such as the ColonialSecretary and heads of firms. The machinery of the Hong Konggovernment was ponderous in the extreme with great attention todetail.' He was 'amazed and shocked at the amount of time the Gov-ernor, the Colonial Secretary and other senior officials spent on mattersof minor importance that shm.ild have been left to junior officers'.25Judgements were made simpler by recognizing wealth as a very impor-tant criterion, while the poorer, in Hong Kong as in England, foundsome satisfaction in gentility. The jokes in Punch of the period dependon the knowledge that certain phrases were just never uttered, norsome clothes ever worn.
The parochial and restricting snobbery that made !ife in Hong Kongso difficult for the more enlightePed was aggravated by the practicesof the large firms. Employees of �Ehe Hongkong and Shanghai Bankagreed to spend the first ten years of their career in the East in a stateof respectable celibacy, except permission of the Chief Manager.This post was held in the 1930s by Vandeleur Grayburn, a man of greatenergy, but described as 'coarse, arrogant, headstrong and tactless'.Coarseness was certainly displayed in his letters on the subject of staffmarriages: 'I look with disfavour on marriages to non-British women',and 'Foreign, native, half-caste are definitely taboo.'26 (This discrimi-nation would, as it happened, have banned Lady Pope Hennessy, whowas of mixed race, and Lady Bowen, who was Italian, from Corfu.)But Grayburn was only one example of such crassness, and the Hong-kong and Shanghai Bank, in its policy of having no Chinese on theboard, was more obviously racist than some other Eastern exchangebanks. Other Hong Kong firms were happy to have their staff marryEuropeans, but would draw the line at Chinese -and in fact many
A HISTORY OF HONG KONG
Hong Kong bank officers did marry foreigners, but never a Chinese. Captain Hardy, a junior officer on the China station before the Second World War, told me that he was warned by his Captain after evincing too great an enthusiasm for dancing with a young Chinese lady, a graduate of an American university and from an extremely rich family.27
When Sir Alexander Grantham, who had been a Cadet Officer in Hong Kong between 1932 and 1935, returned after the war as Gov-ernor, he noticed a change for the better:
A marked decline in social snobbishness was one of the first things I noticed after my return. The 'taipan' and the senior government official were no longer regarded, nor did they so regard them-selves, as demi-gods ... I observed, too, a greater mixing of the races ... It is the mental arrogance of some Europeans towards Asians that has created as much, if not more resentment than the physical aggressions like the establishment of colonies and extraterritoriality. The basis of the arrogance is the assumption that the European is inherently superior to the Asian, taking such forms as the exclusion of Asians from clubs, downright rudeness or a patronizing manner.28
Any such assumptions had been cruelly shattered between 1941 and1945�P
A war with Japan! But why should there
be a war with Japan?
On 16 September 1922, while on leave in England, Governor Stubbs wrote gloomily to the Colonial Office: 'This is the beginning of the end. I told you the other day that I believed we should hold Hong Kong for another fifty years. I put it now at twenty at the most. 'g29 Evenwhile Stubbs was writing the British government was drifting into taking up a position which led, in an even shorter time than Sir Regi-nald had prophesied, to the loss of Hong Kong.
At the end of the Great War the question had arisen of the Anglo-Japanese Treaty, due for renewal in 1922. This treaty had been negoti-ated before the war, when Japanese naval strength in the Pacific was sought by Britain as a counter to the threat posed by the German navy. Japanese participation in the war had indeed been useful, if not
A COLONIAL BACKWATER
particularly active; what had been vital, the security of communications in the Pacific and Indian Oceans, might have equally been gained by Japanese neutrality. By 1922 it was clear that the only powers likely to clash with Japan were China and the USA, with both of whom Britain was on friendly terms (Russia was considered too involved with internal problems to present much of a threat). Chinese interests could be, as they usually were, relegated to an inferior position, but friendship with the USA was judged to bes. of paramount importance. Australia and New Zealand, who had benefited most from the Japanese alliance, were realistic about the unwillingness of America -at that time embarked upon a decade of inglorious isolation -to defend its former allies' interests. An effort to clarify matters was made in 1921 -22 at the Washington Conference, a long-drawn-out and complex affair, with three simultaneous conferences, each having a different grouping of members, intended to settle future policies in the Far East and the Pacific Basin and to agree on limitations of naval forces. It resulted in an agreement between the USA, Britain and Japan to limit their naval tonnages to the ratio of 5:5:3 respectively, a maximum size of capital ships restricted to thirty-five thousand tons, a moratorium on capital ship-building for ten years -and the non-fortification of Hong Kong. In a move which was to have profound consequences, the Anglo-Japanese alliance was not renewed. Carrelli Barnett regards the Washington Naval Treaty as 'one of the great catastrophes of English history',30 but it is doubtful if the Treaty itself had any dramatic effect. Given the reluctance of Britain between the wars to spend more than the inescapable minimum on armaments, it is difficult to believe that, even had no treaty limitations existed, enough would have been spent on the Royal Navy to enable it to make more than a show of fulfilling the role that it was asked to play.
The failure to renew the Anglo-Japanese Treaty was a cause of grave concern to the Joint Chiefs of Staff, who correctly identified the Far East as the most dangerous potential trouble spot. Their view was not shared by the then Chancellor of the Exchequer, Winston Chur-chill: 'A war with Ja pan! But why should there be a war with Japan? I do not believe there is the slightest chance of it in our lifetime ... suppose we had a dispute with Japan about something in China and we declared war on her, what would happen? We should have to move the best part of our Fleet to Singapore. Hong Kong would of course be taken by Japan in the early days.' Even so dedicated a supporter of the Navy as Churchill, a 'former naval person', as he called himself in
388
A HISTORY OF HONG KONG
the Second World War, was therefore ready briskly to cut Admiralty spending: 'They should be made to recast all their plans and scales and standards on the basis that no naval war against a first class Navy is likely to take place in the next twenty years.' There were also electoral considerations: 'We should come up to the Election with these enor-mous Navy Estimates and nothing else to show ... I cannot conceive of any course more certain to result in a Socialist victory'. A Labour government would, Churchill argued, cut spending even more, so the Navy would end up even worse off.31
Good strategic reasons existed for choosing Singapore rather than Hong Kong as the British Far Eastern base. A cruiser squadron operating from there could within two days be either in the Indian Ocean or off the southern coast of China. Singapore lay at the end of a peninsula which was also British territory, and was protected by a solid bloc of British, Dutch and French possessions, with only the independent kingdom of Siam identified as a likely jumping-off ground for Japanese aggression. Hong Kong, on the other hand, although well situated for action in the China Sea, was uncomfortably close to Japan, and even closer to the Japanese-held territory of Formosa. There was little disagreement with Churchill's view that Hong Kong was virtually indefensible -at least with any force likely to be allocated for that purpose -from any attack coming from the mainland. The Washington Treaty provisions stipulated that Hong Kong's fortifications should not be developed; Sir Samuel Hoare wanted to go even further and dismantle some of the existing works, which were slight enough (the island's total armament consisted of two 9.2-inch and two 6-inch guns), but, Foreign Secretary Lord Curzon opposing, the suggestion was dropped.32 ln these circumstances Hong Kong's safety lay in China's remaining either in tolerably friendly hands, or at least in those without much power for mischief. Active defence, it had always been assumed, would be dependent on the swift arrival of the Royal Navy. Two factors were to alter this: the Japanese war with China and the development of air power.
Throughout the twenties it seemed that the policy established at Washington was likely to succeed. Japan showed no signs of giving trouble, joined the League of Nations, and behaved as a model member. No hint was given ofJapanese resentment at what appeared, by the failure to renew the Anglo-Japanese Treaty, to be their deser-tion by Great Britain, their old friend and mentor, who had made Admiral Togo, vanquisher of the Russian navy, a national hero and in

A COLONIAL BACKWATER
whose shipyards the first victmious Japanese fleet had been con-structed. There was also a damagingly racist factor. In 1924 the USA passed an immigration act blatantly designed to limit the number of non-northern-European immigrants. It was particularly restrictive to the Japanese, superseding a 'gentleman's agreement' that had pre-viously been applied, and fixing an absurdly low quota of two hundred immigrants a year, at a time when there were already a hundred thou-sand Japanese settled in California alone.33
The decision to concentrate forces on Singapore, although the development of the installation there took very much longer than originally expected, limited the strategic importance of Hong Kong. The colony's commercial importance was also declining as that of Shanghai advanced. By 19 r I tonnage entering and clearing Shanghai (18,179,472) was already approaching that of Hong Kong (20,490,520), but since much of the Hong Kong figure consisted of ships in transit, liners and cargo vessels on their way to other Oriental ports, the truly international trade of Shanghai was already greater. Between 191a1 and 1915, 28.3 per cent of China's total foreign trade passed through Hong Kong; in the five years after the strike-boycott it had dropped to 1 6.4 per cent. Although all British trade suffered from the Chinese anti-British sentiments of the 1920s, Hong Kong bore the brunt. The remainder of the British Empire trade to China, most of which went through Shanghai, rose to almost exactly the same share as Hong Kong's -16.7 per cent in 1930 compared to Hong Kong's 16.8 per cent. The benefits of British decline accrued to the
apanese and Americans. By 1918 Japan had nearly 40 per cent of China's trade, after which this declined, while the American share steadily increased, to reach the same proportion as that of the other main competitors.
The International Settlement and the French Concession at Shang-hai were considerably more entertaining places than the British colony of Hong Kong, as W.H. Auden recorded:
the tired or lustful business man will find here everything to gratify his desires . . . You can attend race meetings baseball games football matches. You can see the latest American films. If you want boys or girls, you can have them, at all prices, at the bath-houses and brothels. If you want opium you can smoke it in the best company, served on a tray, like afternoon tea. Good wine is difficult in this climate, but there is whisky and gin to float a fleet
39o A HISTORY OF HONG KONG
of battleships ... Finally, if you ever repent, there are churches
and chapels of all denominations.34
All these delights were certainly, one way or another, available also at Hong Kong, but were much more hedged about with legal and social prohibitions. Half a century earlier Kipling had observed in From Sea to Sea: 'Vice must be pretty much the same all the world over, but if a man wants to get out of pleasure with it, let him go to Hong Kong.' Things had not much changed in the interim.
When coupled with the continued advance of trade at Shanghai, this resulted in Hong Kong becoming even more of a colonial backwater, a status reflected in the appointments of Clementi's successors as Gov-ernor. Colonial Governors, as the men on the spot, are traditionally given considerable latitude by the home government. When the Gov-. ernor is a man of acknowledged talentt-and fully conscious of his own merits -this can result in his assuming an unwelcome independence. Clementi sometimes had the Colonial Office worried: 'He thinks that in his capacity as Governor of Hong Kong he is responsible for the control of all the naval, military and air forces in south China as well as shaping our policy there.'35
Clementi's sudden departure in 1930 was caused by a crisis arising in the Straits Settlements which demanded a senior replacement as Governor there. Disappointed at what he took to be an unsympathetic Colonial Office, both Clementi and his wife Penelope left Hong Kong reluctantly and with personal sadness: 'It will be a great wrench to both of us to leave Hong Kong where we have been very happy . . . I would gladly have stayed here rather than anywhere else in the world.'36
Sir William Peel, hurriedly found to replace Sir Cecil, had never expected to be given so important a job, and was somewhat alarmed at the prospect. Much less gifted than Clementi, Peel was a dignified personage unlikely to cause nervousness at Whitehall. 'A handsome stolid old man,' was Stella Benson's first impression, 'almost exactly like any other amiable orthodox old man controlling any tassel of the fringe of empire,' although she later found the Gmernor 'a rather charming and sapient old man'. Sir William had worked his way for thirty-two years through the Colonial Service to this, his first appoint-ment as Governor. His prior post had been as Colonial Secretary in the Federated Malay States, so he had therefore a fair knowledge of the Chinese people, which was immediately put to the test over the by now well-aired questions of the mui-tsai and prostitution.
A COLONIAL BACKWATER
The result of the previous confrontation between the Colonial Office and the government of Hong Kong on the control of prostitution had been a stand-off (see Chapter 9). The Contagious Diseases Act, which had aroused the reformers' indignation, had been abolished, but at the same time the Hong Kong government had retained powers to close brothels. Since any brothel of which the government disapproved could therefore be shut down, this gave the authorities the right to specifyprecisely which brothels they were prepared to tolerate: in fact to introduce whatever systems of control seemed to them best. The opportunity was eagerly embraced:
Brothels were classified into those catering for Europeans (with sub classes of those with European, Japanese, or Chinese prosti-tutes), brothels for Indians, and brothels for Chinese (subdivided into first-class, second-class, and third-class houses). The Sec-retariat fixed the charges which the mistresses might levy on their girls for board and lodging. All those wishing to practise the profession had to attend before the Secretary for Chinese Affairs, bringing three photographs with them, and they were closely ques-tioned to ensure that they were entering the profession of their own free will. When the authority was satisfied on this point, and that the girl was over nineteen years of age, she was given a card showing her number, name, and address, to which one photo-graph was attached. One photograph was retained by the Sec-retariat and the third by the brothel mistress, who pasted it in a record book kept in the brothel. 37
A more complete and efficient system for institutionalizing prostitution could hardly be conceived, and it worked extremely well, to the satisfac-tion of all concerned and to the avoidance of venereal disease. But the forces of international morality demanded change, which was signalled to Hong Kong by the visit, in 1921, of a Commission from the National Council for Combating Venereal Disease consisting of Mrs Olive Neville-Rolfe and Dr Hallam, who recommended measures which, when eventually implemented, had the effect of promptly tripling the incidence of venereal disease. Governor Stubbs, who had already been castigated by the moral campaigner Mrs Clara Haslewood on the sub-ject of mui-tsai, refused to co-operate with them.
It was not difficult for the Committee to find objects for criticism, since the Hong Kong government had, since the 1890s, followed their
392 ,A HISTORY OF HONG KONG
established practice of leaving things Chinese to the Chinese, and enforcing only the minimum of public health standards. As a result child mortality and morbidity were high, and Chinese brothels more laxly supervised than those used by Europeans. A logical answer might have been to insist upon the same standards being observed in both communities, and indeed the arguments for not so doing were wearing patently weak as more Chinese flocked to Hong Kong in order to toescape the violence developing in China, but this would be tantamount encouraging vice (a word which signified only one of the seven
deadly sins to British moralists). Brothels must be abolished.
Singapore was the first to fall victim to the new wave of morality. Brothels had indeed been suppressed there in 1916, with effects so dire that a medical committee urged the full reinstatement of the Contagious Diseases Act. This was dead against the feeling of the times, and Singapore was sternly instructed by Whitehall to close its brothels. Hong Kong's Governors practised some more masterly inactivity. Stubbs had other things to contend with, and Clementi found ways of avoiding an issue which the Conservative government was not keen to press. Peel, who had been able to see things at first hand in Singapore, followed the same line, and did his best, assisted by the Colonial Office, to retain the existing system. He urged in vain the argument about retaining Chinese 'loyalty', and pointed out that 'the Chinese do not view prostitution as we do ... Prostitutes are not social outcasts to the same extent as in "Western" countries. A prosti-tute often becomes a highly respectable concubine.'38 This was hardly an argument calculated to convince such opponents as Lady Astor, to whom concubines were quite as undesirable as prostitutes. Nor did it, and Peel's hand was forced. In 1932 the European brothels were closed, the Chinese ones following three years later.
The consequences were precisely those that had been predicted by everyone with experience of the subject. Street walkers flourished, 'sly' brothels proliferated under the guise of massage parlours or dancing academies, and venereal disease among servicemen increased from 7per cent to 24 per cent. Figures for the population at large were unknown, but almost certainly higher. Yet another committee was appointed in 1938, and concluded 'The results of abolition, namely the increase in venereal disease with its appalling effect upon the clef ence forces of the colony, and the unpleasant conditions of the streets are much more of a disgrace than the tolerated houses ever were.'g39 As conditions on the mainland worsened, new recruits to the
A COLONIAL BACKWATER 393
oldest profession poured across the border. Wanchai was established as the new centre for organized prostitution; when the Japanese came in 1941 the Nam-ping and Sun Wah hotel-brothels formed what were considered suitable temporary quarters for the Hong Kong bankers.
Stella Benson was shocked by the procrastination over closing the brothels, and wrote on 1 November 1930: 'With great slickness and
.
disingenuousness it is now quhe clear that the government (the present existing members of the government, amongst them Mr Hallifax [the Secretary for Chinese Affairs] -Mr Wood -Sir Cecil Clementi) deliberately switched the limelight to the mui-tsai or domestic slaves -and abolished that system because it was a Chinese one and did notaffect the Europeans.'g
Little sisters
British external policy during the hundred years between 1850 and 1950 was overshadowed by the importance oflndia. The responsibility for this enormous and complex territory, with a diverse population comprising something like one-fifth of the human race, brought with it large-scale problems which were met with appropriately imperial solutions. Aggressive, and sometimes defensive, actions in Burma, Tibet, Afghanistan, Nepal, Egypt, Sudan and China were thrust upon usually reluctant British governments by what were perceived to be Indian necessities. In other colonial territories a full-blown imperialism never emerged, except for the brief and controversial episode in South Africa, where British attempts to force imperial rule on Boers and blacks alike ended in the fiasco of the Jameson Raid and the Boer War. By 1906 the supporters of imperialism were discredited; Lord Milner, its chief proponent in South Africa, had been sacked and censured in the House of Commons, Joseph Chamberlain had been defeated and terminally incapacitated, and colonial policy was finally set in its twentieth-century mould, defined by the Duke of Devonshire, Colonial Secretary in 1922, as 'based on the fundamental principle that the interests of the local people are paramount'. The principle of what became known as the 'Devonshire Declaration' may have been somewhat patchily applied, but it was often closely followed, and no more so than in anything that bore the taint of slavery.
It had long been felt that Hong Kong's Chinese population were not free from suspicion on this issue, and the question of mui-tsai -
A HISTORY OF HONG KONG
little sisters -had been raised long before. The custom of adoption, of both boys and girls, by which poor families transferred their rights in their children for a cash payment, was long established, and the forms clearly defined in the Confucian volumes of Domestic Rites. There was more than a suspicion however that girl mui-tsai were treated as 'pocket daughters' and trained as prostitutes. 'At an earlyage they are the victims of debauchees [who] deflower them in "slybrothels", paying the "pocket mother" a large price, and the girl is thus launched on a brothel career.'40 At the same time there is no doubt that many perfectly respectable arrangements were made for the adoption of poor children who would otherwise have been very badly off indeed. The subject of the mui-tsai was first raised by the pug-nacious Chief Justice Sir John Smale in 1878, who asserted that there were from ten to twenty thousand female slaves in the colony. Some respectable Chinese led by Fung Ming-shan, a rich and well-known compradore and a director of the Tung Wah, attempted to explain the difference between the venerable custom and its abuses. As a practical step Fung obtained permissiGn to form a Society for the Protection of Women and Girls, the Po Leung Kuk, which had as its object the prevention of kidnapping, and incidentally thereby the preservation of the mui-tsai system. In time the Po Leung Kuk became closely associ-ated with the Tung Wah and accepted by the government as reliablyrepresentative of the best Chinese opinion. When a�P debate on the subject in the House of Lords on 21 June 1880 led to an investigation by the Colonial Office, this resulted in the legal guardianship of mui-tsai being vested in the Secretary for Chinese Affairs, who worked closely with the Po Leung Kuk.
There the matter rested until Colonel John Ward had it brought to his notice while passing through Hong Kong in 1917. Ward was a colourful and powerful figure, who started work as a navvy at the age of twelve, founded the Navvies' Union and became Liberal Member of Parliament for Stoke on Trent. He commanded a battalion of the Middlesex Regiment on the W estem Front, and after the war foughtagainst the Bolsheviks in Russia, being created a C()ssack Ataman. These activities prevented him from doing more than drawing the attention of the Colonial Ofice and the Trades Union Congress to the question, until Clara Haslewood and her husband, a retired naval officer, took a hand late in 1919.
How far the Haslewoods' campaign against the mui-tsai system was justified in view of the many other more scandalous injustices then
A COLONIAL BACKWATER
being perpetrated is perhaps open to question, but it is certain that the efforts of the Hong Kong government, and Stubbs in particular, to silence them by what Susan Hoe describes as 'lies and distortion' were scandalous. Haslewood was forced to resign his Admiralty post -he was Superintendent of the Chart Department in Hong Kong -and Mrs Haslewood was subjected to angry and condescending criti-cism from the Governor. But Ward, back in Britain, raised the matterin the House on 26 April 1920, asking that action should be taken 'toremove this stain upon the British name in the Far East'. The ColonialSecretary at the time being the reinstated Lord Milner, sympatheticreactions could hardly be expected, but in February 192g1 he was suc-ceeded by Winston Churchill. It took some time, and the good officesof such influential supporters as Colonel Wedgwood and Eddie Marsh, Churchill's Secretary, to get Churchill, then absorbed with the prob-lems of the Middle East, to focus on what by comparison was a minor issue.
When Churchill acted, it was in typically forthright fashion. On 22 February 1922 a telegram went out to Stubbs: 'Mui-tsai. I am not at all satisfied. Unless I am able to state that this institution does not involve the slightest element of compulsory employment (which is the essence of slavery) and that every mui-tsai of a certain age is in law and in practice free if she wishes to leave her adopted parents or employers, I cannot defend its continued existence in a British Colony.'41 Churchill went on to instruct Stubbs that a proclamation must be issued immediately making it clear that the status of mui-tsai, as understood in China, would not be recognized in Hong Kong. Stubbs found himselfgin the old predicament of Hong Kong Governors -caught between fits of morality in Britain and the dogged determi-nation of the Chinese to clef end their ancient customs, reinforced bya British community in the colony resentful of any Whitehall dictation.He telegraphed back to Churchill that the Hong Kong governmentand its Chinese advisers considered 'that the issue of a proclamationwould be dangerous, especially as exposing a large number of girls tothe wiles of procuresses; and they deprecate it'. Churchill was havingnone of this, and on 21 March he sharply ordered Stubbs to 'issuewithout delay a Proclamation as directed'.
The well-oiled machinery of Hong Kong governmental procrasti-nation was put into gear. A report would be required before taking_ precipitate action. This was inconveniently promptly forthcoming, but recommended a comprehensive and extremely expensive scheme for
A HISTORY OF HONG KONG
rescuing and training the mui-tsai in a new industrial school. The potential cost of this proposal aroused the indignation of the taxpayers of Hong Kong, and the Governor took the opportunity of suggesting a compromise. This arrived in London on 24 July, not a propitious season for government action. A month later Churchill instructed that the Governor's plans 'should be brought into operation without delay'. This succeeded only in producing a telegram, not from Stubbs, who had gone on leave, but from Claud Severn, the Colonial Secretary, explaining why even this action was inadvisable in view of the strong objections of the Chinese community. By this time Churchill was out of office, and it was his successor, the Duke of Devonshire, a decent but bailed man, who had to cope with the problem. Another delay was allowed while the subject was once more discussed.
In Hong Kong the debate that took place in the Legislative Council on 28 December 1922 was unusually heated. Sir Shouson Chou was concerned that if mui-tsai were legally liberated at eighteen, an age 'when control is more than ever desirable', they might misuse their freedom in all sorts of ways. P.H. Holyoak, a member of both the Executive and Legislative Councils, complained of 'base insinuations, positive misrepresentations and exaggerated absurdities in the British Press'. Governor Stubbs, while being obliged to use the official major-ity in order to enforce his instructions from Whitehall, assured the Councillors that he disassociated himself 'entirely from the venomous attacks which have been made on the Chinese population by ignorant persons at Home'.
In due course, nothing in Chinese affairs ever being quite as simple as Churchill might have wished, an ordinance was promulgated in March 1923, a year after he had first commanded it 'without delay'. The new law made it clear that no rights in the person of the mui-tsai could be transferred for payment, provided for the registration of exist-ing girls, and banned new contracts being made. But the registration clause merely empowered the Governor to demand registration, with-out specifically requiring him to do so. Since the opposition to such action by the Legislative Council and the Chinese institutions was unanimous, that part of the ordinance was suspended, no registration was effected and the matter kept as quiet as possible.
In 1928 another energetic lady became interested in Hong Kong. 'Little Red Ellen' Wilkinson, the Labour Member for Middlesbrough, raised the question of Yeung Ping Wong, a houseboy who had been flogged and imprisoned for having in his possession two copies of a
A COLONIAL BACKWATER
publication called the RedFlag. Leo Amery, the unrepentantly imperial-ist Colonial Secretary, gave her short shrift on that occasion, but was forced to reopen the question of mui-tsai, and asked Sir Cecil Cle-menti, who had succeeded Stubbs, for his advice. The new Governor transmitted exactly the same views, those of the 'respectable' Chinese, to Whitehall. There was one embarrassing complication in that the Chinese government had, two years previously, published a law for the 'Emancipation of Slaves and Mui-tsai', an unhappy pairing.
Clementi began his dispatch of 16 May 1929 by stating 'very defi-nitely that the abolition of the mui-tsai system is the settled and declared policy of this Government', but then went on for ten pages plus addenda to prove that the Chinese government had not been successful in liberating mui-tsai, except by the wily ruse of renaming them 'adopted daughters'. Since he was entirely opposed to 'any schemes of legislative "eyewash"', Clementi concluded that 'effective abolition seems impossible except by gradual education of the Chinese community on this subject and by _slow, but constant, pressure and by discouragement of the system in every possible way ... It would be as hard to free Hong Kong from it as to keep a place clear of mud at the mouth of the Canton River.' He made the point that whatever might have happened in the previous century there was no evidence that the mui-tsai were now recruited as prostitutes: 'Mui-tsai are by training not suited for use as prostitutes. The sale of a girl to be a mui-tsai has indeed the effect of protecting her from prostitution.' Even child prostitution was much jollier than might be thought: 'chil-dren acquired for training as prostitutes are not employed as domestic servants. They are generally taught to sing and play Mah Jong and to act as entertainers at restaurants; and in China large numbers of these girls, who are known as "cguitar girls", may be seen frequenting res-taurants, where they are called to amuse customers at dinner.'42
This bland account might have satisfied Amery, but Clementi's dis-patch was never received by him. In May 1929 the Conservatives were defeated in a general election and a Labour government formed with Liberal support. The new Colonial Secretary was Sidney Webb, the Fabian scholar, now Lord Passfield, who required more positive action. On 22 August a dispatch went out to Clementi, instructing him in the clearest terms:
After making all allowance for the difficulties in bringing the system to an end which are described at length in your dispatches,
A HISTORY OF HONG KONG
it is my duty to inform you that public opinion in this country and in the House of Commons will not accept such a result with equanimity ... I must therefore direct that the'third part of the Domestic Service Ordinance should be brought into force forth-with ... and that it will not be allowed to be a dead letter ... Ifully realize that time will be required to make the Law effective, but I am not prepared to acquiesce in a merely nominal enforce-ment of the law.
This ought to have been, as Stella Benson believed it had been, the end of the affair, but that was to underestimate Hong Kong's powers of resistance to change.
The registration programme on which Sir Cecil Clementi had reluc-tantly been made to embark had trawled out something over four thousand mui-tsai, and, after more pressure, inspectors were appointed to superintend their welfare. This was not enough for the reformers. The League of Nations Permanent Advisory Committee of Expertson Slavery,43 the Anti-Slaver>�P and Aborigines Protection Society, the National Council of Women, the Society of Friends, and the Arch-bishops of Canterbury and of York wanted more. Many free trips to the East followed. The League of Nations' expert report of 1934 was reviewed by a Hong Kong Committee and heavily amended in 1935. A subsequent British government Committee of Inquiry toured Hong Kong and Singapore and reported in turn in 1937; its recommenda-tions were at first accepted, and then shelved in favour of a minority report.
The upshot of it all was that in 1938 arrangements were made for all adopted daughters to be registered, which would, it was felt, unearth the missing mui-tsai: this registration found precisely one girl who had slipped through the net. Nor did the eventual Act of May 1938 lead to the discovery of a single child who had been procured for the purpose of prostitution. Nor, it should be said, did any adverse Chinese reaction to the invasion of privacy the registration and inspection neces-sitated appear. As before, reports of ill-treatment were followed up and prosecutions initiated without any assistance from the registration system.
A COLONIAL BACKWATER
Stumbling towards the twentieth century
Both these dissensions -on the registration of prostitutes and of mui-tsai -between Hong Kong and London arose from a similar cause, which was tha.t Hong Kong was becoming the only Crown Colony with so severely limited a form of self-government. During the First World War the question of establishing some element of democratic representation was once mqre raised, with the proposal that unofficial members of both Councils should be elected rather than nominated. A petition was sent in January 1916 to the Secretary of State asking that a government 'more representative of the wishes of the business men of this colony' should be created. This should be done, it was suggested, by increasing the number of unofficial members of the Legislative Council by four, which would have given them a majority, and in the Executive Council by two.44 The petition was bluntlyrejected, but pressure for change continued after the war. All sugges-tions advanced were characterized by an extremely restricted and indirect form of election, which would entirely exclude the Chinese population (then some 96 per cent of the total). They would have to rest content with their two, or perhaps three, representatives appointed by the Governor.
Even if the British government had wished to alter the Hong Kong constitution, such a move, in the post-war climate of decolonialization and the rights of subject people, would have been politically unthink-able. Clementi summed the situation up correctly in October 1928: 'The European desire for constitutional reform has been more or less killed by the realization that any changes would have to be in a Sino-phile direction.'45 {The unconscious loading in the word 'Sinophile' is instructive: it was not love for the Chinese, but a recognition of political realities that inspired the British government.)
In practice it was impossible to move far along that road. The unstable internal condition of China made it difficult enough to run Hong Kong safely even when full powers remained at Westminster. Many examples could be given by an aggrieved Colonial Office of how limited their theoretically absolute power could be: reluctant Gov-ernors with the support of their councils could delay action on instruc-tions, sometimfS for a very long time indeed. A democratically elected Council, however limited its power, would have tremendous moral authority,'which would be almost impossible for a British government to resist. And such councils would inevitably be swayed by Chinese
A HISTORY OF HONG KONG
nationalist passions, although it might be remarked that even so con-servative an administration as Peel's afforded coqsiderable protection to dissidents and revolutionaries. Ho Chi Minh founded the Vietnam Cong-San Dan in Hong Kong in 1930; in due course it became the Vietminh, dedicated to liberating Vietnam from the French, and later known as the Vietcong. \Vhen Ho was arrested the following year his extradition was demanded by the French authorities. His case was taken up by a British lawyer, Frank Loseby, and fought through to the Privy Council. An out of court settlement was reached whereby Ho was allowed to leave for a destination of his own choice, the Hong Kong government contributing to the costs of his appeal. There have often been discreditable shifts and shabby subterfuges resorted to by Hong Kong governments, but the rule of law has almost always pre-vailed.
What the Colonial Office did agree to do was to accept in 1928 Clementi's suggestion of an enlarged Legislative Council, with two more of both official and unofficial members. The selection of these was left to the Governor, and Clementi's choice of one Chinese and one Portuguese served as an indication of how completely out-of-date were hopes for an increase in the representation of the -British -'businessmen of this colony'. The appointment of the first Chinese to the Executive Council was a straw in the wind. Sir Shouson Chou, although born in Hong Kong, had made a career first in the Imperial and then the Republican Chinese governments before returning to the colony. Clementi's request to appoint Sir Shouson caused a flurry in Whitehall, where neither the Foreign Secretary, Austen Chamberlain, nor the Colonial Secretary, Leo Amery, were men of advanced views. Concern was expressed that Chou could not be trusted to observe the confidentiality of proceedings in the Council; Clementi replied that neither could the European members. He might have added that so little of moment was discussed at their meetings that confidentiality was not of the highest importance. Clementi gained his point, but the Foreign Office insisted that no secret documents should in future be shown to Council members. The irony that a Chinese could be a member of the highest administrative body of the colony while no one of the same race could rise above the rank of Constable in the police force passed without comment.46
For their part there was no discernible pressure from the Chinese for increased representation; all the agitation had come from the British community, and only a section of that. At least one method of can-
A COLONIAL BACKWATER 401
vassing public opinion might have been used, but in the elections to the Sanitary Board, the only public body tinged with democracy, enthusiasm was minimal. Elections were usually uncontested, and in only one, in 1932, was any attempt made at electioneering.
A reconstruction in 1908 had perpetuated the unofficial majority on the Board of six to four. Of the six, two Chinese and two others were nominated by the Governor. This left two who underwent a form of election by those on, or exempt from, the jury list, which included many Chinese. This system resulted not only in there being an unofficial majority on the Board, but in the possibility of the majority of unofficials being Chinese.
Not that there was much that the Board could do, since administrat-ive control was firmly held by the government. The President of the Sanitary Board was not medically qualified, but a cadet officer, appointed on the traditional grounds that it needed one trained in Chinese language and customs to ensure that tranquillity should be preserved, rather than efficiency attained. Powerful support for this attitude, and energetic oppm,ition to change, came from the Chinese unofficial members, determined 'to have some kind of buffer inter-posed between them and the demands of a professional hygienist who might intrude upon the privacy of their homes and family life, interfere with their freedom to overcrowd tenements for maximum profit, and infringe upon their liberty to live under insanitary conditions and spread diseases to their neighbours'.47
It took seven years for the first Director of Medical and Sanitary Services, Dr A.R. Wellington, appointed in 1929, to convince the government of the necessity to have a more modem system of sani-tation. Clementi had been sympathetic, but Peel persistently obstructed any change. In 1935 much sewage disposal was still being carried out in the time-honoured bucket method that had shocked Mrs Gordon Cumming in 1878. When reform did come, it was effected in the most economic way, satisfying all those who resisted change, by altering almost nothing except the name. The Sanitary Board, still under the direction of a cadet officer, with the same membership, elected from the same voters' roll and with substantially similar powers, became the Urban Council. This neatly removed the objection that while some relevant qualifications might be desirable for the head of a public health organization, quite clearly none were needed for the Chainnan of an Urban Council. It was not until 1939 that the new Director of Medical Services was given a real measure of control.
A HISTORY OF HONG KONG
Precisely similar objections were raised concerning the Department of Education. Again, this was run not by a qualified teacher, but by a cadet officer, without any suitable training. The dangers of this had been pointed out in 1927 by W.G.A. Ormsby-Gore, later Lord Harlech and at that time Under-Secretary of State to Amery; it lowered the prestige of the service and by cutting off promotion prospects made recruitment difficult. The system should, he wrote, be amended when the next vacancy arose. But the whole theory of British administration was, and to a considerable extent still is, based on the presumption that the generalist can turn his hand to any task. A facility in Latin verses is no longer absolutely requisite for admission to the higher grades of the Civil Service, but any analysis of the most senior posts will still indicate the predominance of Oxbridge degrees in the liberal arts. The post of Director of Education in the thirties was held by
G.R. Sayer (Classics, Queen's College, Oxford), author of a history of Hong Kong, translations from the Chinese and an edition of Horace. Not only was this unsatisfactory in principle, but Sayers was obviously not competent to be in charge of education. His only previous experi-ence in charge of a department had been the Sanitary Board, for which he was equally unqualified.
The matter was picked up again in 1934 by Sir Philip Cunliffe-Lister, Secretary of State, who wrote tc Peel uncompromisingly that, if Hong Kong's education was to be brought up to the standards available to Chinese elsewhere, 'This must necessarily mean that the Director of Education in the Colony shall be equipped with pro-fessional experience and technique to advise how best to apply in Hong Kong the continual improvements which have been made and are being made in School organization, methods of teaching, etc. It cannot be expected that a Cadet officer can equal a professional educationalist
48
in up-to-date knowledge of this specialist character.'
Sayer was less equal than most. His lack of capacity was noted by the Advisory Committee on Education in the Colonies in August 1937, after a report on Hong Kong had been submitted to them: 'we saw no reason to question the recommendations contained in the Burney Report, and we thought it impossible for effect to be given to these recommendations if the education policy of the Government of Hong Kong continued in accordance with the views expressed by Mr Sayer'.49Soon after this conclusion was reached, in August 1937, Sayer was retired early, but modernization of the structure of education in Hong Kong had to wait for the end of the war.
A COLONIAL BACKWATER
Health and education might be left in the control of a less-than-competent generalist without too great danger, but finance is a more sensitive subject. Hong Kong did not suffer as badly in the thirties as did much of Europe or the USA, but it did not escape all the effects of the Depression. Silver rqse steadily in price throughout the first years of the decade under American buying pressure, to the extent that in 1935 China renounced the silver standard, forcing the colony to follow suit. For the first time the government was able to manage the colony's own cum .. ncy, which it did to some purpose, devaluing the Hong Kong dollar to a competitive level and thereby giving a sharp impetus to the colony's trade. In spite of the disadvantage this caused to the colonial finances -since much of the expense had to be funded in now revalued sterling, which led to a cut being levied on Civil Service salaries -between 1935 and 1939 the total revenue rose steadily from $28.4 million to $41.5 million.
In order to manage financial affairs more professionally the post of Colonial Treasurer, in all colonies, was upgraded in 1937 to that of Financial Secretary, who became the third most senior officer in the administrative hierarchy, and in Hong Kong often the most influential. Cadet officers had already proved unsatisfactorylast, C.M. Messer, having been replaced in 193 1 in this function, the
by a specialist finan-cial controller. This was Edwin Taylor, who had already spent thirty years in the Board of Trade and in African financial administration, and who prepared the ground for the first Financial Secretary, SydneyCaine. A young (thirty-five) graduate of the London School of Econ-omics, of which he was later Director, Caine soon provided for the colony a modem financial planning system which included, for the first time, a comprehensive system of taxation. The opium monopoly, which had previously been so reliable a contributor to revenue, then represented a mere I per cent of the total.
These reforms were negotiated through a not always receptive Legis-lative Council by Sir William Peel' s successors. Sir Alexander Calde-cott, who was appointed in 1935, was in office for less than eighteen months before being succeeded by Sir Geoffry Northcote, who lasted only a year longer. Caldecott was a personable and popular man who had spent thirty years in Malaya and was speedily promoted from Hong Kong to be Governor of Ceylon, where he did much to prepare for self-government. Northcote was amiable and conscientious but suf-fered persistent ill health, which might account for one embarrassing incident when, having sent a dispatch to the Colonial Office, he found
A HISTORY OF HONG KONG
that he had forgotten signing it, and could not remember whose recom-mendations were incorporated; but knew that he disagreed with them.
Many of the less competent cadet officers, promoted beyond their ability, had been disposed of, but Northcote was left with one of the most unsatisfactory. R.A.D. Forrest was allotted the admittedly difficult task of running the Immigration Department at a time when thousands of refugees were pouring over the frontier in flight from the Japanese armies. By 1920 the population had risen steadily to about 600,000. The uncertainties in China had pushed this up to over a million by 1938, but in the next two years over half a million Chinese fled to Hong Kong, sometimes at the rate of five thousand a day, and all required documentation. The opportunities for corruption were con-siderable, and appear to have been taken with alacrity. A government commission of inquiry found that Forrest was 'an irresponsible incom-petent, unfit to run a government department'. He became only the second cadet officer in the history of the service to be asked to resign.
THE GREATER EAST ASIA CO-PROSPERITY SPHERE
A passive and shameful acquiescence
The wars between China and Japan that spluttered in 1932 and finally ignited in 1937 were due to something more complex than unprovoked Japanese aggression. Not that there was any doubt about Japan's often violent expansionary tactics since the Meiji restoration in 1868, which had included war with China in 1895, resulting in the annexation of Formosa (Taiwan) with the Pescadores; war with Russia in 1905, which brought cession of Russian gains in Manchuria; and the annexation of Korea in 19m. During the First World War Japan succeeded in extorting from the government of Yiian Shi kai an agreement (the Twenty-One Demands) which strengthened Japan's commanding pos-ition in northern China, a position even further developed by a 1918 deal with Yiian's successor Tuan Ch'i-jui (Duan .rai). Much to the disgust of politically aware Chinese, these agreements were, for the most part, consolidated into the post-war settlements.
Since 1919 there had been a distinct softening ofJapanese attitudes, as it seemed that a democratic system was beginning to take root (adult male suffrage was granted in 1925, and a government of generally liberal tendencies held office). There could also be some element of self-satisfaction in contrasting the orderly situation in Japan, and indeed in the territories it had come by, with that of China, still divided among warring factions. The earnest co-operation of Japan with the League of Nations indicated a desire to turn over a new leaf inter-nationally, but by the end of the 1920s Japan was torn with internal dissension as a rapidly increasing population, export markets ruined
A HISTORY OF HONG KONG
by the Depression, discriminatory American legislation and Chinese boycons led to near-revolutionary levels of discontent. In the first two years of the thirties two Prime Ministers and a Finance Minister were assassinated. Democratic government became increasingly impossible as frustrated army commanders, who could rely on backing from the discontented younger men, struck out on their own.
It was an on-the-spot army decision, enforced literally at swordpoint over the protests of their own Consul, that led to the Japanese annex-ation of Manchuria in 193 2 and the establishment of the puppet state of Manchukuo under the Jaineant Emperor Puyi. Some excuses could be advanced; Manchuria, under the personal rule of the older and younger Marshal Zhangs, had become something of a wild card, almost independent of China. But this action by one of its few reliable sup-porters had to be viewed with dismay by the League of Nations. The affair might even then have been smoothed over had not -and again this was a decision by a local commander, taken �Pwithout reference to Tokyo -Japanese forces anacked Shanghai. Manchuria was remote, with few Westerners watching what happened there, but Shanghai was thoroughly internationalized and in the full glare of world anention, which was aroused to indignation at the violent deaths of several hun-dred civilians. The subsequent League investigation, although tactfully conducted, could not avoid some criticism of Japan, resulting in that country indignantly withdrawing from the League in 1933. From that time on Japan gave numerous signals that the plan of a 'Greater East Asia Co-Prosperity Sphere' -Japanese rule from the Russian border south as far as might be managed -was now operational. Using Man-churia as a base the neighbouring Chinese provinces of Jehol and Hopei were invaded, and by May 1933 Japan controlled the whole of north-east China, with Japanese troops stationed in Peking itself.
The Kuomintang government resisted these encroachments as best they could, which was not very well. The corruption of the Nanking government nullified Chiang Kai-shek's efforts to establish an effective dictatorship, along the lines of Fascist Italy. But if Chiang could not emulate Mussolini's economic reforms, the Chinese army was able, in the next three years, to demonstrate a courage that the Italian forces signally failed to show a linle later.
The undeclared war that began just south of Peking, at the Marco Polo bridge, inJuly 1937 developed to form a savage and brutal conflict that continued for eight years and was followed by another four years of civil war between the Kuomintang and the Communists. The inci-
THE GREATER EAST ASIA CO-PROSPERITY SPHERE 407
dent at the bridge, however, was not planned, being once again the result of a local clash which both countries then decided to make a casus be/Ii. Chiang Kai-shek opened the real fighting by a bombing raid on Shanghai; the attack was meant to destroy the Japanese fleet, but was badly mishandled and succeeded only in killing more civilians. The ferocious battle around Shanghai that followed eventually cost China a quarter of a million casualties. It was followed by a Japanese advance on Nanking, the Kuomintang capital, and the withdrawal of Chiang's government to a refuge in Chungking. Atrocities equal to the 'Rape of Nanking' had occurred before in China -less than a century ago, in the same place, in fact, during the Taiping rebellion -but Japanese brutality there was recorded in such shocking detail onnewsreels and in newspapers that the world shuddered. From thattime on Japan was, somewhat piously, considered a pariah state withwhich no civilized accommodation was possible. Inevitably this uncom-promising attitude led to the rebuff of advances from the more liberaland pacific sections of Japanese opinion and ensured the triumph ofthe militarists.
Before this stage had been reached it might have been possible for Britain to have re-established relations with Japan by recognizing that country's position in China. However distasteful, such an action would have made admirable sense in strategic terms. A weakened Britain, which hadg-encouraged by economically-minded governments -faith-fully observed all the treaty limitations on armaments, was facing the growing likelihood of a major European conflict. It would have been impossible at the same time to resist an attack in the Pacific by Japan, which after withdrawing from the naval treaties had made manifest her intention of pressing ahead with large-scale naval building. Carrelli Barnett believes that British failure to reach an accommodation with Japan was due to electoral pressures from 'an urban, rootless and emotional middle class, always ready to get in the fidgets of moral indignation'.1 If this was true in 193 5, when the subject was discussed internationally, Japanese actions two years later would have made it all but impossible for any self-respecting government to compromise.
Once full-scale, although still undeclared, war with China had begun, Japan endeavoured to cut off supplies to the mainland by a blockade of the whole of the Chinese coastline, excluding only the foreign ports, of which Hong Kong was incomparably the most impor. tant. Enormous quantities of arms -estimated at sixty thousand tons per month -poured from the colony into China, in spite of Japanese
�P A HISTORY OF HONG KONGe
demands, energetically backed by Sir Robert Craigie, the British Ambassador in Tokyo, to prohibit military goods crossing the border. The Japanese blockade was speedily reinforced, both by bombing Canton and the Chinese section of the Canton-Kowloon railway and by increased diplomatic pressure on the British government. This pressure public feeling, the Foreign Office and the Colonial Office, for once in agreement, resisted, although both France and Portugal caved in under Japanese threats to their regional possessions. Without such an excuse, the United States joined in, and placed an embargo on exports not only of arms, but of all implements of war -admittedly to both Japan and China, but to the great disadvantage only of the latter (15 September 1938).
British readiness to stand up to the Japanese was however becoming more and more restricted as war with Germany began to look increas-. ingly inevitable, and the necessity of conciliating Japan, so avoiding the impossible situation of a war on two fronts, became clearer. Only if the United States had been willing to offer some support would a British stand against Japan have been possible, but this was not forthcoming. It had always been understood, at least by the British, that Britain and the USA would work together in order to secure an Anglo-American predominance in the Pacific. Under the terms of the Washington Conference, confirmed by the London Agreements of 1933, the British and American fleets available in the Pacific, even allowing for the two-ocean strategy (the need to keep naval superiority in both Atlantic and Pacific) imposed upon them, could match the Japanese. But Japan had denounced the agreements in 1934, and initiated an extensive naval building programme, while America had consistently refused to become embroiled in foreign concerns, declin-ing to join the League of Nations -which condemned that worthy initiative to ultimate failure -or to attempt any resistance to the emer-ging totalitarian regimes. The American public, shocked by pictures of burnt and abandoned babies, might be emotionally committed to China, but was still nervously isolationist and reluctant to resist aggres-sion: 'A passive and shameful acquiescence in the wrong that is being done,' as the former Secretary of State Henry Stimson put it. Since it was also clear that Hong Kong was likely to be the centre of any Anglo-Japanese conflict, the more furiously pacific of American iso-lationists would have seized on the excuse of not abetting British imperialism in order to withhold their support.
So Britain, left on her own, could do little but sit on the fence, not
THE GREATER EAST ASIA CO-PROSPERITY SPHERE 409
restricting exports of war material to China while at the same time attempting to soothe Japan, until the problem was solved on 12 October 1938 by the Japanese capture of Canton. Sir Archibald Clark Kerr, the British Ambassador in Chungking, saw this as the beginning of the end: 'Canton had felt safe in its proximity to Hong Kong, an unreasonable feeling if you will, but one which has been none the less deep. The occupation of Canton and our puzzling acquiescence in ithad shaken the hundred-year-old Chinese belief in the prestige of Great Britain which would now shift to Japan.'2
Hong Kong was thereby immediately brought into the front line. The issue now became whether Hong Kong, the stream of arms from which had been so useful to the Chinese cause, would be opened to the Japanese to supply their own military needs. To their credit (although the probability of strikes by Chinese in the colony had they succumbed was not unnoticed) the British government stood firm against this, but did agree in January 1939, again in the absence of any US support, to suspend arms shipments across the land frontier.
In September 1939 the long-expected war in Europe finally broke out. Just as British strategy in the Far East had assumed American co-operation, in Europe it depended on France holding off an attack for long enough to enable British forces to be raised, trained and equipped. The unexpectedly sudden collapse of France in June 1940 left Britain alone facing Germany and her allies. In these circumstances a war with Japan was unthinkable, and further concessions inevitable. 'We are,' one Foreign Office official admitted, 'afraid of Japan and show now a bolder, now a less bold front dependent on the fluctuations of the European situation.' Supplies to China through Hong Kong were beginning to be replaced by those passing over the newly con-structed Burma Road, and the Japanese insisted that this source be cut off. Lord Lothian, the Ambassador in Washington, attempted to enlist American support in resisting the demand, but was informed that the USA 'could do nothing effective'. Cordell Hull, the Secretary of State, advised Lord Lothian that 'It would be better to retreat, while refusing irrevocable concessions.' How the two parts of this policy were to be reconciled he did not vouchsafe. Hui! also blandly suggested that 'perhaps the British Government might care to explore on their own initiative the possibility of a settlement with Japan'. In spite of this extraordinary suggestion, Hull felt justified in complaining, whenthe British government agreed to close the road for a three-month period in July 1940, that their action was 'unwarranted'.3
A.OHISTORY OF HONG KONGO
Such British concessions were greatly resented by the Chinese, much more concerned with their own fight against the Japanese invader than with the British war in Europe, a concern which the Hong Kong government shared. At this point the Cantonese spirit of enterprise reasserted itself, and a considerable smuggling trade in petrol and spare parts burgeoned, with the benevolent neglect of the Hong Kong authorities. More robust support seemed to be forthcoming when Northcote pressed for this activity to be legalized and the British under-taking not to pass military supplies through the port withdrawn. Since at the time the Japanese forces were staging frequent provocative inci-dents aimed at Hong Kong, such a move might well have led to a full-scale Japanese attack on the colony, independent of any more general Pacific action. Whether this would have been an immediate casus belli or not would have been open to question, but the British Ambassador in Tokyo, Sir Robert Craigie, desperately attempting to avoid 'an incident provoked by the local Japanese military ... at so exposed a point', convinced the British government that things were best left as they were. (Craigie was also attempting to patch up an agreement with the Japanese for the resumption of supplies in return for their withdrawal from Indo-China, but even had this succeeded it would only have exacerbated the situation in China.) One prescient official, the Permanent Under-Secretary at the Foreign Office Sir David Scott, commented on 8 August 1941: 'I think we might leave it at that for the time being. The question will probably solve itself one way or the other very shortly.'4
Essentially a blockade
Sir David was proved right in December of that year when the Japanese finally struck. The speed and power of their attack took their victims completely by surprise. The raid on Pearl Harbor (7 December) was followed the next day by landings in Malaya and air raids on Hong Kong and the Philippines; twenty-four hours later the Eritish battleship Prince of Wales and the battle cruiser Repulse were sunk. In his memoirs Churchill recorded his shock at the news: 'In all the war I have never received a more direct shock. The readers of these pages will realize how many efforts, hopes, and plans foundered with these ships. As I turned over and twisted in bed the full horror of the news sank in upon me ... Over all this vast expanse of waters, Japan was supreme,
THE GREATER EAST ASIA CO-PROSPERITY SPHERE 4Il
and we everywhere w.re weak and naked.'5 Nowhere was this more true than in Hong Kong.
On 7 January 194g1 Churchill, now Prime Minister, had written to General Ismay, Commander-in-Chief, Far East, who had been urging that reinforcements be sent to Hong Kong:
if Japan goes to war with us there is not the slightest chance of holding Hong Kong or relieving it. It is most unwise to increase the loss we shall suffer �Pthere. Instead of increasing the garrison it ought to be reduced to a symbolical scale. Any trouble arising there must be dealt with at the Peace Conference after the war. We must avoid frittering away our resources on untenable pos-itions . . . I wish we had fewer troops there, but to move any would be noticeable and dangerous.6
Hong Kong became, in September 1941, the responsibility of a new Governor, Sir Mark Young. Northcote had been ill for some time, and was obliged to leave in May 1940 for treatment; on his return it was clear that he was still not fit for duty. Sir Mark Young had no experience of the East, apart from his time as a cadet in Ceylon. Since 1928 his postings to East and West Africa, Palestine and Barbados, had given him little training useful for leading a Chinese community under attack.
The position of Hong Kong, should war with Japan break out, had been the object of some discussion by the British government. Its loss would be a terrible blow to British prestige -a point the Foreign Office found particularly sensitive -but there was not much that could be done to defend the colony. Of the three defensive standards discussed -A, B and C, which ranged downwards from the defence requiredby a main naval base -the lowest, providing for the minimum neededto support a delaying action, was unanimously agreed upon. The onlytask required of the colony was to hold the Japanese for long enoughto allow Singapore to be reinforced. Ironically, when hostilities beganAdmiral Sir Tom Phillips pressed for Hong Kong's defences to beupgraded to the highest standard as a deterrent to Japan, 'that hide-bound nation', who would be 'nervous of being cut off by the BritishFleet'. When the time came Phillips and his battleships were at thebottom of the sea, sunk by the hide-bound nation's mastery of the newweapon, bomber aircraft. The Defence Committee would not �Pagreewith Phillips, and held to their previous policy that 'Hong Kong mustg
A HISTORY OF HONG KONG
be regarded as an outpost and held as long as possible. We should resist the inevitably strong pressure to reinforce Hong Kong and should certainly be unable to relieve it.'7
In spite of this accurate assessment reinforcements of a sort were sent to Hong Kong. Two regiments of Canadian infantry had reached the colony in mid-November 1941, although without their heavier equipment. On I December the Joint Chiefs of Staff decided to ask the Canadian government for the balance of an infantry brigade (essen-tially one more infantry battalion together with brigade artillery and engineers), but fortunately this could not be done in time. In spite of the ultimately disastrous outcome, the strategic thinking was not at the time unsound. Anglo-American co-operation, sedulously nurtured by Churchill, had strengthened to the point where a joint embargo on strategic materials going to Japan, and clear threats of war if furtheraggression was attempted, were issued. (It is possible that Japan might have been willing to compromise in order to have this embargo lifted; Sir Robert Craigie certainly believed that he had such an agreement within his grasp.) But there was still no American undertaking to respond to a Japanese attac'k on British territory, nor any real likelihood of any such undertaking being given. British planners could only assume that sooner or later the Americans would join in, and that a holding operation until this occurred was the best that could be managed.
The staggering success of the Japanese attacks in early December 1941 overturned these assumptions. America was in the war with a vengeance, but with her naval power in the Pacific almost wiped out, along with the British battleships. Singapore, into which troops had been poured, was still considered capable of holding out for at least six months, but there was no hope for Hong Kong. 'The garrison,' Churchill acknowledged, 'were faced with a task that from the outset was beyond their powers.' After the arrival of the Canadians in Novem-ber there were six infantry battalions -one each of the Royal Scots, the Middlesex, Punjabis, Rajputs, Winnipeg Grenadiers and Royal Rifles of Canada -from three separate armies, supplemented by the Hong Kong Volunteers, who were to prove by no means less effective than the regulars. A reasonable standard of all-round fixed coastal defence was provided against a naval attack that never materialized. As a result many of the bigger guns -eight of the 1893 pattern 9.2-inch and fifteen later six-inch pieces -were pointing in the wrong direction for much of the time. Close infantry support was left to the Hong
THE GREATER EAST ASIA CO-PROSPERITY SPHERE 413
Kong Regiment of Royal Artillery, partly equipped with Kipling's 'screw guns' -mule-borne light guns -and its usefulness further limited by the complete absence of air spotting or, after the first Japan-ese strike, any forward observation posts. By contrast the Japanese counter-battery fire was unfailingly accurate, based upon careful obser-vations and map references prepared before the attack by the Japanese fifth-column within the co.lony. It had always been intended that the defence of the colony would be the task of the Royal Navy, but when the invasion came the Navy could muster only one destroyer, four small gunboats and some motor launches. From the beginning the Japanese had total control of the air, having destroyed the few obsolete RAF planes on the ground.
There was, as the Prime Minister had previously acknowledged, no possibility of reinforcement. In spite of this, the beleaguered Sir Mark Young was to cable the Secretary of State in London on 20 December: 'Forces of General Yu han mou now within a very short distance.'8This was strictly true in that a few units of the Chinese army were not very far behind the Japanese, but evincing only the most peaceable of intentions. Chiang Kai-shek had however previously claimed that two Chinese divisions were rushing to the aid of the colony and fiercely engaging Japanese forces; this was the purest eyewash. In the absence of any prospect of relief a successful defence could not be thought of, and the only question was when a surrender would be made.
It came about more quickly than expected owing to a combination of bad luck, poor planning and tactical incompetence on the British part and fine fighting by the Japanese. 9 The military commander, Major General C.M. Maltby, had taken post only in August, and had there-fore had limited opportunities for training, a serious disadvantage since not only were the ground troops insufficient in numbers, but they were inadequately trained and badly equipped. The greater part of their mortars and mortar bombs were missing, and the 9.2-inch coastal defence guns had only fifteen shells apiece. The infantry were required to man an incompetently constructed line of defences -the Gin-drinkers line -extending right across the New Territories, which was incapable of being held by the forces committed to it. Three battalions, some three thousand rifles, were expected to hold the eleven-mile line for at least a week. It was a wildly optimistic estimate, and the fighting lasted for only forty-eight hours before a withdrawal from the main-land, including the city of Kowloon, was decided upon.
In his signal to the Commander-in-Chief, Far East, Maltby put the
A HISTORY OF HONG KONG
best construction on the situation. On the previous day, 11 December, he had reported that enemy progress had been confined, and that they had been 'beaten off'; in a classic military meiosis he continued: 'Position, however, called for re-adjustment of the line.'10 Fortified by this misleading assessment, the Commander-in-Chief, in a cable to the War Office that showed the miserable qualities of British military intelligence, referred to the Japanese operation as 'essentially a block-ade'.'1 The truth must have dawned the following day when they received Maltby's next cable: 'The position was unsuitable for a pro-tracted resistance, and by noon the decision was made [to abandon the only defensive line that existed and to evacuate the mainland] . . . Morale of civil population considerably shaken by unexpected evacuation of Kowloon. Fifth column active.'
The island of Hong Kong itself now became the target for concen-trated artillery fire and bombing raids. Fixed batteries were put out of action and deserted by their Chinese gunners, but the army command maintained, either from ignorance or habit, a stiff upper lip in its reports to the Commander'-in-Chief. The casualties suffered on 16 December were 'remarkably light' -nine officers and I 02 other ranks killed or missing. A Chinese merchant, Chau Lim Pak, had been arrested for 'defeatist talk', and the morale of the civil population 'continues to improve'. The Japanese offer to accept a surrender was rejected: General Maltby considered 'all is not well in their camp, although it is difficult to say whether this is due to the Chinese threat to their communications or to the loss we have inflicted'. Accordingly the War Office were given to understand by the Commander-in-Chief on 18 December that the Japanese had been surprised by 'the robust attitude of the defence', and the request for air support to relieve pressure on Hong Kong made three days previously to C-i-C India was not pressed. Far from being disconcerted, the Japanese had been agreeably surprised by the ease of their victory, which came 'much faster than anticipated' .12
In his own mind Churchill had written off Hong Kong, and he was depending on Singapore to hold the Far Eastern front while arrange-ments were made with the Americans. Within four days of the news of Pearl Harbor he had left to meet Roosevelt in Washington, and sent his message of support to Hong Kong en route: 'We are all watching day by day and hour by hour your stubborn defence of the port and fortress of Hong Kong. You guard a link between the Far East and Europe long famous in world civilization. We are sure that
THE GREATE'R EAST ASIA CO-PROSPERITY SPHERE 415
the defence of Hong Kong against barbarous and unprovoked attack will add a glorious page to British annals.'13
On the same day that the Commander-in-Chief reported the 'robust attitude of the defence', the Japanese landed on the island itself. Maltby signalled that he was 'using all resources to evict them', and Governor Sir Mark Young issued a message to H.M. Forces: 'The time has come to advance against .the enemy. The eyes of the Empire are upon you. Be strong, be resolute, and do your duty.' Talk of advancing against the enemy was by then sadly inapposite, for after an initial vigorous resistance, communications had collapsed to an extent that both Governor and General Officer Commanding were out of touch with the action. In his cable to London of 20 December Sir Mark claimed: 'we launched a successful counter attack in neighbourhood of Wong Nei Chong Gap. Japanese were thrown back ... There have been no further enemy advances ... Parties of enemy mopped up in Repulse Bay area.' In fact the action resulted in the defeat of the British at all points and with heavy losses; the truth was that the British forces had been so cut up as to be separated both from central command and supply points, as described by the Naval Officer Com-manding in a signal to the Admiralty of 2 I December: 'little of Hong Kong still in our hands, unable to reach food and ammunition store as position surrounded'.
That day the Governor cabled to London asking for authority to surrender at discretion, only to be answered by more Churchillian verbiage: 'The eyes of the word are upon you. We expect you to resist to the end. The honour of the Empire is in your hands.' Although this cable had in fact been sent before Y oung's message was received, the Prime Minister then being in mid-Atlantic, the Governor was specifically told that 'H.M.G's desire is that you should fight it out as in Prime Minister's message.' This was confirmed by another cable of 21 December from Churchill, which started on a critical note: 'We were greatly concerned to hear of the landings on Hong Kong ... We cannot judge from here the conditions which rendered these landings possible or prevented effective counter-attacks upon the intruders,' and went on: 'There must however be no thought of surrender. Every part of the island must be fought and the enemy resisted with the utmost stubbornness. There must be vigorous fighting in the inner defences, and, if the need be, from house to house,' and concluded: 'by a prolonged resistance you and your men can win the lasting honour which we are sure will be your due. '14
AeHISTORY OF HONG KONG
..
Many criticisms have been made of Churchill's order to resist, reinforced as it was by rhetoric that in the cold light of hindsight sounds overstuffed and meaningless. Allowance needs ro be made for the fact that the Prime Minister, on his way to a critical meeting, had many more important concerns than the future of Hong Kong and its defenders, a future certain to be short and unpleasant: as so often, Hong Kong was low on the list of British priorities. And a resistance had to be offered, the only question being when the surrender should be made. Years after the event, it seems obvious that, lacking any coherent plans for the defence of the island, or the means to do so, and with no realistic hope of relief, the wisest course would have been to take the up the first Japanese offer, made on 13 December. But the Governor and the General Officer Commanding obeyed their instruc-tions, and passed on the order to their troops. General Maltby sent a message: 'Let this day be historical in the annals of our Empire. The Order of the Day is to hold fast.' Fight it out and hold fast they did, with heavy losses, subjected to intense bombardment by the units of heavy and siege artillery that the Japanese had brought up, together with some squadrons of tanks, until Christmas Day. The Hong Kong Volunteers attracted well-deserved admiration, as their Scottish, Chinese and Portuguese companies fought alongside the regular troops; one company, the 'Methusiliers', composed entirely of over-age volunteers, held their position for twenty-four hours against a fierce assault, with many casualties.
There was some baffied criticism of their commanders on the part of those who were being asked to write the Annals of Empire. One of the volunteers, Captain Potts, was disappointed to find GHQ 'safely below ground', largely unaware of what was happening, and dependent on the telephone for communications. Another, Private Remedios, had taken Churchill's words to heart: 'I was perhaps very naive at the time. I thought that Hong Kong would be fought for until the last soldier died.' So did Captain Boletho: 'I had believed and had been told to tell my troops that we would fight to the last man, to the last bullet. So to be told to capitulate was a serious blow to me.'15 When the pugnacious Potts did get some Japanese in his sights, and opened up, he was reprimanded by a regular officer for having fired without proper military permission. Such adherence to protocol did not prevent the Matilda Hospital being used as an ammunition store, nor St Stephen's Hospital being made to serve -by the Canadians -as a firing point, with tragic results.
THE GREATER EAST ASIA CO-PROSPERITY SPHERE 417
British accounts of-the fall of Hong Kong have highlighted the atrocities committed by the Japanese. The rape of nurses and slaughter of doctors and patients certainly took place, together with all the usual accompaniments of the violent capture of a city. One account may be allowed to stand for a catalogue of shameful brutality, that of Second Lieutenant Osler Thomas, who was at the Advanced Dressing Station at the Salesian Mission: 'After the wounded were murdered, the doc-tors and orderlies other than Banfill (Commanding, Captain RCAMC) were taken out, stripped to .the waist, lined up alongside a storm drain and, amid shouts of laughter, were bayonetted or hacked to death.'16 But much of the horror was due to the fact that the British were unaccustomed to being on the receiving end of such acts. Every Euro-pean country had experience of death and pillage at the hands of an invader, and a great number of countries all over the world have felt the after-effects of a British army, even if these were often, at least in more recent times, comparatively innocuous. The blame for the worst of the atrocities has to be shared with lax British command that per-mitted the improper use of medical premises for combat, as at St Stephen's. There is some evidence that Japanese commanders themselves attempted to restrain the troops, and one witness relates that the some of those responsible were subsequently shot.
It was the Chinese population who suffered most in the taking of Hong Kong. Dr Li Shu-fan, who was attempting to run a hospital in Kowloon, estimated that he had to treat at least ten thousand victims of rape: many were bayonetted in the streets. Others were disposed of with greater originality: some had their hands threaded together through bayonet holes before being thrown into the harbour; John Stericker saw on the trees by the Peak tram station 'three strings, like beads, of Chinese . . . as one dropped from exhaustion he pulled another down and there they were left to die' .17
Thanks to Japan, we are now a free people
After the Japanese invasion, a small group of civilians of all ages and many nationalities, although chiefly British, was bundled together in a prison camp on the Stanley peninsula and subjected for three years to malign neglecl, near-starvation, harsh discipline and the pem1anent possibility <>f torture and death, punctuated by occasional acts of kind-ness and humanity. Organization was left to the inmates themselves,
A HISTORY OF HONG KONG
under the official guidance of the senior British administrator. This was Franklin Gimson, formerly the Colonial Se<;retary, Sir Mark Young having been separated from the others by the Japanese. Although later most brutally handled the Governor was, to begin with, treated well enough. He was lodged in the Peninsula Hotel, from whence he wrote to Gimson on 30 December, saying that the Japanese were 'very polite' and asking for warm clothes, together with a long list of requisites for a Governor-in-captivity, which included sock-suspenders and copies ofJane Austen and Stalley and Co.18
Gimson, with a splendidly unfortunate sense of timing, had arrived in Hong Kong on 7 December. Then fifty-one, he had spent his whole career in the Ceylon Civil Service, where the pleasant and privileged life was not an ideal preparation for a Japanese prison camp, but he was a true-blue colonial administrator, not blessed with a lively sense of humour but completely reliable and capable of bringing some order into the most tumultuous of conditions. He was only allowed to join the other prisoners in March 1942, by which time they had organized themselves into a British Communal Council. This body was directly elected by all the prisoners, and it is significant that they declined to vote for any government official, with the exception of the Com-missioner of Police,John Pennefather-Evans. The Executive Commit-tee consisted of a newspaper editor and three taipans, with the Defence Secretary as an ex-officio member.
To the embittered prisoners the Hong Kong government had been thoroughly discredited. Dissatisfaction had begun long before the Jap-anese invasion. A compulsory evacuation in 1940 of British-national women and children had aroused great controversy, since those with white skins were sorted out by a pair of British ladies to be sent on to Australia, while those with brown or yellow complexions were dropped off at Manila. This 'disgraceful discrimination' was attacked in the Legislative Council, where it was claimed that 'Government ... has forfeited to a great extent the respect and confidence of the com-munity.' The emergency services, even after more than two years of preparation, were 'inefficient beyond description'. Acct:sations of fraud and incompetence in the preparation of air-raid defences and in the Immigration Department had led to a full-scale Commission of lnquiry into corruption in the public service. This had been aborted by the Japanese attack, but the retiring Governor, Sir Geoffry Northcote, had been seriously concerned, reporting to the Colonial Office that 'Several Government officers are under the gravest suspicion of having taken
THE GREATER .EAST ASIA CO-PROSPERITY SPHERE 419
bribes . . . I fear that the other disturbing outcome is going to be the revelation of serious laxity in the control of Government expenditure ... All this leaves me with a nasty taste in my mouth on my departure hence, and I feel somewhat culpable myself.'19
No suspicion of course attached to the newly arrived Gimson, who was clearly entirely honourable and incorruptible, but his personalprickliness, amounting to arrogance, did little to mollify the malcon-tents. He was insistent that the legitimate government of Hong Kong, embodied in his person, continued to exist, an attitude that did much to ensure that at the end of the war Hong Kong did in fact remain British: but he had little use for democracy within the camp, which he did his effective best to reduce to a purely advisory capacity. In particular he distrusted, and indeed despised, the businessmen, going to the extraordinary lengths of recording in his diary: 'It is impossible for businessmen to discuss political questions, (which] must be borne in mind in considering any proposals for the future of Hong Kong,' and that the elected Council was 'a revolutionary body ... a subversive organization'.20
Under Gimson as Camp Commandant the Camp Committee, in which the official element gradually predominated, took what decisions they could on domestic matters, and a Camp Court, presided over by the Chiefjustice, Sir AtholMacGregor, settled disputes.John Stericker described the proceedings of the Committee, of which he was Secretary: 'It was most extraordinary because the British love committees and if you have committees they have to be serious. Everything has to be done properly and you sit solemnly and take notes.' With a vision firmly fixed on the end of the war, Gimson resisted proposals that British prisoners should be repatriated, as the Americans were, in order that an Imperialpresence in Hong Kong would visibly be continuous. In this aim the Japanese unconsciously helped, since they preserved the separate iden-tity of the colony as a Japanese territory with its own Governor, rather than incorporating it in the occupied area ofmKwantung.
Under the stress of life in the camp some unpleasant characteristics came to the surface. Sir Robert Hotung's daughter, Jean Gittins, who was among the internees, reported:
There were some Britishers who felt that if it was not for the many Eurasians in the camp, there would be sufficient food for them. Racial discrimination had by no means moderated in the face of general adversity and that type of person was too bigoted
�PA HISTORY OF HONG KONG
in outlook to understand that the food was provided, not in a
lump quantity, but rationed by the Japanese, according to the
number of mouths to be fed.21
The near-starvation of the prisoners was not a matter of deliberate policy by the Japanese, but rather one of inefficiency and lack of resources. In principle, and sometimes in practice, both Red Cross and outside relief was available. An important factor in this was the presence outside the camp of the senior members of the Hongkong and Shanghai Bank staff, headed by Sir Vandeleur Grayburn. This group had been retained by the Japanese to liquidate the resources of the Bank and to issue countersigned hank notes which were then used by the Japanese Yokohama Specie Bank. Being lodged in Victoria they were able to develop a network which went far beyond their permitted tasks to include systematic intelligence links with the British Army Aid Group operating in China. Through these connections escapes were planned and substantial sums smuggled in to the civilian and military camps. Their activities were eventually betrayed by an Indian informer and one member, C.F. Hyde, was executed, while two others, including Graybum himself, died in the prison hospital, basically from gross neglect.22
Another outstation existed at St Paul's French Hospital, where Dr Selwyn Selwyn-Clarke and his wife Hilda had been allowed to stay to control sanitary services. Selwyn-Clarke specialized in smuggling medical supplies into the camps; drugs were not too difficult, but 'To amateur smugglers a dentist's chair was quite a challenge.' By careful observation the Clarkes had timed the movements of Japanese patrols, and calculated that they had a window of opportunity of thirty minutes to break into the stores, remove the chair, and reseal the entrance. The penalty for such behaviour was death, and although the smugglers were successful on that occasion Clarke was eventually betrayed and arrested by the Kempeitai, the Japanese military police.23
These internal resisters were supported by a network operating through occupied China, the British Army Aid Group. One of those peculiarly British private enterprises, the BAAG had been started by some escapees from Hong Kong, of whom the most prominent was Lindsay Ride, Colonel in the Volunteers and Professor of Physiology at Hong Kong University. He gathered about him an eclectic selection, some hundreds of students, doctors, nurses and soldiers, who became officially part of the Indian Army. Based in Kweilin, with forward
THE GREATER EAST ASIA CO-PROSPERITY SPHERE 421
stations including one at Weichow on the East River, the BAAG col-lected intelligence in south China and kept up constant communication with the prisoners, civilian and military, in Hong Kong.24 Many of the members of the Chinese resistance were also part of the Communist organization, as in occupied France, and their bravery did much to stimulate a degree of colonial sympathy for the Communists in the later civil war.
The great achievement ofJapanese rule in Hong Kong was to con-vince the Chinese population that, by comparison with that of the Greater East Asia Co-Prosperity Sphere, British rule was both benign and competent. It might have been otherwise, since the Japanese had some strong cards to play, especially in the matter of race. Half a century of aggression, culminating in the deaths of millions of Chinese, might not have endeared the Japanese to their prospective partners, but Chinese resentment against often unconscious British attitudes of racial superiority, although usually subdued, had always been strongly felt. The Hong Kong News, edited during the occupation by the Japan-ese, hammered this point home. A regime which gave power to 'callow British youths' and 'half-witted Englishmen' had been replaced: 'Thanks to Japan, we are now a free people, and the shapers of our own destiny. The question of colour is dead.'25 And to some extent at least the Japanese did go further than the British ever had in extending Chinese participation in the decision-making process. District ;:\nd area bureaux and central councils were established which exposed a much larger number to some nominal share in government.
If the influence of these councils was largely illusory, it was not much more so than that of the previous Municipal Council, but any goodwill the Japanese might have won in this direction was eliminated
a thousand-fold in others. Corruption, which under the British had been .confined to the lower levels of police and other officials, and usually kept within modest bounds, became vicious and endemic. A mass of petty regulations gave innumerable opportunities for every branch of the Japanese administration to exercise squeeze. Li Shu-fan described how 'Japanese orders could not work because of the almost impossible and cumbersome red tape ... [There was] a great deal of quarrelling and personal sabotage among the Japanese officers over private plunder and jockeying for position.' It is estimated that over ten thousand Hong Kong civilians were executed by the Japanese, but the form of persecution that aroused most resentment, according to Dr Li, was the constant face-slapping that any Japanese indulged in
A HISTORY OF HONG KONG
on the slightest provocation.26 Honourable exceptions existed, such as Ellen Field's 'Uncle John, Japanese officer and Lutheran pastor', but scant consideration was extended to the Chinese population. Once neutralized, Hong Kong was a place ofglinle strategic importance, and was occupied by those Japanese units unifit for more demanding ser-vice. Rations, already inadequate, became even more so through inef-ficient distribution. Starvation was endemic, and there were even cases of cannibalism.
An effort was made to teach Japanese in lieu of English, but edu-cation, in common with every other public service, collapsed almost completely. Before the occupation there were some 120,000 children in Hong Kong's schools; under the Japanese the number never rose above one-tenth of this figure, and towards the end was as low as three
'thousand.
It is not surprising that with very few exceptions there was no enthusiastic collaboration with the invaders, and a fair amount of resistance, especially in the New Territories, which were constantly infiltrated by Chinese errillas. Such staunch action was not
gu
shown by many prominent Chinese, since it was with somewhat disappointing unanimity that the non-European members of the Legislative and Executive Councils transferred their allegiance to the Japanese. Sir Robert Kotewall, Sir Shouson Chou and Sir Man-Kam Lo all joined the Rehabilitation Committee, and the first two later became members of the Chinese Representative Council and the Chinese Co-operative Council. It was true that both Sir Robert (who became Lo Kuk-wo during the occupation) and Sir Shouson had been specifically asked, by a deputation for the British Hong Kong adminis-tration, which included the Attorney-General and the Defence Secre-tary, 'to promote friendly relations between Chinese and Japanese to the extent necessary to restore public order, protect life and property and preserve internal security', but at least one of Sir Robert's state-ments, that 'All Chinese must try their best to support China and Japan to work for the early victory of the sacred war and for the establishment of the Greater East Asia Co-Prosperity Sphere, '27 seemsto have gone beyond the bounds of decent co-operation. As soon as the British Civil government took over after liberation Sir Robert was told that he must absent himself from public life pending investigation, but he was later reinstated. Fortunately for future good relations the two most enthusiastic collaborators, Ch'en Lien-po, the old instigator of the Merchant Volunteer Corps Plot, and Lau Tit-shing, a Japanese-THE GREATER �PEAST ASIA CO-PROSPERITY SPHERE 423
educated merchant, both died before the British returned. Some were tried, but it was recognized that most Chinese who had worked with the Japanese could not be blamed for submitting to another, equally foreign, rule.
The British Empire has been entirely wn�Ptten off.
Whether Hong Kong would indeed revert to British rule at the end of the war was hardly a question that bothered any of the prisoners at Stanley, with the exception of Franklin Gimson, steadfastly pursuing his colonial role. China certainly did not intend that this should happen, and saw its participation in the war as a lever for settling such old scores as extra-territoriality together with the foreign concessions and leases. These grievances were made the subject of a draft treaty pre-sented by China to Britain in October 1942, which also included a clause providing for the surrender of the New Territories lease. This the British government was not prepared to consider, but under pres-sure conceded that the matter could be discussed after the war. This conclusion enabled the surrender of extra-territoriality and the con-cessions to be agreed, leaving the way open to concentrate on the future of Hong Kong.
A conference had been sponsored by the Americans to take place at Mont Tremblant, near Quebec, between 4 and 14 December 1942 to discuss post-war policy in the Far East. At such discussions China could reasonably look to the United States for support in persuading Britain to modify its position on sovereignty. When Pearl Harbor forced America into the war the sympathy which prudence had hitherto held in check overflowed. Chiang Kai-shek's government, which by then was doing little actively for the allied cause -other than engaging some Japanese attention (and, by January 1941, turning its attention to fighting Communists rather than Japanese) -contributions more than counterbalanced by the huge amount of material that was being absorbed, unused, and which would have been much better employed in Europe -was given a generous loan and China acclaimed as a 'great power'. Roosevelt's draft of the initial United Nations declaration placed China second after the United States, before the USSR and Britain, which gives an idea of the workings of the President's mind; the draft was later amended. 28
Roosevelt was personally committed to the Chinese cause, and many
.A HISTORY OF HONG KONG
visitors were reminded that his maternal grandfather, Warren Delano, had been a partner in Russell's and that his mother bad spent part of her childhood in Hong Kong. The fact that Russell's had been active in the opium trade, and that the happy family memories were of !if e in a British colony, did not seem to cross the President's mind. Oliver Stanley, Secretary of State for the Colonies and son of the 17th Lord Derby, was told by the President when visiting Washington in January 1945, 'I do not wish to be unkind or rude to the British ... but in 1841 when you acquired Hong Kong, you did not do so by purchase.' To which Stanley, thinking on his feet, replied, 'Let me see, Mr Presi-dent, that was about the time of the Mexican War, wasn't it?'29
The President had an active bee in his bonnet on the subject of colonialism in Asia, and was particularly down on the French. Although quite specific commitments had been made by the United States, on more than one occasion, that 'all territories, continental and colonial, over which the French flag flew' would be restored to French sover-eignty at the end of hostilities, Roosevelt privately told anyone who happened to be about, including for example the Egyptian Minister at Washington, that 'He did not think his pledges about the French Empire were of importance.' Attempting to explain this somewhat cava-lier attitude, Secretary of State Cordell Hull told the British Ambassa-dor, Lord Halifax, that the President believed 'France has milked it [Indo-China] for a hundred years. The people of Indo China are entitled to something better than that.' An excuse for Roosevelt might be his alarming ignorance of Asian affairs. He actually told Chiang Kai-shek that he should take over French Indo-China after the war, which might be compared to Churchill instructing de Gaulle to recover Louisiana, and which would certainly have been most violently resisted by the Vietnamese.30
Hull attempted to pacify the most 'vociferous persons in the United States, including Vice-President Wallace, who wanted immediate inde-pendence for all colonies [and] a certain Texan [who] particularly urged that Britain should return Hong Kong to China. I retorted that Hong Kong had been British longer than Texas had oelonged to the United States, and I did not think anyone would welcome a move to turn Texas back to Mexico.' The British government was uncomfort-ably aware of such American feelings. Sir Ashley Clarke, of the Foreign Office's Far Eastern Department reported on 11 June 1942 after a visit to America that China was not only considered of equal importance to Britain as a war partner, but that the 'underlying relationship was much
THE GREATER EAST ASIA CO-PROSPERITY SPHERE 425
warmer and more confident'. The Foreign Secretary, Anthony Eden, agreed: 'The British Empire has been entirely written off by the Ameri-can opinion.'
And by some, at least, in Britain: almost all the Foreign Office staff, for example, were content that Hong Kong, which had always been something of a thorn in the side, interfering with their own much more important and dignified work, should be returned to a Chinese government. They had attempted to do so at the end of the First World War when Sir John Jordan, the British Ambassador at Peking, had suggested at least the return of the New Territories. It would be, he conceded, a sacrifice, but without such sacrifices 'no solution of the problem seems possible'. Curzon dismissed such sentiments as 'ideal-istic and impractical', and refused 'to dig up by the roots all previous cessions, leases etc.' Now, once more, some Foreign Office mandarins attempted to disembarrass themselves of the unwanted colony:
GladwynJebb was all for giving it up; Sir Neville Butler, of the North American Department, felt it essential because of 'America's passion for the Chinese'; Ashley Clarke and Sir John Brenan (formerly the Canton Consul-General, who had always despised the 'abysmal ignor-ance' of the Hong Kong government) of the Far Eastern Department concurred. Only Sir Maurice Peterson, head of that department, con-sidered many of the arguments fallacious, and firmly stated that 'In view of the ignominious circumstances in which we have been bundled out of Hong Kong, we owe it to ourselves to return there and I person-ally do not believe that we will ever regain the respect of the East unless we do.'31
In the Colonial Office a rather more robust view was taken. It was suggested only that 'the maintenance of British sovereignty in the Colony is [not] a matter beyond the scope of such discussions', but only Leo Amery, the tough old right-winger, then at the India Office, considered the welfare of the inhabitants of Hong Kong. They were British subjects, and they should not be surrendered32 (this is not a view that would necessarily have attracted his successors in future Conservative governments).
The consensus of opinion was that Britain should be prepared to negotiate on giving up Hong Kong only if this was part of a generalset+Jement in South-East Asia; there were too many unknown factors, including the increasingly likely possibility that the Kuomintang would not be in control of China after the war, to make any hard and fast decisions on the future. Lord Cranborne, Colonial Secretary at the
A HISTORY OF HONG KONG
time, gave the considered official view in a minute of 14 July 1942 which was to become a foundation of government .policy on Hong Kong. Resentment of America was evident:
... we should not allow ourselves to be manoeuvred into the positio:t of having been alone responsible for what has happened in the Far East. In fact, I feel that the responsibility of the United States is far heavier than ours. If they had been willing to collabor-ate with the League of Nations in the early days of the China incident, all that has happened since might, and probably would, have been averted. In fact, they hung back not only until it was too late to save the situation, but ur,til they were actually attacked.
The return of sovereignty to China could be agreed only as part of a. general settlement in Asia, which might include both Singapore and Hong Kong being 'managed, both as to their defence and adminis-tration, by international bodies' -but only if the Chinese and Dutch entered into similar arrangements and the Americans agreed to include Honolulu and Manila. In the absence of such a settlement Hong Kong would remain British. 33
The Colonial Office representative whose memorandum had inspired Lord Cranborne's declaration, and who attended the Mont Tremblant conference, was David MacDougall, who had been Chief Information Officer of the Hong Kong government before the invasion. He had made his escape from the colony just before the capitulation in a particularly bold venture headed by the Chinese Admiral Sir Chan Chak. MacDougall wrote an ironic letter from Mont Tremblant to Noel Sabine back at the Foreign Office: there was much 'choplicking of Americans ... by profession anti-British', and two predominant feelings at the conference: 'The Chinese are a nation of saints and heroes, above and beyond approach', and 'a distrust of Britain and in particular her intentions re colonies'. The critical tone was too much for Arthur Creech Jones, Minister for Labour and National Service, Ernest Bevin's Parliamentary aide and post-war Colonial Secretary, sent to toughen up the delegation, who 'got rather red in the face -like a labour leader and not in the least like a "sahib". Hands on hips, he rounded on the whole lot of them ... and barked and bit in a very forthright fashion. It was a wonderful scene ...t. [he] brushed aside with contempt the adolescent questioning of concepts which ... had been settled years ago in England.'34
THE GREATER EAST ASIA CO-PROSPERITY SPHERE 427
Creech Jones's spirited attack was, as far as Hong Kong was con-cerned, vitiated by the Foreign Office representative, Sir John Pratt, who quite on his own initiative assured the conference that 'when the time came to deal with Hong Kong, the Chinese would be completely satisfied'. Even the Foreign Office was disturbed at that; the obvious pun was made, and Sir Maurice Peterson indignantly minuted of Pratt: 'The best thing we can do is to bring him home and keep him here.'
At least the Mont Tremblant Conference took Hong Kong's future off the immediate agenda, since China was satisfied that the Americans would force Britain to disgorge. This impression was reinforced at the Allies' Cairo Conference in November 1943, when it became known that Roosevelt offered to support Chiang in preventing Britain from staying in Hong Kong if Chiang would co-operate with the Chinese Communists in fighting the Japanese. This was done in personal meet-ings between the President, Marshal Chiang and his wife, of which no records were kept, a circumstance not likely to allay British sus-picions. But it was also the first time that Roosevelt and Chiang had met, and the President's romantic attachment to the Chinese cause took a considerable battering when he was exposed to the ineptitude of its representative. In a discussion with Lord Louis Mountbatten, head of the South-East Asia Command, about the plan of campaign in Burma, in which the monsoon was, as ever, the limiting factor, Madame Chiang admitted of her husband: 'Believe it or not, he does
35
not know about the monsoon.'s
Roosevelt can hardly have imagined that he would find it easy to persuade his British allies to agree to this one-sided bargain, for Chur-chill had always made his own position abundantly clear. Stanley Horn-beck, of the State Department, had faithfully reported Churchill's view that Hong Kong was 'British territory and he saw no good reason why it should cease to be such ... He ref erred to public utterances of his own to the effect that he was not Prime Minister for the purpose of being a party to the liquidation of the British Empire.'36
As the war progressed it became more difficult for America to exert an influence on British colonial policy. The Allied landings in Italy and, in June 1944, in Normandy, had shifted the decisive land battles from the Pacific to those waged there and by Anglo-American forces. It was therefore of the utmost importance not to disturb that accord; but in the other theatre of war Chiang was increasingly showing himself not to be in control of more than a section of China, and the unpleasant
A HIS2TORY OF HONG KONG
facts of the Kuomintang administration were beginning to impinge on
the American consciousness.
Although American rhetoric on behalf of Chiang did not falter, his regime was increasingly sliding into disrepute, its corruption and inefficiency becoming a byword. 'The leaders in Chungking had no intention of expending their forces in China against the Japanese; their plan was to harbour them, such as they were, for employment ...aparticularly against the Communists in the north, after the war.' Their value was to hold down a large number of Japanese troops, but the very fact of the occupation of China, even had there been no fighting (and for most of the time there was not a great deal) would have had the same effect. When the Japanese made an attack, in the summer of 1944, they were able to roll back Chiang's dispirited conscripts hundreds of miles with little effort, helped by the Chinese peasants who turned against what was nominally their own army. Only in Burma, fighting alongside British troops and under the command of General Stilwell, were properly trained Chinese soldiers effectively deployed.
Powerful voices were also raised in defending British interests: Gen-eral Douglas MacArthur, Commander of Allied Forces in the South-West Pacific, 'expressed on several occasions his support for the cause of the British Empire in the Far East. In October 1944 he told General Lumsden that he fully appreciated the need for British forces to re-capture Hong Kong.' Indian politicians were beginning to show ner-vousness about the possible threat of a revived post-war China; Mountbatten had an old Hong Kong hand, John Keswick, as his adviser, who succeeded in putting the colony's case forcefully.
It should have been possible to soft-pedal the question, but Roose-velt continued to press what he believed to be the Chinese cause, although it was becoming increasingly evident that the Communists under Mao Tse-tung were a much more capable force than the irreme-diably decayed Kuomintang. In August 1944 he sent Patrick J. Hurley as an emissary to Chiang. Hurley, who has been described as both 'a rather old-fashioned American' and as 'insensitive and blustering, a braggart and a liar',37 was of Irish descent, and irreconcilably anti-British. His view of British colonial policy, which by then had been committed to decolonialization for the better part of twenty years, was a caricature: 'British imperialism seems to have acquired a new life. This appearance, however, is illusory. What appears to be a new life of British imperialism is the result of the infusion, into its emaciated
THE GREATER EAST ASIA CO-PROSPERITY SPHERE 429
form, of the blood of productivity and liberty from a free nation through lend-lease ... Britain ... must accept the principles of liberty and democracy and discard the principles of oppressive imperialism.'38
In spite of Hurley's enthusiastic espousal of Chiang's claims -which attitude was later developed by his fellow Irish-American, Senator Joseph McCarthy -by the time of the crucial Yalta Conference, in February 1945, it was clear that the Chungking regime could offer-nothing more to the war,. and that Russia must be brought into the fight against the Japanese. A very different view of Chiang, as 'an ignorant, illiterate peasant son-of-a-bitch', had been advanced by Gen-eral Stilwell. Although Hurley's view prevailed, and Stilwell was dis-missed from his post in charge of the Chinese and American forces, Roosevelt could not continue his opposition when Churchill spelt out his view of how the future of Hong Kong would be dealt with in the forum of the new United Nations: 'If His Majesty's Government agreed to the President's proposals [on the future structures of the United Nations] China might ask His Majesty's Government to return Hong Kong.' His Majesty's Government would have the right to state their case fully against the Chinese. It would be open to China 'to make her full case' and it would be open to the UN Security Council to 'decide on any of those questions without His Majesty's Government being allowed to vote'. The British government 'accepted' this position. There should be no Great Power veto on matters concerning itself. Of course, Churchill added, 'there was no question of their being compelled by the Security Council to give Hong Kong back to China if they did not think that this was the right step for them to take'.39
Some more of the heat went out of the matter in April 1945 when, on the death of Roosevelt, Harry S. Truman became President. Although he accepted the State Department's recommendation that 'we would welcome and assist when appropriate, amicable arrange-ments, including ... restoration of Hong Kong to China',40 the new President did not share Roosevelt's passionate support of China. Which of the Allies laid hands on Hong Kong was, he considered, 'primarily a military matter of an operational character',41 and depended on whose forces got there first. Singapore, with the British in Rangoon and no Chinese troops in the region, could quickly be retrieved into the imperial fold, and was officially part of South-East Asia Command under Mountbatten, but Hong Kong was in the Chinese sector, with Chinese irregulars somewhere at hand.
When at the Potsdam Conference in July 1945 the British were told
43�X A, HISTORY OF HONG KONG
of a proposed joint American-Chinese thrust towards Canton and Hong Kong, the danger of Hong Kong being liberated by the Chinese regular army became greater. While this could be forestalled by the Royal Navy dispatching a squadron, all British forces in the Far East had been put under American command as part of the planned final offensive on Japan, and formal approval for such a move had to be sought. Churchill, who had just been defeated in a general election, had been replaced by his erstwhile colleague Clement Attlee, at the head of a Labour government in which the Foreign Secretary was the redoubtable Ernest Bevin, a man quite as devoted to the Empire as any Tory. Some sharp exchanges followed as the British pressed the point that they, and not the Chinese, would accept the surrender of their colony. Truman believed the Chinese proposals for a compromise reasonable, and sent Chiang a 'personal message of appreciation for his considerate action': but Bevin was adamant, and Hurley reportedthat the Generalissmo considered 'the British attitude imperialistic, domineering, and unbecoming a member of the United Nations'. In spite of considerable agitation in the American press an agreement between the British and Americans was reached, and General Mac-Arthur was instructed to arrange that the British commander should take the surrender of the Japanese at Hong Kong. After some reluctance Chiang agreed to this, having been assured by President Truman that this concession to the British did not necessarily reflect subsequent American policy on the future of Hong Kong.
When the Japanese surrender became inevitable -it was finally announced on 14 August -negotiations on this ticklish subject had to be speedily concluded. Admiral Sir Cecil Harcourt had been sent with his squadron from Sydney at the shortest of notices, with the stores still unpacked on the decks. They had to wait at Leyte in the Philip-pines until clearance to enter Hong Kong Harbour was received, and it was not until 30 August that Harcourt reached Victoria. He was received, not by the defeated Japanese, but by the redoubtable Gimson. The gap had been filled by the Colonial Secretary, who at the moment of high drama when the Japanese surrender was announced, took the decisive steps expected of a good civil servant, and calied a committee. He recorded: 'Doubts were expressed ... as to whether it would be politic for me to take the oath as officer administering the government, as I was certainly entitled to do, and a decision on this was deferred.' But he did not let this stop him: 'Perhaps, rather elated from the altered relationship of captor and captive, I felt it was an occasion to
THE GREATER EAST ASIA CO-PROSPERITY SPHERE 431
assert my authority by saying "As senior official of the Hong Kong government I will take charge of the administration."g' When the Japan-ese demurred, pointing out that Hong Kong might not be restored to the British, Gimson was having none of it: 'I replied that this view was merely their expression of opinion with which I was not concerned. Iintended to carry out those. duties to which I had been appointed by His Majesty's Government.' Gimson was then contacted by a Chinese,member of the BAAG, .ho confirmed the Japanese surrender, on which he 'immediately summoned a few of the leading personnel in Stanley and the Chief Justice of the Colony, Sir Athol MacGregor, administered to me the oath of office'.42
For the next two weeks Gimson took charge, working from the French Mission building, and keeping control of the Japanese, who were still the only force in the colony, by exerting his impressive person-ality. When the Japanese were about to refuse permission for a British plane to land at Kai Tak to begin making arrangements for the surren-der, Gimson decided: 'I felt I must assert my authority.' He instructed the unhappy Japanese liaison officer: 'Details of this refusal must be inserted in your message. Omission to do so, as well as your attitude with regard to the landing of the plane at Kai Tak, will be treated as offences triable by a criminal court.' Gimson got his way, and in due course and proper form was able to welcome the Royal Navy as the Officer administering the colony.
Gimson's nearly single-handed period of rule ended when he was relieved by Admiral Harcourt on 30 August. Some opposition from the Japanese suicide squads had been expected, but only one craft,which might have been a suicide boat but was otherwise described, was encountered. As Swifisure, on which Admiral Harcourt had hoisted his flag, came into the harbour a signal was received that a 'pirate' junk had been spotted in Mirs Bay. Swifisure radioed back to the aircraft carrier Indefatigable, which was following, and soon after received the laconic reply 'Junk sunk.'43 Some desultory firing greeted them on shore, partly from Japanese in plain clothes, who were sum-marily dealt with, guilty or not: 'The Chinese take the opportunity to beat a few Japanese to death, hauling them off the trams and smacking at their heads with hammers.' The landing party was horrified by the state of the dockyard, described by Lieutenant John Gibson in authentically nautical terms of disgust: 'Untidiness and filth was the general rule. Bottles of apple wine and beer lie around, some half full. The paintwork is shabby ... the ropes are fifth-rate.'44
J\ HISTORY OF HONG KONG
The takeover from Gimson's interim government was a delicate matter, since the liberated prisoners who were holding affairs together were mostly in poor physical condition and extremely fatigued, but jealous of their responsibilities and inclined to look upon the new-comers as interlopers. They had also to adjust to a changed world; a news-sheet put out by BAAG attempted to describe it -Britain was now no longer the power it had been, but a debtor nation, with income tax at ten shillings in the pound, although there were some compen-sations, in that people were friendlier and less reserved, and the beer was getting stronger. Mr Attlee helped by sending a personal message to Gimson on 8 September in which he said: 'My admiration has been aroused by the vigour and courage with which you, in spite of the ordeal of internment, yourself took the first steps ... in re-establishing
45
British rule in Hong Kong.'
The new administration was entrusted to David MacDougall, who had been working with a small staff in Whitehall to prepare for the res-toration of British rule.46 Although officially a military administration, under the command of Admiral Harcourt as Commander-in-Chief, with military ranks being given to its civilian members -MacDougallwas a Brigadier -the new government was composed of colonial civil servants. Their task was alarming, since the collapse of Japanese administration had left the colony's economy destroyed and its inhabitants starving and ill. Did, indeed, the Chinese population want British rule restored? Only a scattering of Union flags were seen among the thousands of Chinese flags that greeted Admiral Harcourt's arrival. The deaths of a Chinese girl, murdered by a British seaman, and a hawker, accidentally killed by an Indian policeman, provoked angry disturbances. But for the moment this question could be shelved, since practical difficulties were urgently pressing.
Besides their own abilities, aided by MacDougall's splendid wry humour, the staff had little immediately to offer by way of relief. Mac-Dougall reported: 'By shifts and evasions we have carried on for nine weeks to conceal the essential weakness of our position, which is that the larder is bare ... and that the liberators brought rothing that fills stomachs or furnishes houses.' But somehow they managed to progress the considerable task of clearing up the chaos that Japanese rule had left. Between thirty and forty thousand coolies were immediately employed in clearing up the mess, supplemented on 4 September by three thousand RAF technicians.
Admiral Harcourt later said that the great thing was that the British
THE GREATER EAST ASIA CO-PROSPERITY SPHERE 433
government did not give him any orders, but 'completely dictatorial powers', which he was able to pass on to MacDougall as required. To begin with the only policing force available was formed from 'some seven hundred Chinese gangsters, who had been allowed by the Japan-ese to run gambling dens in return for maintaining law and order, [and] were used as police in the hope that they would keep themselves out of mischief and the rest of the Chinese underworld under control. They were denied the lucrative perquisite of gambling dens, but were compensated by the receipt of pay and the promise that they would be allowed to make their escape when it became possible to form a
47
more orthodox force. 'g
Civil administration was restored on the return of Sir Mark Young on I May 1946, and the intervening eight months of the Military Administration may be taken as a turning point in Hong Kong's devel-opment, personified in the differences between Franklin Gimson and David MacDougall. Gimson, like Maltby and Young, was a product of Victorian and Edwardian imperial certitudes, his attitudes formed by a pre-First World War (in which Young and Maltby both served) education. MacDougall, born in 1904, was a post-war man, of the Devonshire Declaration era of colonial administrators, brought up to assume that colonial rule was an interim stage -hence his annoyance that the Americans at Mont Tremblant had not recognized this fact. Gimson served admirably as an upright pillar of rectitude in the most difficult of circumstances, but MacDougall had the flexibility to control a community precariously balanced on the brink of chaos. It was a community too from which the previous leaders had been summarily expelled. British prestige, which had held together an empire without any real force of arms to bolster it, was irredeemably shattered; hence-forward it would have to rest upon performance, and not myth.
That performance MacDougall and his team provided. With the brave co-operation of the Hongkong and Shanghai Bank the colony's currency was restored. The Bank agreed to honour those 'duress notes' which had been issued by their officers under Japanese occupation, and to freeze all wartime debts. Funds were immediately provided to enable public utilities to function. Price controls, and a minimum wage, were introduced; emergency food supplies were rushed in and free meals provided. Jack Cater, who was later to be Colonial Secretary and a prominent figure in Hong Kong affairs, helped Dr Geoffrey Herklots, a biologist just emerged from the Stanley internment camp, to restore the fishing industry, a vital source of food. This vigorous
434 A HISTORY OF HONG KONG
and constructive effort was so quickly successful that by November 1945 it was possible to lift government controls and restore a free-enterprise system, a post-war adjustment unparalleled elsewhere. Con-fidence in British rule, shattered by the experiences of 1941, was regained. The local Chinese 'were impressed by the speed with which the rehabilitation of the economy was achieved, by the establishment of law and order and of a milieu favourable to the acquisition of wealth ... Its post-occupation record was admirable -it believed in business first.' The near-complete departure of the pre-war British had another important effect, in that many posts previously reserved for British expatriates had to be filled by Portuguese and Chinese. It was a change almost entirely for the better, but some time was needed before the full implications were realized.
The electorate of Britain didnm't care a brass
farthing abot!,t Hong Kong
Sir Mark Young was not restored to Government House without oppo-sition from the Foreign Office, where his appointment was seen as a determination to assert the pre-war status quo. In reality there was no question of this being so. Admiral Harcourt had recognized the exist-ence of a '1946 outlook' which demanded more just and equitable treatment for the Hong Kong Chinese. Sir Man-Kam Lo, at the first session of the restored Legislative Council, made it clear that 'the interests of the Colony as a whole and not those of any particular section of the community' must be advanced.
Young, convinced of the benefits of representative rule, needed no such warnings. His first act was to announce proposals for a change in the Hong Kong Constitution by which 'the inhabitants of the Terri-tory can be given a fuller and more responsible share in the manage-ment of their own affairs'.
It was significant that Sir Mark described Hong Kong as a territory, rather than a colony, as indicating the British Labm:r government's commitment to decolonialization that was to result the following year in the grant of independence to India, Pakistan and Burma. The suggestions for Hong Kong were not so dramatic: Sir Mark specified the transfer of 'important functions of government' to 'a Municipal council constituted on a fully representative basis'. This proposal became known as the 'Young Plan', although in fact Sir Mark was
THE GREATER EAST ASIA CO2-PROSPERITY SPHERE 435
transmitting a version of ideas drafted by a committee of the Colonial Office during the war. With the support of the Hong Kong taipans in the China As'iociation the committee had suggested a complete reorganization of the Municipal Council as a democratic institution, accompanied by an expansion of representation on the Legislative
Council.48
Before any conclusion was reached, the Governor asked for a full discussion among the community which might enable the proposals to be finalized before the end of the year. Comments were forthcoming in some quantity, enabling Sir Mark to sketch on 26 August what appeared to be a satisfactory consensus. This was to introduce direct elections for two-thirds of the Municipal Council seats, split equally between Chinese and non-Chinese constituencies, the remainder being appointed by representative bodies. Equal representation between officials and non-officials on the Legislative Council would leave the Governor holding the casting vote. The merit of concentrat-ing on the Municipal Council as a representative institution was that the franchise could be extenJed to all adults, British subjects or not, while voting for the Legislative Council must, it was considered, be restricted to British subjects, only a minority of the whole.
These proposals were promptly dispatched to London, where they ran into a sandbank of discussion and delay. There was little dissension in the House of Commons: Walter Fletcher, Conservative M.P. for Bury, in a debate on 16 May 1947, asked for the government to make 'quite certain that the status of Hong Kong and the leased territories remains quite openly and clearly where it is now, with no fore-shadowing of change for a long time to come'. This was followed on 29July by a rather confused discussion. Colonel David Rees-Williams, later Lord Ogmore, believed that 'the democratic element in China (however that might be defined) does not want to see Hong Kong handed over to the Kuomintang government', and lvor Bulmer-Thomas for the government announced that 'considerable progress has been made in introducing a stable regime in Hong Kong ... We have shaped a more democratic constitution, includin5 a municipality ... prepared a ten-year programme for economic growth, and taken all the necessary steps to obtain stability and economic growth.' 'Shaped' was a well-chosen word, giving the impression that consti-
'
tutional-reform was much further advanced than in reality it was.
�PgWalter Fletcher, for the opposition, agreed that 'we all now give agreat deal of adherence' to the principle of 'a greater degree of nativeg
436 A.2
HISTORY OF HONG KONG2
representation' (whatever 'native' might mean in the Hong Kong con-text), but pointed out that 'it is an extremely dangerous moment in Hong Kong to do such a thing', adding that there had been an influx of more than a million refugees.
Although the House of Commons was left with the impression that great things had been done in Hong Kong, it took nearly three years before detailed Bills could be produced. Woodrow Wyatt, then a Labour Member, asked on 30 November 1949, 'Why has it taken so incredibly long?' An embarrassed Arthur Creech Jones, now Colonial Secretary, had to admit that 'it was not possible, for a variety of reasons, to make much progress', and when pressed the following month _by another Labour Member: 'Does he not think it really necessary to have some form of democratic legislature, municipal or otherwise, in Hong Kong?' could only agree, but added that 'Making constitutions is not too easy or fast a procedure.'
One contributor to the delay had been the new Governor, Sir Alex-ander Grantham, who succeeded Sir Mark Young in July 1947. Sir Mark's health had been broken as a result of his treatment by the Japanese, but his personal qualities were to be missed. David MacDou-gall considered Grantham to be 'a competent enough civil servant', less inclined than Young to be 'adventurous or innovative', and lacking his predecessor's 'qualities of imagination and personality'.-But Gran-tham, 'a shrewd and deceptively dandyish figure', was something of a high-flyer -Sandhurst and Cambridge, a commission in the Hussars, the Imperial Defence College and the Colonial Service. Governor for ten years, the self-contained -and perhaps self-satisfied -Grantham ran Hong Kong without much interference from Whitehall during a difficult period. Having served as a cadet officer in the colony for thirteen years before the war, he had developed his own ideas of its future, which did not include the Young Plan; a benevolent autocracy, he considered, was needed, and this he provided.49
The proposals that eventually appeared before the Legislative Coun-cil dealt only with the Municipal Council and provided for a highlycomplex system of election, with the franchise being dependent on nationality, length of residence and literacy, resulting in a list of some ten thousand voters. No mention was made of any changes in the Legislative Council itself, a fact which immediately produced oppo-sition from those who thought that this must logically come first. The Legislative Council then produced suggestions for its own reform, which were debated in June 1949. These were introduced by Sir Man-
THE GREATER. EAST ASIA CO-PROSPERITY SPHERE 437
Kam Lo, who had become once again a leading figure in Hong Kong affairs. Sir Alexander Grantham described 'M.K.' as having 'a first-class brain, great moral courage and a capacity for digging down into details without getting lost in them ... when a complex but dull matter was being dealt with by the circulation of papers, on which members would write their opinions; I would look to see what "M.K." had written and, as often as not, save myself the tedium of reading all the;
50
other minutes. He was invariably right to the point. 'g
In the debate 'M.K.' isolated the prime difficulty of all constitutional reform in Hong Kong, which was that of race. The last available census of British subjects had been taken in 193 1, and had identified their racial backgrounds as follows:
Chinese 61,640 Europeans 6,636Eurasians 717Portuguese51 1,089Indians 3,33g1Others 453 Total 73,866
But this was a mere fraction, less than one-tenth, of the total population of Hong Kong, and therefore hopelessly unrepresentative. 'M.K.' con-cluded: 'To suggest that members elected by a fractional electorate can and will more adequately represent the Colony as a whole than nominated members is a proposition with which I profoundly disagree.'The Legislative Council agreed that its m.vn reorganization should take priority, and another set of proposals was dispatched to London for prolonged and lengthy consideration.
There were more honourable, and more powerful, reasons than those of the Hong Kong elite concerned to preserve their own power for the lack of progress towards democracy. Unlike other constituents of the British Empire, the people of Hong Kong could not be left to decide their own destiny: culturally, racially, economi.::ally, they were too deeply involved with the rest of China. Chiang's Nationalists had by no means given up their intention of reclaiming the colony. A dispute over the status of the Walled City, an open issue since 1899, at least to the Chinese, led to disturbances in which one man was killed, and a riot in Canton in which the British Consulate was burned down. Little sympathy was forthcoming from America. Driven by its
A HISTORY OF HONG KONG
belief in an evil Moscow-led Communist conspiracy, Washington con-tinued to send massive aid to the Nationalists, and to �Pfret about Hong Kong as a potential source of further trouble, best avoided, as the US Ambassador in London suggested in 1947, by 'graciously and generously' returning it to China 'at a given date'.
American opinion on the subject of China was confused. Roosevelt had insisted that after the war China should be regarded as a 'Great Power' and allotted a permanent seat on the Security Council of the United Nations, but post-war China was in turmoil, with Nationalists and Communists moving towards full-scale civil war. Each had their advocates in Washington, with those of Chiang being more successful in effecting military aid. Neither the efforts first of General Marshall, then of Ambassador Leighton Stuart, to reconcile the opposing forces were effective. Hong Kong was perceived only as an irritating source of conflict. In Chungking American Ambassador Clark told the British representative, Sir Ralph Stevenson, that 'He could expect that Hong Kong would remain a constant irritant in Anglo-Chinese relations . . . and I thought the British Government would wish to take into consideration whether the best interests of Britain lay in continuing the irritant or in removing it at some appropriate time. 'g52 AlthoughClark went on to say that Stevenson expressed his agreement, he can hardly have thought it likely that Britain would seriously consider negotiating with the discredited Nationalists, driven relentlessly from all their strongholds. Peking fell to the Communists in January 1949, Nanking in April, Shanghai the following month and Canton in October.
Hong Kong had already become a refuge for opponents of Chiang, as it was once more the only place in China where personal liberties were secured. Now a different set of refugees began to pour into the colony, swelling the population to an estimated 2,360,000 by March 1950.53 They came not only from Canton, but from further afield, and in particular the refugees from Shanghai brought valuable new talents to the colony. Abruptly Shanghai ceased to be the commercial centre of China, as those who had made it so left, businesse& closed, and an exodus to Hong Kong ensued. Such an influx, at a time when the colony was still hard put to replace the housing destroyed during the occupation, placed intolerable strains on the administration. With nowhere else to live many of the incomers made their homes in corri-dors, lofts and roadways, erecting shacks out of any available material. Previous refugees had tended to be anti-Kuomintang; the newcomers
THE GREATER EAST ASIA CO-PROSPERITY SPHERE 439
were usually, if not pro-Nationalist, firmly anti-Communist, which soon caused considerable friction. It was something of a relief to the colonial authorities, who wished to maintain the traditional policy of free access, when the Communists took the initiative by dosing the border in November 1949 ..
The Communist triumph aroused only moderate consternation in Whitehall; the Kuomintang had elicited no confidence at all, and the Communists were generally accepted to be much more effective. The new regime did however present a potential threat to British interests. Particular patriotic emotions were aroused by the attack on the gunboat Amethyst, which was trapped by the People's Liberation Army on the Yangtse in April 1949, and her subsequent dramatic escape. Speaking in the House of Commons on 5 May 1949 Harold Macmillan, then a member of the Conservative opposition, insisted that Hong Kong was the 'Gibraltar of the East', and must be held. It would have been difficult for him to explain why. Gibraltar was a strategically significant station on the route to the Suez Canal, which could still, even after Indian independence, be regarded as a vital waterway. Hong Kong led nowhere and defended nothing. The Labour Minister of Defence,
A.V. Alexander, replied that 'Hong Kong has long had a tradition ofneutrality and non-interference with the politics of China ... stepshavt:: been taken ... to deal with any breach of the conditions underwhich Chinese nationals, either Kuomintang or communist, areallowed to reside there.' Police forces had been doubled in strengthsince 1941, and two brigade groups had been dispatched to reinforcethe garrison. This last was meant as a warning gesture to China'snew regime that Britain took the future of Hong Kong seriously; asGrantham later explained, the policy was that sufficient forces couldbe deployed to delay any advance for long enough to enable diplomaticpressures to be employed. The later experience of the Korean warexemplified both how valuable such a delaying action might be andthat a small British force could defend a position against a much largerChinese attack.
It was left to John Paton, M.P. for Norwich, a labour pioneer and one of the old Independent Labour Party, to enunciate the principle which was to guide all subsequent British governments: 'Do not any honourable Member imagine for a moment that we can maintain our positimrin Hong Kong indefinitely against an actively hostile Commu-nist China. If we begin to think in those terms we shall inevitably lose Hong Kong.' Paton was supported by Woodrow Wyatt (somewhat
44�X A' HISTORY OF HONG KONG
ironically, in view of Lord Wyatt's later move to the right), who pointed out that Mao Tse-tung, who would certainly win the civil war, was of a different calibre from the Russians and no Stalinist, bent on territorial expansion. Some creative suggestions were made that the leased terri-tories could be extended or -last example of that nineteenth-century yearning for something better than the 'barren island' -that Hong Kong might be exchanged for Formosa.
The following year the post-war Labour landslide was nearly over-turned in a general election, leaving Attlee's government with a major-ity of only six. When in October 1951 Labour was replaced by the Conservatives under Churchill, enthusiasm for decolonization notice-ably subsided. Nevertheless, the newly appointed Colonial Secretary, Oliver Lyttelton, put the modified Young Plan to the Cabinet on 16 May 1952, with Grantham's backing, minuting that:
Constitutional reform in Hong Kong was promised after the war and has been under discussion since 1946. When I visited Hong Kong in December the Governor represented to me ... the fact that there had been no progress towards reform was beginning to lead to agitation, that he would find it increasingly difficult to hold the position much longer.
He blamed the Foreign Office for the delay:
These proposals were agreed on as long ago as the end of 1950, but were postponed at the request of the Foreign Office, on the grounds that, since they did not provide for a wide Chinese fran-chise, they might provoke a propaganda campaign.
But now all the Departments of State were agreed:
The matter was taken up with the Foreign Office, the Common-wealth Relations Office, the Ministry of Defence ... all agreed that the time had comc.54
But before the new arrangements were made public, the Governor was visited by a delegation of the most prominent members of both Councils with a plea that he should 'stop this madness which will be the ruination of Hong Kong'. They argued that there was 'no real demand whatever' for extended representation, which had been
THE GREATER EAST ASIA CO-PROSPERITY SPHERE 441
pressed by 'a doctrinaire Colonial Office'. In spite of having told the Colonial Secretary only a few months before that the 'agitation' for reform was such that he would find it 'increasingly difficult to hold the position', Grantham accepted their proposals that the project should be dropped. When this was put to the Colonial Office the officials were aghast: 'They held up their hands in horror and said "But Grantham, your proposals have already been approved by the Cabinet."m' Lyttelton,however, had no objection to telling his colleagues that he had changed his mind, and minuted: 'I regret having to trouble the Cabinet again ... (having discussed with the Governor) I do not propose to proceed with these reforms until conditions are more senled.'
In his autobiography Sir Alexander wrote only that the Secretary of State agreed to drop constitutional reform because 'the matter did not interest the British electorate'. In an unpublished radio interview in 1968 he was more direct and much more revealing: Lyttelton was 'quite willing to tum down the proposals because all any British govern-ment was interested in was getting back into power, and the electorate of Britain didn't care a brass farthing about Hong Kong'.55 That was true in 1951, and has continued to be so.
It has often been suggested that the quiet burial of the Young Plan marked the last chance to implement a measure of democracy in Hong Kong's government without risking Chinese intervention. On the other hand, it is possible that the restricted franchise proposed, which iso-lated so much of the population from any political power, would have become an entrenched and powerful force operating against anyfurther reform.
BETWEEN FOUR STOOLS
Anglo-Saxon attitudes
Post-war Governors of Hong Kong and their colleagues found them-selves surrounded and embattled. The governments of the People's Republic of China (Beijing) and the Republic of China (Taiwan) both considered Hong Kong rightfully part of their own territory, but set their claims aside while using the colony as a convenient location for espionage, agitation and propaganda one against th'e other. The government of the USA, wrath against the People's Republic of China and wholly supporting the Republic of China, made free use of the espionage facilities, while gravely damaging the colony's economy in the interests of its crusade against Communism. The government of Great Britain, nominal masters of Hong Kong, were content to let things take their course as long as neither the People's Republic of China (too important politically), nor the USA (essential economically), was offended. The interests of the people of Hong Kong were not much considered by any of these powers, but were reasonably well looked after, according to its own lights, by the colonial administration.
Both Britain and the USA showed themselves to be slow learners in post-war Asia. On 15 August 1947 India and Pakistan became independent; the strategic consequences of this hardly began to be reflected in British foreign policy for another twenty years, and even today have not been fully appreciated, in that British governments still cling to the concept of Great Britain as a world power. In January 1949 the People's Republic under Mao Tse-tung was established in Peking -henceforward Beijing -and the Nationalists were shortly
BETWEEN FOUR STOOLS
afterwards confined to the island of Formosa -now to be known as Taiwan, where they ruthlessly established an authoritarian regime. It also took twenty years for American policy to accept that this did not constitute the government of China. Both these long-continued misconceptions had their effects on Hong Kong.
The emotional American support that had sustained Chiang Kai-shek's Nationalists during the civil war was reinforced by their defeat. It seemed that nothing could persuade American opinion that Chiang, assisted by his wife and her predatory family, was the corrupt and incompetent leader of a faction that had miserably failed the Chinese people, and filched hundreds of millions of dollars' worth of American public money. Taiwan, and the offshore islands ofmQuemoy and Matsu, became in American mythology beleaguered outposts of democratic decency in a wicked, Communist-dominated East. Even with evidence of massive misappropriation before it, the Truman administration was reluctant to criticize what was well known to be, in Taipei as it had been in Chungking and Shanghai, a corrupt and dictatorial regime. This is even more astonishing in view of the open support given to the Republican Party by Chiang's representatives: Truman's opponent in the 1948 presidential election, Thomas Dewey, was awarded the Special Cravat of the Order of the Auspicious Star in anticipation of his victory.
The rising tide of McCarthyite hysteria made it impossible for saner minds to question the Chiang myth; when the 'China hands' in and around the State Department came to the conclusion that 'Chiang Kai-shek and his evanescent, predatory and combat-resistant armies were not on the wave of the future', they were 'called severely to account by John Foster Dulles and McCarthyites on Capitol Hill'. Barbara Tuchman concluded that the 'attacks and savagery of that "tawdry reign of terror" [that] raged over America's China policy ...mcowed the future exercise of independent judgement in the Foreign Service'.1
For some time, it must be allowed, the issues were blurred. The People's Republic had to establish what might be generally admitted as the legitimate boundaries of its interests. The United Nations action in Korea, the British operations in Malaya, the de facto acceptance of the territorial integrity of Taiwan, the scuffle with India on the Ladakh borders, the definition of relations with the USSR and the re: establishment (to put it civilly) of suzerainty over Tibet were all neces-sary preliminaries. After these had been settled, which they were by
444 A HISTORY OF HONG KONG
1962, whatever grievances remained -alt.liough they were many -hardly affected strategic decisions in any but the longer terms. China had regained what could be regarded as her historic boundaries, with the major exceptions of Taiwan and Hong Kong, and was willing to �Ptallow negotiations for the restoration of these to take their courset
without more pressure.t
It took some years before the dust settled. As the People's Liberationt
Army moved south to Canton in October 1949 -encountering littlet
resistance, it being accepted that the mandate of heaven had descendedt
to the new regime -the British Labour government signalled its deter-
mination to hold Hong Kong by reinforcing the garrison to a strengtht
sufficient to make the issue of a forcible take-over highly doubtful.t
Ernest Bevin, the rugged Labour Foreign Secretary, as hostile to Com-
munism as few outside the right wing of his Party can be, promisedt
to make Hong Kong 'the Berlin of the Middle East'. Thirty thousandt
troops, with armour and air support, including that of a carrier group,t
should have been sufficient to stop dead any advance by the People'st
Liberation Army.t
Britain had already indicated a firm intention to protect the newt
Federation of Malaysia from aggressive infiltration, and would havet
been even more unyielding in the protection of Hong Kong. Thet
Cabinet agreed that 'Until conditions change, we intend to remain int
Hong Kong,' although when appropriate 'we should be prepared tot
discuss the future of Hong Kong with a friendly [the word 'democratic't
was in the draft, but was wisely deleted] and stable Government of at
unified China'. Not that the new government in Beijing had any wisht
to invade; as Peng Zhen, who later attempted to halt the madness oft
the Cultural Revolution, but was then very much a hard-liner, wrotet
at the time, 'It is unwise of us to deal with the problem of Hong Kongt
rashly and without preparation.'2 With only a few gestures of defiancet
from units of the People's Liberation Army, the existing boundariest
were confirmed.t
Relations between Hong Kong and Beijing were tolerably politet
(those with Canton were more acerbic), apart from a short time int
1952 when something of a mutual propaganda war ensued. Two seri-
ous incidents occurred, a navy patrol boat being shelled and a civiliant
airliner shot down by Chinese forces, both with loss of life, but theset
were hardly more than might have been expected as the penalties fort
having as a neighbour a great, newly revolutionary and powerful state.t
A modus vivendi was established, for Hong Kong was too valuable tot
B.ETWEEN FOUR STOOLSo
China, earning nearly half the country's total foreign income, and trade with China was essential to the colony.
Before this happened the refugee population had swollen to some-thing like three million. (The preferred term was 'squatter','refugee'implying that the people in question were fleeing an unpleasant con-dition, and were a responsibility of the host; this was both insulting to the People's Republic of China and expensively inconvenient for Hong Kong.) The inrush of newcomers, which quadrupled Hong Kong's population in a few years, swamped all available facilities and posed huge problems for a colonial administration fully engaged in post-war reconstruction and harassed by external pressures. 'Squatters', it was understood, were there on sufferance, and little obligation to provide anything more than the essential minimum for them was accepted by the Hong Kong authorities. Denis Bray, one of the last cadet officers, who joined the Hong Kong government in 1950, related his experience in the 1991 Hong Kong Annual Report: 'I had to manage the screening of squatters cleared for development when all they were offered as resettlement was four pegs in the ground marking a plot where they could build. Gradually a little government money was found to do some site formation, to provide stand pipes, to pave paths, to do a good deal but not to provide housing. '3 Most of the newcomers were apolitical, relieved to be alive and anxious only to be left alone; insofar as they manifested an interest in politics it was likely to be unsympa-thetic to the Communists they were attempting to avoid. Leftists, as Communist sympathizers were generally termed, were usuallyrestrained; it was the extreme Nationalist supporters who presented a more acute threat to the tranquillity of the colony.
Very soon after liberation in 1945, Nationalist agitators had started coming to the colony, and cautious support was offered to them by
T.W. Kwok, an official of the Kuomintang government seconded as 'Special Commissioner for Hong Kong', a title that reflected the Nationalist claim to sovereignty. Nationalist papers in Hong Kong consistently reinforced this by calling for speedy restoration of the colony to the Taiwan government. At least one nasty incident had taken place in 1948 when the Chinese magistrate over the border declared the Walled City of Kowloon to be Chinese territory, precipit-ating demonstrations. The police sent in to the area opened fire, killing. one man and wounding a number of other residents; in the wave of retaliations the British Consulate in Canton was burnt down.
After the Communist success forced a change of tack, the Hong
A HISTORY OF HONG KONG
Kong supporters of Chiang Kai-shek turned their energies towards attacking the Beijing government and coercing the�PBritish by terrorism within the colony. Within the British community there were differences of opinion as to which of the opposing parties was more dangerous. Bishop Ronald Hall, a moderately left-wing prelate, clashed with the conservative Grantham and his 'comic opera government' more than once over the Bishop's Workers' Schools -'completely communist-dominated and centres of communist and anti-British indoctrination', according to the Governor.4 It took American pressure on behalf of the other side, exerted in the clumsiest of fashions, to prove that it was the Nationalist element in Hong Kong that stood more in need of government vigilance than Bishop Hall's schools.
While the Hong Kong administration did not share the American admiration for Chiang Kai-shek, although at the same time not beingt�P enthusiastic about the Communists, most people in Hong Kong had not initially been averse to the new government in China, believing that almost any change from the Kuomintang would be for the better. London agreed; after some hesitation, and following the established pragmatic principle of recognizing any government in obvious control of its territory, Britain was among the first, in January 1950, to offer recognition to the new regime in Beijing. Since Britain continued also to acknowledge the legitimacy of Taiwan, it was many years before relations were formalized by an exchange of ambassadors, but the China Hong Kong had to deal with was now the People's Republic. Since Beijing refused to agree that Hong Kong was anything other than an integral part of China, temporarily under foreign administration, it was impossible to have direct diplomatic links between the two; the dilemma was solved by entrusting Chinese interests to Xinhua (Hsin Hua), the New China News Agency, which operated from the Bank of China building, ostensibly as a news agency but in fact, and quite openly, as the representative of the People's Republic.
None of this was at all to the liking of the United States, still commit-ted to the support of the Kuomintang, and bitter criticisms of British weakness towards Communism were forthcoming. American subjects were advised to leave the colony, and some American companies closed shop. A rapprochement between the wartime allies was achieved in June 1950 when the Labour government, enthusiastically supported by Churchill, followed the United States' lead in opposing the North Korean invasion of the south, but British and American attitudes to the Chinese participation, on the side of the North, in the war that
B'ETWEEN FOUR STOOLS
followed were markedly different. Prime Minister Attlee may not have needed to rush to Washington ih December 1950 in order to dissuade President Truman from attacking China, but General MacArthur, and a considerable section of American opinion, was willing, even eager,to do so. The use of atomic weapons was much canvassed, and the unlikely theory of a Communist plot led by China and Russia working together to subdue the 'free world' was unquestioningly accepted by many Americans. British governments, Conservative or Labour, worked on the differing assumption that Chinese Communism had to be distinguished from Russian imperialism, and that China must not be driven into the arms of Russia.
In such conditions the advantage to the USA of having a co-operative listening post on the borders of China was manifest, and was taken full advantage of. The staff of the US Consulate in Hong Kong suddenly, and not at all mysteriously, multiplied, to the embarrassment of the colonial government. In 1938 there had been a Consul-General, two Consuls, and two Vice-Consuls: in 1953 there were 115 in all, including four Consuls and twenty Vice-Consuls, to administer the affairs of an American community of 1,262 -including themselves. Sir Alexander Grantham was, once more, less discreet in his 1968 radio interview than in his autobiography: 'I took a poor view of it [the consulate] -the largest anywhere in the world', with a staff 'at enmity with the lawful government of mainland China'. The CIA especially were 'extremely ham-handed at one time until we had to take a verystrong line to stop them being so stupid'.5
Thomas Dewey, who visited Hong Kong at that time, had trouble understanding how liberal a British colonial government's 'strict adher-ence to the rules of free speech' could be: 'The British are a serious handicap to our intelligence ... [they] thwart efforts hostile to Red China, which include American efforts at espionage.' Dewey was also shocked to find that Reuters news agency, unimpeded by US pressure, sent out items that had been suppressed by Associated Press, their American counterpart, who 'never sent out that kind of news' (race riots, in this instance) 'to countries where it would do us such damage'. Was such an injudicious attachment to personal freedom, Dewey wondered, 'playing cricket or Russian roulette?' But Dewey was comforted to hear that the battle against Communism was being waged by more reliable allies than Britain when the French General de Lattre de Tassigny assuredhim that 'We are winning in lndo-China against Ho Chi-minh. '6
Another cause of Anglo-American friction at this time was the
A HISTORY OF HONG KONG
great aeroplane affair.7 Most of the assets of the. two government-owned Chinese airlines, including eighty-three passenger planes, had been transferred to Hong Kong away from the civil war on the main-land. These were without doubt the legal property of the Chinese government: but which government? Britain had not at that time -theend of I949 -yet recognized the Communist regime in Beijing, but was appearing likely to do so. Claire Chennault and Whiting Willauer, the founders of China Air Transport (CAT), an American-owned company closely associated with the CIA, believed it essential to keep the planes from Communist China, since they might be used for an air attack on the Nationalists in Formosa. In an effort to do this a series of companies was formed, beginning in Panama and ending in Delaware with Civil Air Transport Inc. (CATI). CATI, it was planned, would purchase the aircraft from the Nationalist government, thus creating afait accompli. This scheme was put into effect, but the Hong Kong government had to be persuaded of its legitimacy before it wouldprohibit the transfer of the planes to the People's Republic. This was indeed already happening, since twelve of the aircraft, and the general managers of the airlines, had already taken off for Beijing. Grantham was accordingly visited on 4 January 1950 by two hard men, 'Big Bill' Donovan, formerly chief of the Office of Strategic�P Services, and Richard Heppner, his former man in China. Donovan metaphorically thumped the table and demanded that the aircraft be handed over to him without further ado, adding that if it had not been for the United States Britain would have lost the war, and threatening adverse conse-quences for Sir Alexander personally if he did not co-operate. This was not the wisest of approaches; the Governor naturally refused to concede anything, and also denied the American inspectors accom-panying Donovan access to the planes.
When, the very next morning, it was announced that Britain had decided to recognize the Communist government, the feathers began to fly. The case was brought before the Hong Kong courts, where itwas decided that the aircraft were indeed the lawful property of the People's Republic of China. Washington threatened t:conomic action against Britain, Beijing refused to re-establish full diplomatic relations with Britain, and Nationalist agents in Hong Kong bombed seven of the remaining planes. American pressure proved the more successful, and the British government, while refusing to overturn the verdict of the Hong Kong court (as indeed it could not lawfully do), instructed Grantham to hold the aircraft until _'the full processes of the law' had
BETWEEN FOUR STOOLS
been exhausted. The Governor was dismayed: 'Who was I, a mere Governor of a colonial dependency, to complain, and what good would it have done if I had? Nonetheless I felt unhappy: altogether a sorrybusiness.' Grantham had become a skilled fence-sitter, however, and the US Consul-General iri Hong Kong was able to tell the State Deparnnent that the Governor had assured him that the aircraft 'would not be permitted to leave Hong Kong for the mainland regardless of the outcome of the case'. 8
It took more than two years for the outcome to emerge, in July 1952, when the Judicial Committee of the Privy Council agreed that the aircraft were the rightful property of Chennault's company. Legally the decision was dubious, but the former Attorney-General, Sir Hartley Shawcross, put the case brutally plainly. It was a question of 'whether the Government's action should be directed to placating the United States or the Chinese People's government'. For Chennault it was a Pyrrhic victory, since not only were the aircraft by that time unflyable, but the British government insisted that they must under no circumstances be transferred to Formosa. CATI was therefore left with some expensive aircraft to remove from Hong Kong, and had to appeal to the United States Navy to lend them an aircraft carrier to do so. Sir Alexander had to suffer another rebuff from his own side the following year, when he was ordered by London, over his unavailing protests, to allow a Chinese tanker to be requisitioned by the Tai-wanese government; as he said, the British government 'was more scared of what the United States might do to Britain than of what China might do to Hong Kong'.9
This was not the last of Grantham's difficulties with aeroplanes.
Under mysterious circumstances -all trace has been removed from the records available to the public -a Chinese Nationalist warplane landed in Hong Kong in 1955. It took a year for the British government to decide what to do about it. It seems that Grantham, in the interests of a quiet life, had agreed with the Colonial Secretary, Alan Lennox-Boyd, with whom he was on friendly terms, to hand plane and pilot back to Taiwan, with suitable complaints about 'this abuse of Hong Kong's facilities'. This decision was queried on 13 March 1956 by the Prime Minister, Anthony Eden, who was 'doubtful whether it was necessary that special steps be taken to return this aircraft, which would certainly annoy the communists', but Lennox-Boyd managed to convince the Cabinet that 'The Governor would prefer to be finally rid of this embarrassment.'10
45�X A HISTORY OF HONG KONG
Something peculiar was certainly going on between Britain and the United States at that time. The Republican General Eisenhower had become the President in 1953, thereby ensuring that the anti-Communist China lobby's influence would continue undiminished. John Foster Dulles, the Secretary of State, was implacably opposed to Communist China and angry with what he believed to be British unhelpfulness in South-East Asia, while his successor, Dean Rusk, is said to have believf!d that the People's Republic of China hardly existed; 'China was not a separate entity; it was, he asserted, "a Soviet Manchukuo" without any of the effective attributes of sovereignty':11 a view appropriate only to that world of fantasy in which American foreign policy wandered for many yP-ars. In December 1953 Eisen-hower was seriously considering the use of atomic weapons should the Korean truce be broken, since he did not recognize a distinction between atomic and conventional weapons. Churchill, who in 1951 had returned as Prime Minister, took some pains to dissuade the President from this course, and to withdraw his draft statement that the USA was 'free to use the atomic bomb'.12
But Britain was poorly placed to change American political attitudes; Churchill's Conservative government had followed much ofits Labour predecessor's foreign policy, but not without internal dissent. Con-siderable heat had been generated by the then Foreign SecretarJ Anthony Eden's desire to see the People's Republic take up the China seat in the United Nations. Churchill objected violently to this, to the extent of a 'blood row' between the two men (on 4 July 1954).13 The dispute between the Prime Minister and the Foreign Secretary was resolved, and it was agreed that 'A way ought certainly to be found of bringing Red China into the United Nations on terms tolerable to the USA.' This could not happen quickly, since Britain urgently needed American assistance in the Middle East, particularly after the Suez debacle of 1956, a piece of international policy described even by Churchill, who had by then stood down as Prime Minister, as 'the most ill-conceived and ill-executed imaginable', and 'a great error'.14 From the sidelines, Churchill did his best to assist a reconciliation with America, but the subsequent fence-mending operations were the responsibility of the new Prime Minister, Harold Macmillan, and the Foreign Secretary, Selwyn Lloyd, who met Eisenhower in October 1957. In the course of their discussions the President offered to assume some responsibility for the security of Hong Kong in return for Britain withdrawing support for China. This proposal was immediately agreed
BETWEEN FOUR STOOLS
in a letter of 25 October 1957 from Selwyn Lloyd: 'The presentgovernment of the United Kingdom will not seek or support, without prior agreement with the US government, any change in regard to the representation of China in the United Nations, its dependent agencies and other international organizations in which this question mayarise.'
Macmillan made the quid pro quo clear in the draft of his memoirs, recording that 'as part of the deal' he had agreed 'not to press for admission of the Communist Chinese to the United Nations ... In return, the US agreed to regard Hong Kong as a joint defence prob-lem.' This major abdication of responsibility for an important piece of foreign policy was wisely kept secret: when the Cabinet Secretary saw Macmillan's draft he asked for the information to be removed, and Selwyn Lloyd's letter is only available by virtue of the US Freedom of Information Act. 15
While its future was being thus subsumed under greater inter-national issues, Hong Kong was being seriously embarrassed by the embargoes on its trade with the People's Republic, imposed during the Korean war, which were pinching the colony's economy badly. The government review of 195m1 described the year as one of difficulty and depression, in which events had 'put Hong Kong in an economi-cally impossible position'. There were two embargoes, one on strategic goods imposed by the United Nations, and a total embargo by the United States on trade of any kind with China. Since the Communist take-over had led to the ejection of foreign firms from the old treaty ports, the greater part of international trade had passed through Hong Kong. These embargoes, which cut this trade down to 'a mere trickle', in Grantham's phrase, were gravely damaging. It was, as Lord Elibank, a veteran of the punitive expedition against the Boxers, put it, as though 'you were to give [a man] a knife and tell him that it was in his interests to go and cut his own throat'.
A corps of American inspectors was added to the already swollen Consular staff in order to ensure that nothing of Chinese origin found its way, even indirectly, onto the free soil of the Uni!ed States. The colonial authorities had to attempt to prove the ideological purity of their exports to the satisfaction of the American embargo inspectors; shrimps, for example, might be caught in the admissible waters of Hong Kong, but had the crustaceans begun their lives there, or were they Communist infiltrators? In the absence of unequivocal evidence all shrimps, therefore, were banned. Ducks presented a similar diffi-
A HISTORY OF HONG KONG
culty. They might well be hatched, live and meet their ends in the colony, but were the eggs they came from true-blue? �P
General MacArthur himself intervened to complain that, under the other embargo, militarily important goods were finding their way to China, as was shown in Hong Kong's returns of trade. For the British government the Attorney-General, Sir Hartley Shawcross, pointed out that the quantity of such items listed was 'nil', and that the only thing that might be objected to was hardly of strategic importance -a single camera. He added that while Hong Kong's trade with China was being sharply reduced, Japanese trade with that country had increased from half a million dollars a month in the first half of 1950 to $3 million in the final quarter; and that Japan was at the time being governed by General MacArthur. Smugglers too responded to the challenge posed by the restrictions, doubtless fortified, as during the period before the war, by the thought of combining patriotism with profit. Their profits had to be shared with the Revenue Department, in order that unseemly brawls should be avoided; Sir Alexander explained that one popular method was for smuggler and Revenue officer to agree that the latter 'at a certain time ... should be at point B. The smuggler would then slip through somewhere near point A.'16
Although post-war recovery was rendered more difficult by the restrictions on trade, the embargoes did have one significant beneficial effect in that as the entrepot trade dwindled, manufacturing industries developed. Leading this movement were those Shanghai entrepreneurs either discouraged by the inefficiency and corruption of the Kuomin-tang, or later driven from the city by the Communist advance. They had a high opinion of themselves as 'more intelligent, efficient, flexible and generous than the Cantonese', whom they regarded as 'uncouth provincials'. Shanghai business had always been more international than that of Hong Kong, which was tied more closely to British apron strings, and Dick Wilson, editor of the Far Eastern Economic Review, considers that 'the economic impact of the Shanghai industrialists was decisive', and that the Hong Kong government conceded that the colony had a ten-to fifteen-year start over the rest of -\sia, due to the 'injection of Shanghai experience and capital'.17
The newcomers' interests included film-making (Sir Run-Run Shaw), the great textile families of Tang, Lee and Wong, and the shipping concerns of Y.K. Pao, C.Y. Tung and T.Y. Chao. Shang-hainese also became prominent in the civil service and politics; Lydia, Lady Dunn, became a senior Hong Kong politician, a member of both
BETWEEN FOUR STOOLS
Legislative and Executive Councils and of the House of Lords. Although many of this community had been forced to quit Shanghai with very little of their wealth intact, others, especially those with machinery ordered and paid for but not yet delivered -including both
C.C.colonLee and P.Y. Tang y. As a result, by 19 -were able to divert their resources to theg
55 the government could speak of 'the rapidemergence of Hong Kong as an industrial producer'. At first activitywas heavily concentrated in the textile sector, which by 1962 hadreached over �Gi oo million, or 52 per cent of all exports. Diversificationinto other industries, including artificial flowers, but also basic elec-tronics, began thenceforward to increase.
One result of the embargoes had been considerable capital losses as large stocks of goods became virtually unsaleable, and had to be disposed of at great loss. Traders were assisted in surviving this blow by the policy of the Hongkong and Shanghai Bank. G.M. Sayer, Chief manager between 1972 and 1977, described the changing attitudes of the Bank: until 1950 there had been little direct contact between Bank officials -almost all Europe:ms -and their Chinese customers. All such business went through the compradore; only in Shanghai, where 'people were generally more sophisticated and better educated and so on, and certainly more commercially knowledgeable', had there been dealings between the Bank and its customers without the compradore acting as intermediary. This personal knowledge, combined with their experience of Hong Kong conditions, enabled the management to cover shortfalls, and to make further advances for new buildings and equipment. It was not lost on Hong Kong businessmen that, in spite of manifold difficulties, recovery in the colony moved more rapidly than in the mother country, where all forms of credit continued to be bureaucratically regulated for many years. Hong Kong also enjoyed the valuable freedom of being able to make purchases in US dollars, while in the UK currency restrictions continued for as long as thirty-
18
five years after the end of the war .
The Korean war ended in 1953, and when Malayan independence was established in 1957, British strategic interests in the Far East were almost at an end. Some help was given to repel Indonesian infiltration in Borneo, but Britain steered clear of the major trouble centre in Asia, Indo-China. This withdrawal was signalled in Hong Kong first by the reduction of the garrison to a level compatible only with the maintenance of internal security, and later, in 1958, by the closure of the naval dockyard. From that date Hong Kong was an appendage,
A HISTORY OF HONG KONG
one without any strategic significance, and from which decreasing com-mercial advantage was to be expected. British Parliamentary interest was minimal, and British public interest in Hong Kong, except as an exotic spot for expensive holidays, somewhat less.
From 1951 to 1964 Conservative governments were in office in Britain, and following the established policy towards Hong Kong, one of benign neglect. When Oliver Lyttelton visited the colony, the first Colonial Secretary to do so while in office, he knew what to avoid noticing, and therefore found life there very agreeable. Grantham was 'one of the ablest and most successful of all colonial governors ...cLady Grantham, a charming American, had lavished exquisite ta.te upon Government House ... the scarlet liveries of the Chinese ser-vants, curtains, carpets, furniture, flowers and food all showed what discernment and discrimination can do.'19 There was mild admiration for the colonial authorities' handling of economic problems, which did not go so far as to stimulate much in the way of assistance. On the contrary, inessential expenditure, as on the 4,700 jobs in the dockyard, was to be rigorously pruned. Nor did the Labour opposition offer much challenge on behalf of the colony. When Lancashire Members, whose constituencies included textile producers, complained about the increasing competition from Hong Kong industries, they were told by the Conservative government that 'Hong Kong wages are nearer to West European standards than the latter are to American' -implying, with some justification, that British manufacturers should stop moaning and step up their own exports to the USA. Questions on the progress of democratization in Hong Kong -which, following the quiet funeral of the Young Plan, was non-existent -were pressed only by the ten-acious John Rankin, one of the Glasgow Labour Members.
Members showed immediate interest only when the larger question of relations with China appeared to be involved. The first of these occasions was the aftermath of a fire in the Tung Tau squatter camp, when some ten thousand people were made homeless. The only rem-edy the Hong Kong administration could provide was to move them to another makeshift collection of huts, thereby contributing a propa-ganda opportunity to the new Canton government. A 'comfort mission' from Canton was proposed, 'the outcome of which', Sir Alexander believed, 'was not difficult to foresee ... fiery speeches would have been made against the "imperialists", aid would have been promised from "Mother China" ... Rioting would have broken out.'20 Although the mission was banned from coming, the riots duly ensued in March
0
BETWEEN FOUR STOOLS
1952, and one person was killed. This fact was not revealed to the House of Commons, who were told that only one round had been fired from a shotgun, and that twelve people had sustained minor injuries.
The colonial authorities' .attitude towards refugees was likened to that of a railway station's employees towards the passengers; their responsibility was to look a_fter the permanent staff, and not 'to shower benefits on passengers merely passing through'. They were prepared to let the 'squatters' in, but thereafter they had to look after themselves. This attitude only began to change after an even more disastrous fire in the squatter camp at Shek Kip Mei, on Christmas Day 1953, when more than fifty thousand people lost what primitive shelter they had. A momentous decision was then forced upon the Hong Kong govern-ment; Denis Bray described what happened:
It was not until a meeting at six o'clock in the morning of Boxing Day in 1953 that Sir Alexander Grantham took the decision to put the government into housing ...
The resettlement programme of the fifties was not a housing programme for the poor. It was a means to clear land for develop-ment. You could not apply for a resettlement flat. You were offered one if your hut was about to be pulled down. What you were offered was a concrete box allowing twenty-four square feet a head, in a seven-storey structure with no lifts, no windows but wooden shutters, no water, but access to communal kitchens and bathrooms. If this sounds dreadful, it was, but such was the alternative that people fought to get into the new blocks where you had your own place legally -and it would not burn down.21
By the end of 1956, 630 acres had been developed for resettlement, and 23,300 tenement rooms and 13,800 cottages built which would have -somehow -to accommodate two hundred thousand people, allowing each a space equivalent to less than that occupied by a double bed. It was the beginning of a creditable effort, the more remarkable since it was initiated from the colony's own resources, supplemented by some help from America and China. From the Mother Country Hong Kong received 'lots of nice verbal comment, praise from HMG, but nothing in the way of cash, nothing at all'. Only when the United States provided a grant was the Colonial Office shamed into matching it. Previously Grantham's appeals for help with rehousing had received
A HISTORY OF HONG KONG
even shorter shrift from Whitehall: 'I requested financial assistance from H.M.G. I begged, I pleaded, I wrote despatches, I wrote letters, I spoke to officials, I spoke to ministers. But all in vain, we got noth-ing.'22 Hong Kong was, as it always had been, only deemed worthy of attention when some disaster had occurred or when one of Britain's own interests was concerned.
It was extraordinary that for more than ten years after the war, there was no serious trouble in Hong Kong apart from sporadic terrorism from Nationalist agents. More than two million refugees from China had poured into the colony, and received only the most basic support. Some were given temporary accommodation, and all were given access to food and water, but apart from that they were left, until the Shek Kip Mei fire, largely to their own devices. Many of the refugees were profoundly uninterested in politics, but active Nationalist supporters were a small minority, as were active Communists. The government had to avoid causes of tension between these two passionately antagon-istic communities, and succeeded tolerably well in doing so. There was a strike on the tramways at Christmas 1949, encouraged by Canton, which looked as if it might have turned into a replay of 1922. The strikers left for Canton, where they were given a big reception; but that was all. No funds were offered, and the strikers were left stuck in Canton, unable to return to Hong Kong. Grantham considered that the strike was 'an eye-opener for potential trouble makers. It showed that the government was master in its own house.'
One of the few occasions on which Hong Kong was mentioned in the House of Commons was by the Prime Minister, Winston Churchill, on 24 March 1955, in one of his last Parliamentary statements before his resignation on 5 April. An account of the conversations held at Yalta in 1945 had just been published, which recorded President Roosevelt's desire that Hong Kong should be returned speedily to China. Sir Ian Horobin, Conservative M.P. for Oldham, the constituency which had given Churchill his first seat in the House fifty-five years before, asked if 'Her Majesty's Government are resolved to maintain their position in Hong Kong?' He received the Churchillian assurar.ce that this was so, and that 'According to the record President Roosevelt said he knew I would have strong objections to this. That is certainly correct and even an understatement.'
Sir Alexander Grantham conducted Hong Kong affairs with smooth aplomb and the minimum of interference from London, and it was not until 1956 that real trouble erupted, on 10 October, the 'double
BETWEEN FOUR STOOLS
ten', the anniversary of the 191 I October revolution which brought about the downfall of the Ch'ing. This was the most important Nation-alist festival, and the disturbances started when an officious resettle-ment officer ordered some Nationalist flags to be removed. Mobs spread from the settlements to Kowloon, looting shops and attacking property known to belong to Communist sympathizers. Hoping that the disorder would die out with the festival, the authoritie.s refrained from firm intervention, but by the next day a full-scale riot had developed. The Communist areas were the main targets of Nationalist attack, the most violent incidents taking place in the satellite town of Tsuen Wan, five miles away from central Kowloon on the other side of the container port. A mob stormed a clinic and welfare centre, killing four and ransacking the premises. Prisoners were taken to the Nationalist headquarters and badly knocked about. Communist-owned factories were attacked, the workers forced to kowtow and shout Nationalist slogans, and some were brutally killed. Foreigners were not especially singled out for attack, but a number inevitably became involved, the worst case being. in Kowloon when a car was fired and a passenger, the Swiss Consul's wife, burnt to death. Most casualties, however, were incurred in the battles in Tsuen Wan between National-ists and Communists. 23
Decisive action was then taken, the armoured cars of the 7th Hussars being brought in to reinforce the police, who were instructed to fire 'without hesitation'. Communists were given sanctuary in the police compounds, and by the twelfth the riots had subsided, leaving fifty-nine dead -forty-four as a result of police action, and fifteen killed by the rioters. Of those rioters killed, thirteen had police records, and there is no doubt that under cover of the disturbance a lot of old scores were settled and opportunities for looting made the most of. In the subsequent trials four people were convicted of murder and sentenced to death.
The short adjournment debate on the riots on 8 November 1956 was opened by John Rankin M.P. This inquiry into an extremely seri-ous and violent episode in a British colony lasted for thirty minutes, and its conduct accurately reflected the very low priority accorded to Hong Kong. Rankin gave a reasonably accurate account of the riots, pointing out that poor conditions and low wages were conducive to unrest, that Triad members had taken advantage of the uproar for their own nefarious ends, and that the elections to the Urban Council, the only elected body in the colony, continued to be a sham. He might
A' HISTORY OF HONG KONG
have added, although it was not evident from the information given to the House, that while the suburban actions were clear_ly aimed at the Communists, the disturbances in central Kowloon were at least in part due to the boredom and desperation resulting from severe deprivation. It was left to the Minister of State for Colonial Affairs, John Maclay, later Viscount Muirshiel, to answer: Maclay had newly been appointed to the Colonial Office from the Ministry of Transport, and was to stay there for only three months before being promoted to the Scottish Office; his brisk peregrination through these departments illustrates how the Colonial. Office was still viewed as a convenient waiting room for able young Ministers who needed temporary accommodation on their way to better things. It was Maclay's first appearance in his new role, and he betrayed his ignorance of the colony, contradicting Rankin flatly when the Labour Member attempted to draw a distinction between the clearly political riots that had broken out in the suburban areas and those in Kowloon: Tsuen Wan, the Minister insisted, was in Kowloon.
After that flurry, British interest in Hong Kong subsided to its usual level. The labour adviser to the Secretary of State paid an official visit to the colony in 1958, and new regulations placing some restrictions on working hours and regulating conditions of employment came into force. The industrious Rankin kept on eye on things, occasionally prodding on the question of electoral reform and criticizing 'dictator-ships, however benevolent', only to be stonewalled by the Colonial Secretary, Lennox-Boyd, announcing that he was 'satisfied that there was no general demand or need for the introduction of an elected element into the Legislative Council'. Rankin managed to score one point on 16 December 1955 when the patrician Oliver Lyttelton dis-missed a petition for constitutional change since 'a large number of people who have signed are hawkers and other workers unlikely to have any real understanding of the issues involved'. Rankin was able to snap back: 'Does the honourable gentleman mean that an individual who is a hawker has no place in the British Commonwealth?'
The only matters given serious attention were those briefly con-sidered by an almost empty House on 23 May 1958. The standards of employment in Hong Kong were generally accepted as disgraceful by European standards and even, according to Ernest Thornton, Labour Member for Farnsworth in Lancashire,24 by Asian standards. Thornton had a natural reason to be concerned, since his own constitu-ents in cotton mills were being put out of work by cheap imports of
BETWEEN FOUR STOOLS
textiles, frequently from Hong Kong. Having visited India, Pakistan, Japan and South Korea, he found that only Hong Kong mills worked seven days a week, and that only in Hong Kong and South Korea were women working twelve-hour shifts. Many mills only allowed two, or even one and a half days off per month, although even these could be worked 'in very exceptional circumstances'. No one disputed the accuracy of Thornton's facts, and the Minister, Mr Profumo, announced that a draft Employment Bill to control working conditions was being prepared by the Hong Kong government. The conclusion assented to was that 'The House of Commons is seriously disturbed and worried to learn of these bad conditions and feels that they ought not to be tolerated.' What was not pointed out was that an additional factor was the modem machinery employed in Hong Kong, at a time when many British manufacturers were refusing to invest in plant and equipment and British banks were reluctant to lend for redevelopment. Hong Kong's prosperity might have owed much to exploited workers, but competent banking practices, and a reluctance of government to intervene in business more than absolutely necessary, were at least as significant.
Sir Alexander Grantham retired in December 1957, after the better part of ten arduous years, loaded with appreciative tributes. His tenure of office was remarkable chiefly because of the difficulties that he had so neatly side-stepped. No open ruptures had occurred with China, Taiwan or the United States, in spite of many potentially dangerous episodes. Relations with China, shattered by the Korean war, in which British troops had been sent through Hong Kong to play an active and distinguished part, were restored. Before he left, Grantham was invited to visit Beijing, a rare honour. Although this visit was intended to be 'entirely private', the Governor was invited to lunch with Zhou Enlai. Conversation was steered away from Hong Kong matters, but Taiwan was mentioned, a subject on which Zhou was remarkably relaxed, saying that time was on the side of the Chinese, and that the island would 'fall into their lap'. British rule had been restored with a light hand, and at a time when so much of the British Empire was disinte-grating under nationalist pressures, Hong Kong was politically quiet, and evincing remarkable powers of absorption.
For better and for worse, Grantham personally did much to define the colony's future. The democratic proposals advanced by Sir Ma.k Young were politely buried, interred by an alliance between Hong Kong business interests, the colonial administration and the British
A HISTORY OF HONG KONG
government, all united by an understandable, even laudable, anxiety not to rock a precariously stable boat. This was a policy Grantham's successors were to continue for more than twenty years.
The next Governor, Sir Robert Black, was a quieter personality, well attuned to the comparative calm that Hong Kong experienced during his period of office.
A utodecolonization
It was not until II April 1963 that the House of Commons had an opportunity of reviewing post-war Hong Kong in any detail, and the debate then held summarizes British views about the colony. Even after so long an interval since the return of Hong Kong to British rule, there were those who wanted to continue to avoid the issue, and the debate very nearly did not take place. Dr Jeremy Bray, an erudite and serious Labour Member, Denis Bray's younger brother, who had been born in Hong Kong, was due to open the debate when he received a call to the Labour leader's office. There he found not only Harold Wilson but the Lord Privy Seal, the future Conservative Prime Minis-ter Edward Heath. He was told that the Foreign Office and the Gov-ernor of Hong Kong were worried about debating the future of Hong Kong publicly, and asked him to call off the debate. Bray was able to convince Heath that an open discussion would not imperil the future of the colony. He said nothing about the incident at the time, but the near-paranoia of the colonial authorities and their close political links with the Conservative Party were neatly exemplified.25
It was also typical that the reply on behalf of the government was given not by the Colonial Secretary, Duncan Sandys, but by Nigel Fisher, the Under-Secretary, who had to admit that he had not even visited the colony. It was also typical that this was the highest post that Fisher, an inconveniently independent-minded politician, was ever to achieve; high-flyers were not put in that particular slot. In the course of the short -only an hour and a half was allowed -proceedings the by-now familiar points were raised. The continuing US embargo on trade with China was deplored, and the Nationalist attempts at subver-sion, supported by the USA, strongly criticized (from the Conservative benches); the lack of progress on popular representation was again regretted, and heads gravely shaken over the wretched conditions of factory workers (although it was noted that these were slowly improv-
,BETWEEN FOUR STOOLS
ing). Sir Robert Black had taken over from Grantham in 1958, and his administration had quietly gone about its business and kept out of trouble, while relations with China had stabilized. There was little controversy between the two sides of the House and general agreement that Hong Kong was doing well; hospital beds had been increased to ten thousand, education�P for all between the ages of seven and four-teen was being introduced, and the industry and enterprise of the popu-lation were commended.�P Hong Kong might not be the 'showcase of democracy in the East', as it had once been hopefully described, but Britain could be proud of her 'remarkable colony. Its story is a success story if ever there was one,' Fisher enthused, but he went on to make the revealing point: 'I find that even Treasury Ministers smile when Imention Hong Kong, because it is one of the few colonies that does not make large demands on the British taxpayer.'
The continuation of this happy state of affairs was in large measure due to the work of Sir John Cowperthwaite, Financial Secretary from 1961 to 197 1. During most of this time Sir John was able to exercise virtually complete control of the colony's finances. An anonymous col-league reported that 'Apart from Burgess [Claude Burgess, Colonial Secretary 1958-63), no one could keep Sir John Cowperthwaite in line. His brilliance and argumentation prevailed and he thus made policy by ruling on all items of expenditure.'26 Both Governors he served under, Sir Robert Black (1958-64) and Sir David Trench (1964-7g1) were sympathetic to the Financial Secretary's policies, which were also enthusiastically supported by the business community. Professor Alvin Rabushka, who made a study of the Hong Kong econ-omy, described Cowperthwaite as 'brilliant, well-trained in economics, suffered no fools, and was highly principled. He wouldn't last five minutes in a similar post in Britain, since he was not predisposed to compromise any of his principles Hong Kong allowed him that power.'g-only the constitutional structure of 27 A political economist in the
tradition of Gladstone or John Stuart Mill, Sir John personified what might be called the Hong Kong school of economists, unreconstructed Manchester-school free-traders, or, as it was describer:!, 'positive non-intervention'. Politicians and civil servants did not necessarily know more about business than did businessmen (a heretical thought in Britain at that time); nor did politicians have to suffer the consequence of business failures. They should therefore keep their noses to their own grindstones. Market mechanisms should be left to adjust fluctu-ations in the economy, and the government should concern itself only
A' HISTORY OF HONG KONG
with sharply focused and minimal intervention on behalf of the most
.4
The success of Cowperthwaite's policies was undoubted. With the most minimal restraints on maximizing profits, continued low taxation and rigid control of public expenditure, Hong Kong, in spite of the continuing embargo on trade between China and the USA, became 'a Gladstonian Paradise' and 'a living laboratory in which to observe market place competition'. In the Cowperthwaite decade real wages rose by 50 per cent after allowance for inflation, and the percentage of households with incomes ofless than $400 per month (which could be regarded as fairly acute poverty) fell from well over 50 per cent to 16 per cent. In spite of a scare in 1965, when a number of small banks failed, with consequent frustrations and disappointments, it could be said that, from an impoverished colony struggling to cope with thes. influx of refugees, Hong Kong had become 'a stable and increasingly affluent society comparable with the developed world in nearly every way�E.2s
It was also during the 1960s that Hong Kong acquired what have become its typical modem attitudes; that single-minded dedication to money-making which powered the engine of expansion, and an impatience with anything that smacked of the 'Welfare State'. Britain was regarded with something approaching contempt for its comparative economic sluggishness, attributed to the lack of enterprise generated by government support for lame ducks. Professor Rabushka enthusi-astically praised 'The pure fonn of homo economicus. His given name is homo Hongkongus,' and claimed that 'Hong Kongs= Happy Kingdom, while UKs= Unhappy Kingdom'.29 Cowperthwaite himself was not so brash. Like Gladstone, he had a sense of obligation towards the most unfortunate, which was combined with what he described as a tra-ditionally Scotch reluctance to spend money without seeing a corre-sponding advantage. He objected to governmental borrowing, which Hong Kong could easily have effected, citing reasons that might have sounded out-of-date to Adam Smith. At the same time he rejected that sacred cow of British governments, mortgage interest tax relief, on the unassailable grounds that it benefited the better-off, and that 'whatever we do for the middle-income groups must not be such as to prejudice, by diversion of resources or energy, the continuation of our maximum housing effort at the lower end of the scale'.30
However gratifying to free-market economists was Hong Kong's undoubted success, criticisms can be made of the Cowperthwaite phil-
BETWEEN FOUR STOOLS
osophy, and it may be asserted that a rather more sophisticated view of cost-benefit was needed in assessing public expenditure. Money spent on education, for example, has potent, if indirect effects upon the prosperity of a community: expenditure on health care can have many complex economic consequences, even if not all of them are fiscally beneficial. If government loans had been raised in the sixties in order to fund some of these desirable aims they would have been at rates that would, within a very short time, have looked attractive, and could have been easily repaid from the colony's economic growth.
Furthermore, the practice of turning the screw tightly on departmen-tal expenditure and rewarding the managers who spend least is a primi-tive form of budgetary control. It is implicit in a realistic system of financial management that cost-centre proposals are not plucked out of thin air but are the fruit of methodical planning. A department is charged with producing specified services and prepares properly costed plans to enable this to be done. Deviations from the budget at the end of the period need to be explained, and failure to use those resources which have been allocated demands just as much explanation as does overspending.
But, under the Hong Kong system, departments consistently reported large surpluses without incurring any criticism.
1967-8 1968-9 1969-70 1970-1
Education Budget 288,603 327,81 I 383,451 471,258
Actual 254,052 279,315 326,816 397,996
University Budget 68,084 77,728 93,61 S 131,413
Actual 35,235 65,888 63,406 93,588
Social spending Budget 15,858 19,881 22,498 40,324
subvention Actual 12,965 16,914 19,205 23,206
Medical Budget 54,609 62,085 64,023 88,882
Actual 46,341 52,458 57,732 63,147
Social welfare Budget 9,888 11,625 12,741 16,167
Actual 7,814 9,35�X I 1,069 12,425

(.ooo Hong Kong Dollars)
No explanation was demanded as to why, for example, the University funds were so wildly underspent -by nearly a half in 1967-8 and by a third in 1969-70 (in spite of restrictions a second university had been founded, supported almost wholly by public funds; the Chinese lJniversity of Hong Kong quickly developed into a highly-regarded institution). More seriously, at a time when tuberculosis was still a
. A HISTORY OF HONG KONG
major source of concern, the minuscule medical budget wasunderspent every year. In the last of the Cowperthwaite years the medical budget of about $89 million was underspent by well over 25 per cent. Not much over one pound a head went towards the people of Hong Kong's medical needs. Yet substantial progress had taken place; by 1963 refugees were being rehoused in permanent quarters at the rate of five hundred per day, and mortality and morbidity stat-istics both showed steady improvement.
The ability of Hong Kong to manage its own financial affairs without interference or control from Whitehall, which evolved during Sir John's period in office, materially assisted him in striking out on an indepen-dent policy. It had previously always been expected that government purchases would, wherever possible, be made in Britain through the Crown Agents. This system took a blow when substantial irregularities were discovered in the Crown Agents' organization, sharply reducing their standing as commercial partners. As previous Imperial tariffs and restrictions were removed the Hong Kong market was opened to foreign competitors, and any restraint on the Hong Kong authorities' ability to buy in the most favourable market vanished. Similarly, in the immediate aftermath of the war the devastated economy had received considerable financial help from the not-much-less devastated British government, and direct Treasury control was consequently imposed. The speed with which Hong Kong recovered took everyone by sur-prise; by 1947 no further grants were needed from London, although Colonial Office approval for the larger supplementary provisions was still required. By 1958 this restriction was removed, and the Financial Secretary given extensive powers, including loan-raising, which could be exercised without seeking Whitehall approval; all that Sir John was required to do was occasionally to consult with London and to hold the colony's credit balances in sterling.
In November 1967 the British Labour government, which had not been pursuing such pure laissez-faire policies, found themselves in severe economic trouble, and were forced to devalue the pound. This resulted in a loss of some HK$450 million of Hong Kong's hard-earned savings; to put this in context, the colony was spending at the time about HK$46 million a year on medical care, and the loss there-fore represented therefore some ten years' expenditure on this vital item. In an effort to persuade independent countries within the sterling area, who had suffered similarly, not to withdraw their balances to some safer haven, the British government negotiated the Basle Agree-
The mounts of the Fanling hunt would have met with a cool reception in the Shires.
LEFT: A dejected group of Japanese officers about to
surrender to the Royal Navy in August 19+5.
BELOW: Survivors of the Stanley camp, August 1945.
ABOVE: The original seal of the
colony, the work of 'an oilman at
\Yapping'. Still in use by the Royal Hong Kong Police.
ABOVE: Communist 'Leftist', as they were generally known -workers under arrest during the disturbances of 1967.
RIGHT: Bamboo scaffolding is used for high-rise building. This intricate network has the Mandarin Hotel as a background.
ABOVE: Imperial Hong Kong remained intact in 1950. The magnificently four-square Hongkong and Shanghai Bank building forms
a backcloth to the Law Courts, the Hong Kong Club and the cricket ground. Sir Alexander Grantham still had an uninterrupted view of the harbour from the first floor of the 'Japanned' Government House.
BELOW: Forty years later, only one of the buildings in the previous photograph can still be seen. The Law Courts, now the Legislative Council, are now several hundred yards from the sea-front. Ilehind them the new Hongkong Bank building is easily topped by its neighbour, the Bank of China. Between them part of the gardens around the cathedral is visible. On the right the Mandarin Hotel is on the 1950 waterfront. The City Hall, nearer the centre, is on reclaimed land.
..
ABOVE: 1970, and the Hilton Hotel is bigger than the Hongkong Bank. The Mandarin Hotel and City Hall are seen left centre. The extent of the reclamation, seawards of Connaught Road, can clearly be seen. Queen's Road, the original main thoroughfare, runs in front of
the Bank building.
BELOW: Only twenty years later, the same view 1s almost unrecognizable. The cylindrical Hopewell block dominates Wanchai, and the bare foreshore in the centre distance has been replaced by the new town of Tseung Kwan 0. The dark spire is the Bank of China building, and to the left
Government House is now entirely hemmed in.
BETWEEN FOUR STOOLS
ment with the major central banks, which provided a guarantee of the pound/US dollar exchange rate. In spite of the fact that Britain could have insisted on Hong Kong, as a Crown Colony, retaining its colonial funds in sterling -the Hong Kong funds represented 23 per cent of all external sterling balances -the same guarantee was extended to Hong Kong. Five years later the Hong Kong administration was freed from any restrictions and promptly -and wisely -diversified out of sterling into a wide range of currencies. From that time on Hong Kong was able to conduct its financial affairs in very much the same way as would have been done had it been an independent state. It chose to exercise its freedom in a fashion which, at the time when a Labour government was in power, was very much contrary to the ideas of the British administration.
When a Labour government under Harold Wilson was returned in 1964, it might have been expected that the criticisms levied against the Conservatives, especially of their failure to encourage the develop-ment of democratic institutions in Hong Kong, would be remedied. This did not prove to be so. The bipartisan feeling evident in the 1963 debate continued in 1965. Once again Mr Rankin asked what plans there were for 'some form of popular representation' in Hong Kong. The question was taken by a Junior Minister, Mrs Eirene White. (Labour followed Conservative practice of making Hong Kong the concern of the second division, but in the Colonial Office this was represented at that time by two talented women, Eirene White and Judith Hart, relegated only because of their sex, then an inevitable handicap in the Labour Party.) Mrs White cautiously replied that 'pro-posals for an extension of the franchise are now being studied', and confirmed that 'another four unofficial members would be admitted to the Urban Council, two of whom would be elected ... there are no plans for internal self-government'. Once again it had been a Gov-ernor, this time Sir David Trench, who succeeded Sir Robert Black in 1964, who had taken the initiative in proposing some advances in democratic representation by setting up a committee to study what might be done in the machinery of local government 'as distinct from the needs of the population as a whole'. Although in economic matters Sir David encouraged cautious policies, he was one of the more reform-ist Governors; but like Sir Mark Young before him he found political advances difficult to achieve.
There the matter was allowed to rest until the next debate, in Febru-ary 1967. It was an adjournment debate, filling in an odd half-hour of
A HISTORY OF HONG KONG
the House's time, but it gave the Minister of State, Judith Hart (who, as so often with those given responsibility for Hong Kong in the British government, 'had not been able to visit the colony'), an opportunity to restate, quite clearly, the policy that had been followed by all British governments since the 'Young Plan' was shelved in 1951. Mrs Hart did not hide behind the excuse of there being no demand in the colony for change, but came out openly with the real reasons why there was to be no move towards democracy, then or later:
Hong Kong is in a completely different position from any other of our Colonies. For international reasons alone, there are problems in planning for the usual orderly progress towards self-government. Because of Hong Kong's particular relationship with China, it would not be possible to think of the normal self-government and not possible, therefore, to consider an elected Legislative Council.
There remained, however, one field where some progress might be made. The Working Party on Local Administration, appointed by Trench, to which Mrs White had referred two years previously, had just published its recommendations. These suggested a comprehensive reorganization of all local administration based on a majority of elected members, leaving the existing colonial government unaltered. With the dignified lack of haste that characterized reform in Hong Kong, it was not until 1973, after the production of a White Paper, that any changes were made in the Urban Council; even as late as 1992 there was still no majority of directly elected members of the Urban Council.
Stiff upper lips
Both great Communist empires, the Russian and the Chinese, assumed many of the characteristics of the autocracies that had preceded their revolutions. Mao Tse-tung thought, and was able to act, very much as a reforming Emperor might have done two centuries before. Under the guidance of heaven he could propose great schemes of change which the inspired Chinese people would obediently execute. This was duly done: the Hundred Flowers Blooming Campaign of 1956 was succeeded in 1958 by the Great Leap Forward, followed in tum by the Great Proletarian Cultural Revolution, which began in 1966. In
BETWEEN FOUR STOOLS
the course of these some twenty million Chinese died, a great part of Chinese heritage was destroyed, and the legend of Mao's divine infallibility shattered. It was also made clear that China had drifted far apart from Soviet Russia, both philosophically and strategically.Chinese foreign policy has since moved from the aggressive mode in which Mao had contemplated an invasion of Taiwan, thereby frighten-ing off his Soviet allies, to one in which accommodation with the West' is sought. But this took a decade of lost opportunities, and caused suffering that is still felt.
The Great Leap Forward was an insane plan of Mao's which deployed a massive and wasteful effort in order to create a 'technologi-cal revolution to overtake Britain in fifteen or more years'. Huge irri-gation works were carried out, and nearly all the peasant population merged into twenty-six thousand communes. Rhetoric was substituted for sound management, with the result that grain production dropped, and at least twenty million people starved to death: by 1963 more than half of all deaths were of children under ten. Five years of relative sanity, allied to Chinese ingenuity and industry, allowed a recoveryfrom the Great Leap Forward before Mao plunged the country into even greater turmoil with the Great Proletarian Cultural Revolution, a period of persecution, terrorism and wholesale wanton destruction of China's past, far more effective than anything ever managed by the Western barbarians. Ten million fanatic young Red Guards marched through Beijing, shouting the praises of Emperor Mao, and were let loose to destroy the four 'olds' -old ideas, old customs, old culture, old habits -all the things that had made China a great civilization. After 1971 there was a relaxation in the more atrocious aspects of the Cultural Revolution, but in all ten years were wasted before Mao's death in 1976 made it possible for reconstruction to begin.
The first effects of the Cultural Revolution outside China were seen in Macao in I 966, when rioting Red Guards were fired upon by Portuguese troops. The Hong Kong equivalent was less serious, and was handled less drastically. In April 1966 a protest against a rise in Star Ferry fares (illogical, since it was only the first-class fares that were to be increased) became focused on the hunger strike of a deranged young man and led to riots in Kowloon. These started as spontaneous demonstrations by young people. Henry Lethbridge described them as 'reminiscent of a children's crusade ... a pro-cession, twisting and turning like lion dancers . . . boys, laughing, grimacing and showing off'. The playfulness turned more destructive
A HISTORY OF HONG KONG
as looting and arson spread. One adult rioter was killed by police fire.13The root cause of the disturbances was certainly not the ferry fares,
but more probably relative deprivation and endemic boredom. With very few communal facilities available, street life was the centre of social intercourse. A young man who lived in a shared cubicle in an overcrowded tenement would find it very difficult to stay out of any excitement on the streets, and the criminally minded would find the cover irresistibly useful. The privileged and comfortable colonial auth-orities showed a deplorable lack of imagination in failing to appreciate these factors. They were not alone in this failure, for compared to the urban riots taking place in the United States at that time the Star Ferry disturbances were inconsiderable; but in the atmosphere of Hong Kong, traditionally peaceable but always edgily conscious of the prox-imity of a potentially revolutionary China, civilian unrest was a cause of much worry.
Elsie Elliott (now Mrs Elsie Tu), a member of the Legislative and the Urban Councils, did her best to draw attention to the very realcauses for distress. Mrs Tu has been a shining light of liberal opinion in Hong Kong for thirty years. A working-class Tyncome to China in 1948 and to Hong Kong in 195g1eside girl, she had
as an unsalaried 'faith missionary'. In her school work she had first-hand experience of official corruption ('everything in those days was done by simple corruption'32), negligence, and brutal indifference. She wrote to an Assistant Director of Education complaining of underfunding, and received the retort: 'We have built housing for the underprivileged. Do you expect us to give them education too?' Mrs Elliott was able to produce dozens of examples of corruption, especially among the police, although she found it an unprofitable exercise so to do. The Colonial Secretary (at that time Michael Gass) 'was not willing to listen to anything that might lead him to the truth. His own reign in Hong Kong was short.' Her complaints led to Mrs Elliott being attacked by both the Chairman of the inquiry held into the riots, Sir Michael Hogan (Chief Justice of Hong Kong) and the Police Counsel, DJ.R.Wilcox (Crown Counsel, Hong Kong in 1965). The officials accused Mrs Elliott of 'inciting' the demonstrators, and of making 'unsubstan. tiated' allegations against the police. Nigel Cameron described the outcome of the inquiry as 'appalling flummery':
The Enquiry censured Mrs Elliott, Sir Michael sentencing her (because there was nothing to which he could legally send her
BE.TWEEN FOUR STOOLS
for trial) 'to the bar of public opinion where she must meet the censure and repudiation of all those right-minded people who believe in the freedom of the innocent from the taint of unwar-ranted suspicion and in the principles of frankness and fair dealing in the affairs of men.33
The next year's violence was more organized, more prolonged, andmuch more serious. Red Guards burnt down the British Legation inBeijing, and in London 'diplomats' from the Chinese Embassy attackedthe police with axes. In Hong Kong young followers of Mao, clutchingthe Chairman's great works to their bosoms, besieged GovernmentHouse, although in the most orderly fashion, guarded by a handful oBritish soldiers; all Communist-owned buildings were placarded withanti-British slogans; the Bank of China's loudspeakers poured outmore of the same. David Bonavia described the situation:
The worlds of Somerset Maugham and Mao Tse-tung met face to face in Hong Kong today. Both were baffied. Long before sundown the tumult and the shouting died, and on balance it was a draw with points in favour of Maugham. The gates of Government House were chained but ajar. Just inside was a wooden desk for the reception of petitions. Parking meters nearby were hooded and new police signboards proclaimed 'Parking space reserved for petitioners' ... The demonstrators sang vigorous songs of the Cultural Revolution and chanted slogans. At times different groups were singing different songs, with cacophonous results which ill accorded with the sentiments of the most popular number, 'Unity is Strength' ... A police cordon kept further comrades from joining the fun. The cheerleaders became still hoarser until some of them were barely squeaking. In the black cars, the anti-persecution committee sweltered ... Eventually the cordon moved off, with demonstrators pushing the leading car, which had overheated ... As it was already lunch time, the dem-onstrators knocked off and returned an hour later to resume
chanting until five o'clock, when they all went home. The ocasualty was the Governor's pet poodle, which went frantic with nlyindignation and had to be removed from the scene. The posters were scraped off the gate and thrown away.34
More seriously, as the disturbances continued through the summer,
A HISTORY OF HONG KONG
thousands of bombs were planted, which killed fifteen people, includ-ing some children, and wounded many more. The colonial government handled the situation authoritatively. Their reaction was measured and firm. Demonstrations were dispersed and the noise from the Bank of China loudspeakers drowned out by light music. Except to quell a disturbance on the frontier, in which some police were killed by Red Guards, the army was not called upon. The police showed great cour-age and determination, losing ten killed and many wounded, while continuing to act with disciplined restraint: 'Hong Kong neither bent nor broke before the storm. The Governor, Sir David Trench, who had been awarded the Military Cross for his courageous activities behind enemy lines during the war, continued, with aplomb, to play golf at Fanling, and cricketers continued with their ritual in Central.'35
Sir David was a personage of substantial presence, which helped to reassure the nervous, and very much the right man to have at the head of the colony in times of crisis. He was also the first Governor to have had no real exposure to the pre-war Empire. Sir Robert Black had joined the Colonial Service in 1930, but Sir David only came down from Cambridge in 1938, and was posted to the Solomon Islands, out of the Imperial mainstream. A combination of a bluff -even gruff -manner and considerable sensitivity was exactly what the difficult times demanded. However well-directed were the Hong Kong government's reactions, they could not have been effective if the great majority of the population had not been willing to support the authorities; nor indeed if China had chosen to give substantial backing to the demon-strations. But the majority of the population were distressed by the interruption to the even tenor of their ways, and kept their heads down. The Kaifong Association leaders, who had been silent during the pre-vious year's disturbances, hastened to assure the Governor of their support, and were rewarded by being asked to a garden party. Nor did the Chinese authorities offer much more than vocal, and discreet financial, support.
Active support for the rioters came from the Red Guards who had seized power in Canton; the government ins.Beijing, with only shaky control over the monster Mao had unleashed, were more cautious. The most decisive measures available to the Chinese authorities, simply cutting off Hong Kong's supplies of food and water, were not used. The water weapon alone would have been decisive, for since 1963 the colony's water supply had become critical, as the demand soared above anything that could be provided from its own resources.
BETWEEN FOUR STOOLS 47 1
Domestic taps received water only once every four days for one period of four hours, while stand-pipes in the streets, at which huge queues formed, were only open for an hour or two each day. A major new reservoir scheme at Plover Cove was under construction, but it was clear that water would have to be piped from China to meet the colony's needs. The very considerable figure of ten thousand million gallons a year had been negotiated, and if this were discontinued for any length of time Hong Kong would come to a halt. China's reluctance to do this suggests that the Hong Kong and Macao demonstrations were local and spontaneous, part of the near-collapse of central authority at the time, rather than a policy originated by Beijing. Certainly wh.en the Portuguese offered to evacuate Macao completely this was refused by China, signifying an intention to retain the existing status there as in Hong Kong.
The response of the Labour government to these dramatic events was exactly what might have been expected from the Conservatives: yes, there was involvement by the Chinese officials in the colony; no, the United Nations would not be asked to intervene, the police and the Governor were doing splendidly. Both Jeremy Thorpe, the leader of the Liberal Party, and Robert Maxwell, then a Labour Member, raised the question of electoral reform, to receive the by-now estab-lished negative.
1971 was the next critical year for Hong Kong, and might be taken as marking the beginning of its modem history as a city-state. Sir David Trench was replaced by Sir Murray Maclehose, Sir John Cowperthwaite by Philip Haddon-Cave, and the United States finally abandoned its support of Taiwan and agreed to the succession of the People's Republic to the China seat on the Security Council of the United Nations. The full story of that most interesting period, when China called a halt to the self-destruction of the Great Proletarian Cultural Revolution and began to take her rightful place in the world, has never been fully told. It could be said to begin with the election of President Nixon, who took office in January 1969, with a policy of disengagement from Vietnam, which was duly announced one year later. At about the same time coded signs appeared that China was seeking a change: Harold Wilson recorded that 'we noted with interest from the diplqmatic telegrams an improvement in relations between China and Britain. It was, at this point, only at the level of gestures; but in Peking gestures are not accidental.'g36 Other 'gestures' included a message, passed to US Secretary of State Henry Kissinger via Pakistan,
A HISTORY OF HONG KONG
suggesting that talks might be profitable, which was followed by an invitation in April 1971 to the USA table-tennis team to visit Beijing. This hint was correctly interpreted, and in July Kissinger paid a private visit to Zhou Enlai, then Premier of the State Council, preparing the way for more formal talks. The same month American trade sanctions against China were lifted, and President Nixon's visit was announced for the following February.
Bit by bit, American support for Taiwan, which had been a cornerstone of foreign policy for so long, was seen to diminish: a move in October 1971, sponsored by the USA, to allow Taiwan to keep its place in the United Nations was rejected, and the People's Republic of China, twenty years after the event, was admitted to the United Nations and to China's seat on the Security Council, without demur from the American government. Nixon's triumphant visit culminated in the famous Shanghai Communique of 28 February 1972. It was, announced the President, 'the week that changed the world'.
It certainly changed the face of Hong Kong, since in reference to Taiwan the communique announced: 'The United States acknowl-edges that all Chinese on either side of the Taiwan Strait maintain there is but one China and that Taiwan is a part of China. The United States does not challenge that position.' If the United States agreed that Taiwan, their own protectorate, was to be part of China, there was not much hope that Hong Kong, always looked upon askance as a 'colony', and thus anachronistic and deplorable, should be treated differently. It should therefore have been no surprise when, only five days later, the United Nations Committee on Decolonization was asked by the Chinese representative, Huang Hua, to remove Hong Kong from the list of colonial territories. He explained China's view that:
The questions of Hong Kong and Macao belong to the category of questions resulting from the series of unequal treaties which the imperialists imposed on China. Hong Kong and Macao are part of Chinese territory occupied by the British and Portuguese authorities. The settlement of the questions of Hong Kong and Macao is entirely within China's sovereign right and does not at all fall under the ordinary category of 'Colonial Territories' covered by the declaration on the granting of independence to colonial countries and people . . . the Chinese government has consistently held that they should be settled in an appropriate way when conditions are ripe.37
BETWEEN FOUR STOOLS
Had Britain wished it would have been entirely open for the Foreign Office to have objected, and put the alternative view, which Britain had constantly maintained, that Hong Kong was a Crown Colony, a British Possession, ceded by a 130-year-old treaty, while the New Territories were the subject of a subsequent agreement which would expire in the course of time and which would need further discussion. But the Prime Minister, Edward Heath, and the Foreign Secretary, Sir Alec Douglas-Home, took no action, and the Chinese case was accepted by default. The reasons for doing nothing were manifest. Only a few days later -on 13 March -a joint Anglo-Chinese com-munique was issued establishing embassies in London and Beijing, and agreeing 'principles of mutual respect for sovereignty and territorial integrity'. This was the culmination of twenty years' negotiations, and, taken in conjunction with Britain's tacit acquiescence in the removal of Hong Kong from the list of colonies, made it clear that the die had been cast. Both Mr Heath and Sir Alec had been members of the government in 1957 and would have known of the secret agreementthen made by Selwyn Lloyd and Macmillan. Many years later, in July 1989, Sir Edward, as he became, confirmed that in his first meeting with the Chinese government in 1972 he 'obtained from Mao Tse-tung, in the presence of Zhou Enlai, Deng Xiaoping and Hua Guofang, an undertaking that nothing serious would happen in Hong Kong and that the changeover in 1997 would be peaceful'. Even though by 1996 Mao and Zhou had long since departed, and Sir Edward never regained office after his electoral defeat in 1974, he continued to be held in high esteem by the Chinese leadership, and in that world where personal relationships count for so much, he was able to speak more authoritatively than British Ministers. When in 1974, visiting Hong Kong as Leader of the Opposition, Heath confirmed that Hong Kong would indeed be handed back to the Chinese in 1997, his statement should have been taken as definitive; it also strongly suggested the existence of a previously arranged understanding.38
The British government had reason to be satisfied with whatever settlement had been reached, for they were in an indifferent position to negotiate. No longer could Britain send a division of troops to defend Hong Kong's borders, and indeed such a move would have been pointless. The 1967 disturbances had proved how easily China could take back the territory by cutting off supplies. Even more simply, the border could be opened. An anonymous civil servant put it suc-cinctly: 'All they have to do is to send in two million of the buggers
A HISTORY OF HONG KONG
... and we can kiss it all goodbye.'39 More damaging criticisms would be that, in agreeing the retrocession of Hong Kong-at some future date, the British government were paying little attention to the welfare of its inhabitants. Trade with China was the first objective, and was actively pursued. Civil and military aircraft, machine tools and com-puters were eagerly presented to the Chinese; a major machine tools and scientific instruments exhibition was staged in Shanghai; trade missions were exchanged and export restrictions relaxed. 'Clearly,' wrote Peter Walker, then Secretary of State for Trade and Industry, 'the world's most populous country must be a trading partner of great significance for this country and indeed the whole Western world.' This has proved an illusory objective: some sales were made -thirty-five Hawker Siddeley Trident airliners being the most important, but China remained, as it had done in the previous century, a disappoint-ment to British exporters. By 1977, after five years of effort, China still imported a lower value of British goods than did Korea or Pakistan, and only 3 per cent of that taken by that old benchmark, Holland.
In pursuit of this elusive aim the interests of Hong Kong were relegated to a subordinate position. If doubts lingered that Britain had any intention of accepting more than a strictly confined responsibility for the future of its colony, they should have been dispelled by the Immigration Act of 1971, which conferred the right of abode in the United Kingdom only on 'citizens of the United Kingdom and Colonies who are connected with Britain by birth, adoption, naturaliz-ation or registration or are children or grandchildren of such persons ... or who have been resident in Britain for a continuous period of five years ... Those having this right of abode are known as "patrials".'40Although more than three million Hong Kong Chinese were British citizens (the remainder, never having so registered, were presumed to be citizens of China residing in Hong Kong -although in the People's Republic's view all, without exception, were Chinese citizens), very, very few Hong Kong Chinese qualified as patrials. Those who did not so qualify were thereby warned that they could not look for refuge in Britain. From then on Hong Kong was not to be referred to as a colony, but as a territory, and the stage was set for the eventual, and inevitable, British abdication.
16
THE GOLDEN YEARS
The judicious application of cash
If the sixties were the Cowperthwaite years, a period in which the economy was abandoned to the uninhibited play of market forces, the seventies might be described as the Maclehose years, when central planning was accompanied by rapidly increasing public expenditure. Like most convenient generalizations these need qualification, but it cannot be denied that a new Hong Kong has emerged since 1972, changed to a degree that makes the colony of that time almost unreco-gnizable. The community had prospered under the Cowperthwaitepolicy, but the prosperity had not been spread sufficiently wide. Lon-doners in the 1980s became inured to the sight of young people begging in the Underground and sleeping in cardboard boxes, but such con-comitants of a laissez-faire economy were considered objectionable in the seventies. Hong Kong in 1971 was described as 'a cruel society, in which very little assistance is given to the poor. The government has consciously pursued policies designed to foster economic growth, in the conviction that the economic prosperity of the whole. colony would inevitably, in due course, filter down even to the poorest'. 1 But the filtering down�P was taking far too long, especially since colonial rule was approaching the end of its ordained life. Sir David Trench had been a colonial Governor in the great tradition, with the virtues and limitations that implied. Sir Murray Maclehose, coming from another_ milieu, was given different tasks; those of moving towards a less unequal society and away from colonial traditions. He had also to bear in mind the ever-approaching retrocession, due in 1997, and the
A HISTORY OF HONG KONG
sensitive negotiations that this would entail: if Hong Kong was to be handed back it must not be as a colony, but as near to an independent state as might conveniently be contrived, and in a condition that did credit to its previous owners.
Foreign Service and Colonial Service officers tended still, as they had done in the nineteenth century, to come from different stables. The popular conception of the Foreign Service as being composed of elegant young Etonians decorating the salons of Europe, while Colonial Service officers were khaki-clad pipe-puffing district commissioners secluded in the bush was exaggerated, but held a grain of truth. The two services inculcated different attitudes: the Foreign Service was responsible for representing British government views abroad (an Ambassador, as one seventeenth-century cynic put it, is one sent to lie abroad for the good of his country); the Colonial Service officer grew to feel himself more a representative of his territory, defending its interests, sometimes passionately, even against (or perhaps especially against) the Imperial government. Merging the Foreign Office with the Colonial Office (by then renamed the Commonwealth Relations Office) in 1968 had not changed the attitudes of the existing staff.Maclehose's predecessors had come from the Colonial Service, with disparate experience of many comers of the British Empire; he, and his successors Edward Y oude and David Wilson, had progressed from university to the Chinese Department of the Foreign Service, and were all experienced sinologists with extensive experience of negotiating with Chinese officials. The change signalled that successive British governments required Governors not only to superintend Hong Kong, but to conciliate Beijing. Anyone who might 'go native' and manifest undue enthusiasm for Hong Kong interests would be dangerous.
Murray Maclehose took over in November 1971g. Although the extensive powers theoretically possessed by colonial Governors were in practice considerably restricted, an able and persistent Governor might exercise great influence, especially when his most senior col-leagues were of like mind, and when he had the support of the British government. Murray Maclehose had all the qualities needed to influ-ence events; he had previous experience of China as a Consul in Hankow after the war, and as Political Adviser to Sir Robert Black in Hong Kong in 1963; in the critical years of 1967-69 he had been British Ambassador in Saigon, and he had held a number of posts in the Foreign Office and Colonial Office. Of these the most important was as Principal Private Secretary to the Foreign Secretary from 1965
THE GOLDEN YEARS ,
to 1967, at a time when the post was held by Michael Stewart andlater George Brown. Coping with the often brilliant but unpredictableand unsober Brown must have been a useful preparation for thestresses of Saigon and Hong Kong.
poliContinuity of government, in spite of the changing direction of cy
, was ensured by a succession of able Financial Secretaries. Thispost had only four incumbents, all highly competent, in the thirty yearsto 1991, a period in which the post of Colonial Secretary changedhands eight times; two Financial Secretaries,gJohn Cowperthwaite and
Haddon-Cave, put in twenty years between them, and as SirPhilip went on to become Chief Secretary -second-in-command -Maclehose had all the support he needed for new policies. Encourage-ment too was offered from Whitehall by a succession of governmentswith generally liberal social policies -the administrations of EdwardHeath, Harold Wilson and James Callaghan.
The new order was to reflect social, rather than political, changes,for British governments continued to shy away from any moves towardsmore representative government in Hong Kong; nor were there manysigns there of a desire for such changes. What alterations did takeplace, which are described in the next chapter, were however accom-panied by so many public-relations efforts as to alter the public percep-tion of Hong Kong quite radically. Hong Kong moved quickly frombeing a Crown Colony to a Dependent Territory, in accordance withthe wishes of the governments of Britain and China, if not necessarilywith those of Hong Kong's people. Change was made easier asimproved relations between China and the United States resulted inthe trade embargo being lifted, enabling the 'Territory' to expect aneven more prosperous future.
It was soon apparent that the new Governor intended changes:
Maclehose immediately began to dismantle much of the pompassociated with the post. He dispensed with the use of the Gov-ernor's limousine for the short journey from Government Houseto Legco [Legislative Council] Chambers, preferring to walk therefor meetings. A common touch quickly became apparent as thenew Governor took regular walks, in short-sleeved, open-neckerlshirts, through densely populated residential areas. All indicationswere that here, at last, was a Governor of the people. This initself came as quite a shock to the colonial system.2
A HISTORY OF HONG KONG
Right-wing politicians, impressed by the arguments of monetarist econ-omists, maintain that problems cannot be solved by 'throwing money' at them; such an emotive term can hardly be allowed to obscure the fact that many serious problems of society can only be solved by the application -preferably judicious -of a great deal of money indeed. This the Hong Kong government under Sir Murray's leadership pro-ceeded to do. Social expenditure (hitherto restricted partly for ideologi-cal reasons, but also out of the impossibility of establishing satisfactory standards for the continued influx of refugees -the population had grown from 3,133,131 to 4,064,400 in the decade before 1971) could now reasonably be increased, and the budgetary stringencies of the preceding period had left resources enabling this to be done. The 1971 Hong Kong Annual Review, the first to be issued under the influence of Madehose, was a bold document, amounting to nothing less than a manifesto for change, and foreshadowing the policies of the 1970s, which made that decade a 'glden age' for Hong Kong. A usually bland
go
and formal official publication was charged with new energy. After appropriate acknowledgements to the previous incumbent the areas for expansion were identified -water and power supply, education, health care and, above all, housing: 'Housing is the one major social service that remains to be reviewed. It is a key to so much -health, standards of behaviour, family solidarity, community spirit, distribution of labour,
3
communications needs, to name a few factors only.'
The standard of much of Hong Kong's housing was then indeed dreadful. Many of the squatters had been rehoused, but only in the most basic way: the module of 120 square feet of concrete box, without any facilities, was intended for five adults, but often accommodated many more. Each floor, which housed up to five hundred people, had 'one and only one sanitation unit with taps but no basins and with separate latrines for males and females' .4 It is hardly surprising that life in the squatter camps was reported to be healthier, which was just as well, as half a million people sill lived in such matshed and biscuit-box shacks. The 1971 report claimed, without much evidence, that these resettlement units were 'by the standards of the time, regarded by the occupants as entirely acceptable', but admitted that the time had come when something a great deal better was needed.
The whole review section of the report indicated that radical changes were intended. An entirely new concern was manifested for the 'rapidly deteriorating state of the environment': 'The Urban Council was faced with a general public, certain industries, agriculturalists and others
THE GOLDEN YEARS
who seem blinded by selfishness or obstinacy to the fact that pollution is unhealthy and expensive, avoidable and invariably at least as much one's own fault as anybody else's.'
Fresh attitudes were highlighted by welcoming, albeit with some reserve, the sort of criticism that had previously been so bitingly attacked by such civil servants as Sir Michael Hogan:
Young people who have the time spare to help other people in their complaints to authority ... may at times be affected by hubris and give encouragement to violent protest, but often they are sincere. It is gratifying, if the word does not smack too much of patronage, to note signs of a wider sense of involvement in the community among so many young men and women who are poles apart from the juvenile criminals. This encouraging trend has, not surprisingly, been paralleled by an increasing interest in -and criticism of -the machinery of government. The younger generation, as in all urbanized society, has moved away from the traditional view that life is centred on the family, still more the clan, and that 'government' is a remote and impersonal entity whose ways are inherently incomprehensible.
This was indeed stirring talk from a Hong Kong government publi-cation.
Implementation of the new order came swiftly. A more effective budgetary system was immediately established, with department heads making more realistic assessments of their requirements, and no longer being patted on the back for underspending. In 1972-73, the first year of Maclehose's period of office, the education and social services departments succeeded, for the first time in many years, in spending the whole -and slightly more -of their entitlement, a much healthier state of things.
Item Estimate Aaual
General Services 636.6 637Social Services 1327.3 1357.2Education 683.2 694.0
($million)
Total government expenditure was increased by over 50 per cent
A HISTORY OF HONG KONG
between 1970 and 1972, and has continued to increase steadily since then. In the year 1996 public expenditure on all social items -socialwelfare, health, housing, environment, education, infrastructure and community affairs -was estimated at over �G2,300 a head, a far cry from the austerity of the Cowperthwaite years.
Such a programme was bound to attract objectors: 'Philip [Haddon-Cave] just let things go to his head ... Revenues from land sales were booming, and he just spent, spent, spent. There was no one with authority to check him,' one disgruntled official complained.5 Somecriticisms were doubtless valid -the cost overruns of the University of Science and Technology, the funding of the underground Mass Transit Railway (MTR) and the aesthetic qualities of the new cultural centre may be cited as evidence -but the spending was no panic response to an unacceptable situation. The planning effort involved was.huge, perhaps without parallel, involving as it did the reconstruction of a transport system, rehousing half the population, and providing acceptable levels of education and health care, all in short order. New skills needed to be introduct:d imo the civil service, and the existing methods employed there sharply improved.
Even though rebuilding in Hong Kong proceeded at an uncomfort-ably rapid pace, the complexity of the reconstruction necessitated pro-tracted planning studies. These were put in hand during the Maclehose years, but results often did not appear until much later, the new-town programme being a case in point In 1972 the total population of the suburban communities was about half a million, gathered mainly in the older, and rapidly deteriorating, areas of Tsuen Wan and Kwai Chung, where the riots of 1957 had started. The new development programme provided for a network of satellite towns stretching around the coast from Tai Po and Sha Tin in the east to Sheung Shui and Fanling adjacent to the border with China. By 1995 over 2.5 million people had been housed in these new communities; to put the achieve-ment in perspective, it took Britain, with a population ten times as numerous, a similar time to rehouse three million people in the post-war slum-clearance programme. Some of the new tov.ns are huge, far bigger than anything contemplated in Britain. Tsuen Wan houses over 700,000, while the population of Sha Tin is rapidly nearing this figure. Since Sha Tin is only five miles from downtown Kowloon, it hardly requires all the facilities that might be expected of an independent city, but a community with a great university, a racecourse, a fine museum and a large concert hall is rather more than a dormitory suburb.
.THE GOLDEN YEARS
Population dispersal means that Hong Kong people need to move about a lot, and the detailed planning of the new towns was integrated with a careful survey of transport, begun in 1973. Natural features -the steep terrain and the division of the territory into mainland and islands -present peculiar difficulties. The road network is the most intensively used in the world; on average 5ome seven million journeys are made on it every day by public transport, to say nothing of those made by the nearly three hundred thousand private cars. In spite of an extraordinarily ambitious road-building programme -$2,500 million to be spent between 1995 and 2000 -movement would be impossible without the links provided by the Canton-Kowloon electrified line and the MTR, the busiest underground railway in the world (many statistics about Hong Kong tend to be records of this sort). When the MTR was opened in 1980, connecting Central with Kowloon, it wasas a result of a compromise between the Hong Kong preference for private enterprise and the impossibility of running such a system with-out public funding. It is proving not inexpensive for the public purse, with constant equity injections, but to anyone who has experienced the New York or London systems the Hong Kong metro is a vision of a different world -clean, quiet and reliable.
'Throwing money about' in other areas has produced dramatic effects in Hong Kong. Millions of Americans might wish to live under a government whose policy is that 'no one should be denied adequate medical treatment through lack of means'. Medical charges are almost nominal, reflecting a substantial subsidy from public funds. Patients in public hospitals -some 85 per cent -are charged $7.50 a day (the figures have been converted to US dollars, and should be interpreted in the context of the average annual wage -excluding management and professional salaries -in Hong Kong being about US$13,500; adjusted for the Economist's Big Mac cost-of-living index6 this would increase to some US$20,ooo). This modest charge covers everything from meals, medicine and investigative tests to surgery or any other treatment required, and even it may be reduced or waived in chases of hardship. Maternity and child health centres, tuberc.ulosis and chest clinics, social hygiene clinics and accident and emergency departments are free; family planning centre and methadone clinic clients are charged the ludicrous sum of 14 cents per visit. 7
Like any health care system, that of Hong Kong is not immune from criticism; there is no general family practitioner service as in Britain, and specialist high-technology medicine is not as widely avail-
A HISTORY OF HONG KONG
able as in the United States. Nevertheless the generally satisfactorystandards are reflected in the statistics for monality.and most illnesses,which are usually better than in either of those countries. And nostatistics can adequately reflect the mental security given by freely -and quickly -available medical care.
However impressive Hong Kong's health care system, the mostsurprising advance has been in education. Only as late as 197 1, thatcritical year, did the government, stimulated by the urgent need toavoid charges of exploiting child labour, succeed in providing evencomprehensive primary education. Twenty-five years later there wereover 1,200,000 students at all levels, with more than $33 thousandmillion being spent on education by the government. From 5 per centof the relevant age group studying in universities or polytechnics in198g1, 18 per cent have places in 1995. This ambitious plan has notbeen fulfilled without some alteration in standards, especially sinceteaching staffare leaving in worrying numbers. But Hong Kong tertiaryinstitutions have never been as research-oriented as the best of thosein Britain, concentrating, except for some specialized fields, on under-
teaching. Graduates have then often gone abroad for post-graduate work. It is much easier to expand only undergraduate teachingthan at the same time to extend research facilities to what wouldelsewhere be considered a balanced level.
Parallels may be found in the veritable passion with which HongKong approaches examinations to the prestige attached to learning inclassical China. The system is highly competitive and demanding, withthe inevitable result that high standards are achieved, but at the expenseof thronling back more creative and discursive approaches. Hong Kongstudents are often respectful and deferential and less critically enquir-ing than might be wished. Once through the system many graduatesdo in fact seek further training abroad, with the great advantage thattheir instruction has usually been (with the exception of the ChineseUniversity) in English. Graduates therefore find it easier to find placesin universities in English-speaking countries with more facilities forresearch; in 1995 13,348 students left Hong Kong for courses inthe USA, Australia, Britain and Canada. Chinese-speaking studentspreferred to go to Taiwan rather than China, although the numberhas increased from the low point of 1989, when over five thousandHong Kong young people were taking courses in Taiwan, with onlyeighty-two opting for the People's Republic.
A worryingly large number of these students do not return to Hong
THE GOLDEN YEARS
Kong. In 1994-95 more than a hundred thousand people leftthe colony. Most were of professional and managerial status, with their families, and the resultant 'brain drain' makes the expansion ofhigher education more urgent. The considerable advantage Hong Kong derives from its Eng-lish-speakers is in danger of being eroded, and the necessity to add a command of Putonghua (Mandarin) creates another hurdle for the ambitious, who must in future master three spoken and two written lan-guages. Although the instruction at Hong Kong University is given in English, even in that most senior of the universities a great many students are only modestly competent in the language
Providing adequate affordable housing for most of the population has been the third unquestioned achievement of the Hong Kong government. After the initial effort to provide basic accommodation for the wave of post-war refugees a plan for creating and maintaining public housing of a tolerable standard evolved. The outlines of a policy had emerged in Trench's day, and were described in the Hong Kong White Papers of 1964 and 1965, but the pace of building accelerated after the recognition dawned that the deplorable conditions in which people lived might have something to do with the discontent that erupted in the 1966 riots. A beginning was made with the replacement of the most grossly inadequate blocks built after 1954. Because of Hong Kong's peculiar topography, and its acute shortage of suitable building land, construction has been difficult, necessitating much land reclamation. The first programme was succeeded by another, begun in 1986, which provided for 1,150,000 new flats, followed by a current (1996) five-year plan for another half-million.
Basic rents for public housing are cheap enough, but that accommo-dation remains basic indeed, amounting to only 5.5 square metres a person. Many families can afford more, and average public rents approximate to 8.5 per cent of household income, which is very credi-table; although, as Denis Bray remarked, 'We often produce statistics to show how prosperous we are, but we do not often point out that most of us live in a one-room flat.'8 Although rapid progress is being made, in 1995 nearly 300,000 people continued to live in thoroughly unsatisfactory conditions
Among these the most wretched are not perhaps the inhabitants of cardboard boxes by the Star Ferry terminal, but the 'caged men' of Mongko., the pensioners without a family, whose home is a bed space surrounded by wire mesh to keep their few belongings safe, with a one-twentieth share of a lavatory and bathroom. The social security
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HONG KONG HARBOUR RECLAMATION
THE GOLDEN YEARS
system in Hong Kong does not claim to be anything except a safety net to prevent absolute destitution and starvation, and is targeted very narrowly. Unemployment, disablement and retirement benefits are paid at rates of between US$150 and $500 per month, all of which are means-tested, and an unconditional annual income of under US$1,ooo is provided for the over-seventies. If old people are part of a family unit this may be adequate, but with a rapidly ageing population, thanks in part to rising standards of health care, the old and lonely have a poor time ofgit. An Oxfam report published in 1995 established that in spite of the substantial increase in public funding, the real income of households with less than HK$4,ooo per month had actually dropped in the preceding ten years. In years to come they will do better, since January 1995 saw a mandatory provident fund ordinance enacted, which should result within two years in a compulsory retire-ment benefit scheme. In accordance with the established Hong Kong philosophy, pension schemes will be privately administered although subject to official monitoring.
Chinese officials are not happy with this increased welfare spending, which will widen even further the gap between living standards, and compared government expenditure to 'a Formula One car which is going to crash and kill all six million people in Hong Kong'.9 Even so, public support from a wide variety of non-governmental sources is needed. Many of them are organized by the Community Chest to produce about US$15 million a year for charitable purposes. It has long been a Chinese tradition that good works are meritorious; and equally that they deserve formal recognition -a scroll, a plaque, a dedicated room, or, for the most generous, a building commemorating the donor. The situation is rather like that of Britain a century before, when Peabody housing and Carnegie libraries (both funded by Ameri-cans) supplemented more spartan local authority provisions.
Heading the list of all charitable donors is the Hong Kong Jockey Club (no longer, since a nervous tactical move in 1995, 'Royal'). Since betting on horseracing is the only legal form of gambling in Hong Kong (although illegal mah jong flourishes fairly openly), and since the pursuit of good fortune amounts to a passion among Cantonese, and is not despised by the British, the 'nice little 7 furlong race course' that Kipling admired generates, with its associated facilities for gam-bling, thousands of millions of dollars every year. A substantial slice goes to government: the Jockey Club typically contributes the larger part of the �G1 ,ooo million or so of the Hong Kong government's
A HISTORY OF HONG KONG
'internal revenues', which amount to some 15 per cent of total income. After tax and transfers to reserves, all the Jockey �PClub's profits are distributed to charity. The distribution of these funds is officially part of the patronage of the Club Stewards, an unelected and -in the strictest sense of the word -unaccountable body, responsible only to the members of the institution. In practice these very responsible and serious-minded gentlemen, in close co-operation with the government, make honourable and effective use of their patronage. The Hong Kong Jockey Club, for example, not only funded the new University of Sci-ence and Technology, but managed its construction, although not with-out substantial cost over-runs.
It is questionable, however, whether this is the best way to fund so large a proportion of public spending, and it is significant that the government is coy about drawing attention to the Jockey Club's contri-bution. There is no entry for the club in the index to the 1992 Annual Review, nor is its contribution to tertiary education mentioned in the relevant section, although it was much greater in that year than the whole of the government's capital expenditure ($437 million) on all education institutions.
Solid progress under Sir Murray Maclehose's administration was supplemented by some more cosmetic adjustments. It was modish during the 1970s and 1980s to engage McKinsey & Co., the eminent management consultants, to suggest corporate re-organizations; and the considerable expense of their studies usually meant that many of their recommendations were accepted. In Hong Kong this was quickly done. The Colonial Secretary was renamed Chief Secretary, and the Secretary for Chinese Affairs banished to the history books, to be replaced by the Secretary for Home Affairs. (It is a measure of the inertia of old colonial attitudes that it had taken until 1973 for this to be done; in a community 98 per cent Chinese the total inappositeness of the title might have been spotted before.) The triumvirate of Gov-ernor, Chief Secretary and Financial Secretary had full executive power to act within the general policies of the home government and the loose restraints of the Hong Kong Constitution. Reporting directly to them were a number of Secretaries, each in charge of one or more executive branches, acting very much as managers of subsidiary com-panies reporting to a main board executive committee. In this analogy members of the Councils might be considered as shareholders, some-times helpful, sometimes bothersome, but irrelevant to most decisions.
A more official explanation, advanced in successive Government
THE GOLDEN YEARS
Annual Reviews, was that the Executive Council played 'a role some-what similar to that fulfilled by the Cabinet in a Westminster-style system'; a suggestion needing so much qualification as to render it almost a convenient fiction. Of the fifteen members of the Executive Council, five were there by virtue of their contracts of employment -Governor, Chief Secretary, Financial Secretary, Attorney General and Officer Commanding British Armed Forces. The remaining members -all appointed by the Governor -were eminent and busy people,sselected as being co-operative and reasonable, without those difficultsand recalcitrant characters to be found in the most sedate of Cabinets.sIt would have been impossible for members to have the informed andsdetailed discussions that take place not only in Cabinet itself, but insthe many Cabinet committees. Executive Councillors' powers, too,sremain much more restricted than the almost dictatorial authority ofsa British Cabinet. Allocation of finance was decided by the ex-officiosmembers themselves in consultation with Secretaries, and presentedsas afait accompli to the Council. On other items the Council has limitedsopportunity to intervene. An official explanation given in 1976 was:s
Usually the Council is presented with an agreed recommendation, backed by a detailed explanation of the rationale behind it. The Executive Council may question, vary, amend, or refer back for further study . . . But outright rejections are unusual, and the Council very rarely takes up a general discussion of a problem,and attempts to formulate its own solutions.10
Nor had the Governor anything like the powers of a Prime Minister. Things were to change radically in 19921 but until that date the conven-tion was that while a Prime Minister may dismiss the whole of his Cabinet and replace it overnight, a Governor was stuck with the members he inherits or appoints until their time in post has run out. The feeble importance attached to either Council in colonial Hong Kong was evidenced by the custom of the Governor and his officials of lunching together between the weekly meetings of the Legislative Council in the morning and the Executive Council in the afternoon. This was known as the 'Tripe Club', since 'tripe' was sure to be served in the morning and afternoon sessions, and might also be available in between.
Although nothing was done to extend democratic participation in the Hong Kong government, some constitutional changes took place
A HISTORY OF HONG KONG
during the 1970s which increased the effectiveness of the Councils. From 1976 Sir Murray Maclehose, simply by not appointing the full complement of official members to the Legislative Council, gave the unofficials a majority, which rose from two to ten in 1984, although the hypothetical possibility of immediately appointing enough officials to carry a contested motion remained. Not that the unofficial majority showed any sign of kicking over the traces; the debates, which had been described as 'like an antiphonal chant by government and opposition members on "the voice that breathes o'er Eden"c', retained their 'calm ... with the absence of overt opposition [that] is mirrored across the world, from Budapest to Beijing, from Havana to Moscow'.'1
One innovation which later transformed both Councils, immeasur-ably for the better, was the appointment of women. Mrs Eva Shupui had been nominated to the Legislative Council by Sir David Trench; after the prudent interval of ten years this was followed by Sir Murray's appointment to the Executive Council of Mrs CJ. Symons. Another long-overdue move was the recQgnition in 1974 of Chinese as an official language jointly with English, providing that 'both languages possess equal status and enjoy equality of use for the purposes of communication between the government and members of the public'. This sounds more impressive than in fact it was, since the new law did not require Chinese versions of even current legislation to be issued. Only in 1989 did laws begin to be issued in both languages, and the existing corpus of law is still being translated. Until 1996 English remained the sole language which might be used in the higher courts, Chinese being accepted only in magistrates' hearings. Even there the change appeared largely cosmetic; Jan Morris describes a magistrate who, 'sitting as he does alone upon his bench, hearing cases involving simple Chinese in a language he does not understand ... bullies defendants mercilessly ... bludgeons witnesses and testily pro-claims his own importance -"This is a court of Law . . . Do you understand that? Do you hear me? I am not speaking German or Greek to you." '12

It is instructive to contrast the situation with .that pertaining in Wales, where some half a million people, from a total of two and three-quarter million, are able to speak Welsh. Very few, if any, could not also command English (although many thousands are monoglot in Urdu or Hindi). But Welsh enjoys fully equal status with English in all aspects of public life (to an absurd level: taxis carry the venerable Welsh word for a cab, 'tacsi'), while in Hong Kong, where more than
'THE GOLDEN YEARS
90 per cent of the population speak Cantonese and only a moderate proportion also has English, they have to put up with the sort of insulting behaviour Jan Morris describes; but the Welsh, of course, have votes.
Whatever the deficiencies. of Hong Kong policy, its people seemed reasonably well satisfied with the results. Hong Kong has been able to provide an acceptable range of public and social services without blunting the edge of its competitive efficiency by increased taxation. In 1974 a study group had been able to describe, with justification, social services and housing as 'abysmal'. Twenty years later, although not immune from criticism, Hong Kong social provisions were among the best in Asia. Despite occasional clumsiness, and a lingering 'nanny-knows-best-dear' syndrome, personal liberty was safeguarded. And, which worried liberally-minded observers exceedingly, without more than the vestiges of democratic representation. Governments in the colony have maintained that their peculiar system of consultation through osmosis works, and that, since they do not have to placate special interests in order to obtain votes, they can take a cool and unprejudiced view of the community's needs. On the question of social policy at least it must be admitted that the theory remains to be dis-proved.
'Corruption, the most infallible symptom of
constitutional libertyn'
Edward Gibbon
Nothing initiated by Sir Murray Maclehose proved more rapidly effec-tive than his vigorous action against corruption. Institutionalized in Hong Kong since the earliest days, corruption had been an indispens-able mechanism to smooth the functioning of a society where the only unifying factor was the hope of profit. In an established society like that of Britain, corruption could take less blatant forms. The award of honours and the allocation of offices could serve insttad of cash, and stimulate the innate -and real enough -loyalty of the community to the state. In the twentieth century the system was greatly expanded: a whole new order of chivalry, that of the British Empire, was invented to spreaaprevi.usly restricted honours downward throughout the com-munity. For a short time, these were more or less openly for sale while David Lloyd George was Prime Minister -he himself ended his days
49o A HISTORY OF HONG KONG
as Earl Lloyd-George and Viscount Gwynneth of Dwyfor -but today these affairs are managed more discreetly (yet only the very innocent believe that the chairman of a public company which gives large sums of other people's money to a political party will not, when that party is in power, be offered some reward). In Hong Kong the system was slightly adapted. Prominent citizens, for public service (which can mean either the expenditure of time and energy, or cash), were rewarded with the appropriate button of the modem mandarinate -Member, Officer or Commander of the Order of the British Empire, or even with the rare peacock feather of a K (Knight) for outstanding contri-butions. It was entertaining to note, as the date of retrocession . to China grew near, how some of these often dearly-bought imperial dignities were quietly abandoned, but for many years the system worked well enough, at least on the higher levels. On the streets, however, there is no substitute for cash.
Unease about police corruption had been expressed since the incep-tion of the colony, but after the Second World War the practice settled into a generally accepted and comfortable pattern. Apart from the official hierarchy of the force, police on the beat were controlled by staff sergeants, equivalent to senior warrant officers in the army, and by the station sergeants working under them. With very few exceptions these Chinese officers were all profitably engaged in a highly organized system of corruption. They acted as 'caterers', arranging liaisons between their subordinates and the criminals and collecting payment for their services. These considerable sums were then distributed in agreed proportions among their subordinates and superiors. In return the heads of criminal fraternities and gangs undertook to settle their own differences and to allow the ordinary citizen to go about his business. This system sometimes aroused horror among newcomers -the first new post-war Commissioner exclaimed that he had 'never seen such wide-spread corruption anywhere' -but its convenience prevented any drastic action from being taken. An anti-corruption office was established, but since this itself was part of the police force organization its members were not encouraged to manifest too indis-creet an enthusiasm for their task.13
Wesbninster first showed interest in the subject on 10 March 1960, when Ernest Thornton asked whether the Colonial Secretary would consider appointing an independent inquiry to investigate bribery in Hong Kong, only to receive the short answer: 'No, sir.' Thornton kept at it, and elicited the information that the Standing Committee on
THE GOLDEN YEARS
Corruption, which was said to assist the Governor, had met only eleven times since 1957. He also produced evidence from a number of sources that the problem did in fact exist. Mr Justice Charles had said, 'Corrup-tion is all too prevalent in the colony'; Mr Brook Bernacchi, speaking for the Hong Kong Reform Club, that 'Corruption is bad in every big city, but Hong Kong is one of the worst in the world'; the China Mail commented, 'Corruption is the millstone around our nec,k.'
Thornton did not get far in his crusade. Edward du Cann, Conserva-tive Member for Taunton, assured the House: 'It is plain ... that all the leading businessmen and Civil Servants are scrupulously honest and above suspicion.' lain MacLeod, the Colonial Secretary, agreed, adding that the Governor, 'a man of very wide experience in these matters ... does not feel that there should be such an inquiry'. There must have been many in Hong Kong who were delighted with that news.
It was not until the official Committee ofslnquiry on the 1966 riots began to take evidence that the subject was forced into the limelight. Very uncomfortably, the Commissioner, Henry Heath, was obliged to admit the police to be corrupt, but not more corrupt than other parts of the government; in any case, he argued, the police were different, since detectives needed to take bribes if they were to be able to pay their informers. The committee was not meant to discover such inconvenient facts, especially when the police force behaved so well during the following year's disturbances. They were the colony's heroes, now the 'Royal' Hong Kong Police Force, and such distinguished sleeping dogs should be left to gnaw their illegal bones in peace. Criticisms were rejected with a note of hysteria, since to criticize the colony's defenders was to jeopardize the security of the community. The Colonial Secre-tary, Sir Michael Gass, who had spent his career in West Africa, remote from even such democratic institutions as obtained in Hong Kong, made his unprecedented public attack on Mrs Elliott of the Urban Council. It was assumed too that only the lower ranks, all Chinese, were corrupt, while the more senior, expatriate policemen were honest; they were, after all, British.
The view from the Palace of Westminster was more accurate. No one cared to contradict James Johnson, the reliable Labour Member for Rugby, when he stated on 27 February 1967: 'Only last week the Honourable Member for Wanstead and Woodford [Patrick Jenkin] and I joined forces in referring to the widespread allegations of corrup-tion of the police. These allegations have been made by too many
A HISTORY OF HONG KONG
people for my comfort -people in all levels of society, of all colours, and in all positions. I, and others, have discussed the matter with the Governor, who was most helpful. I am aware of his difficult position ... but I ask my honourable friend seriously to consider setting up a commission of inquiry into the affairs of this most unusual colony.'
Johnson may have been thought by some cynical Conservatives to be making party points, but Patrick Jenkin, a Conservative MP himself,and one of acknowledged integrity, who later became Secretary of State for Social Services and for Industry, was a man whose apprehen-sions should have been taken seriously.
The colony managed to avoid its commission for a few years yet. Bribery was taken a good deal less seriously there than in Britain -this was before the great exposures of 1972, which claimed among many other casualties the career of the Home Secretary, Reginald Maudling -and it was assumed that corruption existed only at the lowest of levels. It might often even serve a laudable purpose, for complaints about junior staff (hospital employees and receptionists being frequently complained of) were often of mere incivility, which could be remedied by a dollar or so of tea money.
Colonial complacency was shattered only when in 1973 it was dis-covered that one of the most distinguished veterans of the riots, Chief Superintendent Peter Godber, had been on the take to the extent of several million dollars. The discovery was made as a result of a clean-ing-up operation begun by Commissioner Charles Sutcliff, who arrived in 1969 and rapidly began weeding out the staff sergeants, virtually all of whom left in some precipitation to a comfortable retirement. Two years later, Sir David Trench, who had shown little sympathy for crusaders against corruption -when questioned on British television on the subject he 'sat before the cameras as rigid as a totem-pole, brusque and non-committal' -was replaced by Sir Murray Maclehose, with a brief for making changes in the colony. The inquiry into the Godber case led Sir Murray to conclude that the police could not be relied upon to be sufficiently energetic and impartial in investigating allegations made about their own colleagues, and that an independent anti-corruption unit was therefore needed.
The Independent Commission Against Corruption (ICAC), estab-lished by Sir Murray under the leadership of Sir Jack Cater, quickly proved embarrassingly successful. Cater, a quietly impressive and dedi-cated officer, was reinforced by Sir John Prendergast, who had a remarkable record of colonial policing in Palestine and Africa, where
.THE GOLDEN YEARS
he won a George Medal for his work in Kenya during the Mau Mau troubles of the 1950s. Having served previously in Hong Kong as Director of the Special Branch, Prendergast brought valuable police experience to supplement Cater's determination.
The team was, if anything, too effective. Policemen were arrested in veritable droves -fifty-nine sergeants from a single division, one Senior Superintendent dead by his own hand, and three British Super-intendents in custody -as investigations revealed highly organized corruption on an enormous scale. This was too threatening, and the police took matters into their own hands, staging a mass meeting which resulted in the offices of ICAC being stormed and members of staff assaulted.
Faced with the fact that corruption was endemic, and that investi-gations could not be pushed further without risking the collapse of the whole system of public order, the Governor had to retreat, and allowed an amnesty for all but the most serious offences. Fighting a rearguard action as best he could, Sir Murray also warned that any future misde-meanours would be severely d('.alt with. It took some years for the dust to settle, but the results seemed not unsatisfactory. Nigel Cameron commented:
It would appear from the statistics that corruption in the police force has greatly diminished. To what degree the figures reflect a general lessening in the scope of corruption is an open question. Certainly large-scale syndicated corruption has been vanquished, but just as surely small-scale activities have not. 14
The latest statistics are equivocal: prosecutions of police officers now form an increasing proportion of the whole, and scandals continue.15
1991 1992
Total prosecutions 314 3o3 Of which public sector: 106
Police:
49
52
50
8 9
23
The ICAC commissioner Bernard de Spelville compared the situation to the 's.histicated rackets of the 1960s and 1970s'. That traditional resource of embarrassed officialdom, a committee (the Anti-Corruption Strategy Steering Committee), was formed to review the problem. Widespread fears of a deterioration in standards after 1997
A HISTORY OF HONG KONG
were given substance by an incident in March 1995 when a Chinese gunboat entered Hong Kong territorial waters to kidnap two HongKong men. A pretence by the Hong Kong government that it never happened (the Annual Review's calendar for the days in questionmerely records, ironically enough, that 'The Secretary for the Treas-ury, Mr Donald Tsang, visits Beijing and Tianjian in a series of visits between Hong Kong and China aimed at increasing mutual under-standing by Chinese and Hong Kong government officials of each other's systems and ways of life') led to great unhappiness among the police, who recorded their 'fear that we have already lost control to the People's Republic of China authorities'. Senior officers, voting with their feet, began to resign. More suspicion was generated by the handling of a seventh International Anti-Corruption Conference in Beijing in October 1e995, which one journalist described as 'a mockery, a triumph of platitude over substance' .16
Much underhand activity continues to be associated with drugs.Serious offences -which do not include 'simple possession' of heroin or opium -are mounting, while the seizures of narcotic drugs are not:
Narcotics Serious Persons
seized (kg) offences arrested
61e21e993
3,506 4,m1e55
1e994
1995
380
4,61e8 5,224
5,701 6,403
By contrast, in 1989, with 5,040 serious cases reported and 6,050 arrests, over 1e,1e00 kilograms of narcotics were confiscated. That a degree of collusion with Triad dealers is possible was suggested by the trial of the senior narcotics officer in the Customs and Excise Department, Senior Inspector Cheung Ying-lun, in 1990 on chargesof smuggling fifty kilos of heroin into Australia. With other regional jurisdictions punishing drug traffickers with death, it is hardly surpris-ing that they find Hong Kong's more humane criminal code preferable.
Losing nerve
The most visible sign that Hong Kong was ceasing to be a British colony and becoming a Chinese society was not a result of government action but of spontaneous commercial change. By the time of Murray
THE GOLDEN YEARS
Maclehose's appointment the energetic Shanghainese who fled their city in 1949 had rebuilt their fortunes and begun to emerge as leadingplayers in the Hong Kong financial world, often supplanting older Chinese magnates. Of these newcomers the most prominent and suc-cessful was Sir Yue-kong_ (Y.K.) Pao, who began his shipping enter-prise in 1955 with a single small vessel, and within twenty years had built it into a twenty-million-ton fleet, before diversifying into a wide variety of quoted investments. The other great entrepreneur, Li Ka-shing, was not from Shanghai, but was a native of Chiu Chow, in Guangdong. He had begun his plastic-flower manufacturing business in 1950 at the age of twenty-two, and by the 1970s was also in a position to make himself felt.
These 'new men' were cast in a different mould from previousChinese magnates such as Sir Robert Ho Tung or Sir Kenneth Fung, who had made a point of being closely associated with the colonial government. If Li or Pao needed government action they could, and did, go direct to the heads of the British or Chinese governments. Sir Yue-kong gave an example of this during the meetings between Mar-garet Thatcher and Deng Xiaoping in Beijing in September 1982. Kevin Rafferty reported: 'Pao seemed to go everywhere . . . "He behaved as if it was the Y.K. Pao benefit show, with Thatcher and Deng reduced to supporting roles," chuntered a still aggrieved Britishofficial.,nm
Parallel to the expansion of Hong Kong Chinese businesses came a notable increase in mainland investments as, encouraged by Deng's economic reforms begun in 1978, Communists (nominal Communists, at least) took advantage of the opportunities offered by capitalism. One of these groups, the China Merchants' Steam Navigation Co., now owning some forty different Hong Kong enterprises, is something of a curiosity. The company dates from 1872, when it was founded as one of Li Hung-chang's initiatives in order to provide Chinese compe-tition for the foreign-owned companies -at that time mainly Russell's, Jardine's and Swire's. Li's venture, funded by compradores and mer-chants, was immediately successful; Russell's was bought out, and even Jardine's considered selling their interests, as the CMSN became the biggest operation of its kind in China. Only modestly less venerable was the Bank of China, established in Shanghai in 1912, which survived the Japanese invasion and the civil war only to have its entire gold stock clandestinely removed to Taipei by Chiang Kai-shek in 1949. The Bank of China, professionally managed from its splendid new
A HISTORY OF HONG KONG
building, with over three hundred branches, now accounts for more business in Hong Kong even than the Hongkong and Shanghai Bank, and in May 1994 became the colony's third note-issuing bank.
More recently the China Resources Company, which acts as rep-resentative of China's exporters, and the China International Trust and Investment Corporation (CITC), Beijing's investment company, have expanded rapidly. CITIC has hived off its major investments into CITIC Pacific, publicly quoted on the Hong Kong Stock Exchange, and therefore subject to capitalist monitoring. Now characterized as a 'red chip', CITIC Pacific's strategic holdings include shares in the Eastern Harbour Tunnel and Hong Kong Telecom; in April 1996 the company bought enough shares in Hong Kong's Cathay Pacific airline to remove control from the previous British owners, Swire's. At the same time the China National Aviation Company (CNAC) took a major stake in the smaller Hong Kong company Dragonair. While such important developments are public knowledge, even the Chinese government -perhaps especially the Chinese government -cannot keep track as enterprising mainland Chinese have set up a proliferation of companies registered in the colony, without wishing to report their activities to their own regulating authorities. More officially, Chinese state enterprises use the Hong Kong stock market to raise funds, amounting by 1996 to some �Gi ,400 million; syndicated institutional loans account for much more. Altogether it is estimated that 80 per cent of all China's capital requirements are funded through Hong Kong.
As the new Chinese enterprises from both within and without the colony expanded and began to show their readiness to muscle in, some of the old-established bongs suffered what appeared to be a collective failure of nerve. The British had concentrated their commercial power within a small group of taipans: the Hongkong and Shanghai Bank, Hutchison's, Jardine Matheson, Butterfield and Swire, Dairy Farm and Wheelock Marden all had interlocking directorships. Sir Douglas Clague, Taipan ofmHutchison's, was on the board of the Hongkong and Shanghai Bank, Dairy Farm, Wheelock Marden, the Cross-Harbour Tunnel and a Steward of the Jockey Club; J .L. Marden, of Wheelock Marden, was on the board of Dairy Farm and Hutchison's as well as leading his own company; Michael Herries, when Taipan ofJardine's, was also a member of both the Executive and Legislative Councils, as well as being on the board of Dairy Farm and the Hongkong and Shanghai Bank. From very similar social backgrounds -Herries, like
THE GOLDEN YEARS
the Keswicks and Swires, was an Etonian, and almost every Taipan had, as a matter of course, been to either Oxford or Cambridge -meeting at the Hong Kong Club, the Yacht Club and the Jockey Club, such men formed a closely-knit circle who could co-operate easily, both together and with senior government officials.
The first sign that this group might be threatened came in 1980, when Li Ka-shing made a move on Hutchison-Whampoa. Hutchison's had been established in docks and shipping since the 1860s, and expanded under the vigorous leadership of Douglas Clague, 'a natural wheeler-dealer', 18 into one of the biggest of the bongs. Clague financed the Cross-Harbour Motor Tunnel, which when opened in 1972 changed the whole balance of Hong Kong life by providing road access between Central and Kowloon. But the 'random and opportunistic'19 expansion proved too rapid to sustain, and the Hongkong and Shanghai Bank was forced to arrange a reconstruction of the company, which included a merger with the Whampoa Dock Company (the Hong Kong and Whampoa Dock Company was a merger of Lamont's Aberdeen dock and Cowper's of Whampoa, a survivor of the original Canton trade), an even more venerable institution. As part of the reorganization the Bank had taken a large shareholding, and on completion offered their stake, on advantageous terms, to Li, one of their rising customers. 'Hutchison was sold far too cheaply. It was a steal,' its former Chief Executive W.R.A. Wyllie complained, but the Bank wanted to see a 'long-term and constructive holder'.20 With Li, this was exactly what they got. Hutchison's was restructured under the effective command of Simon Murray, previously with Jardine's. It is very much a sign of the times that this company, now one of the largest on the HongKong Stock Exchange, is run by a combination of Chinese ownership, working together with a formal and responsive management structure. Li's holdings are now widely spread, with powerful Hong Kong prop-erty interests, a controlling minority of the Hong Kong Electric Com-pany and extensive Canadian investments, capable of producing annual profits of US$1,ooo million. Although probably the most successful and powerful capitalist in Hong Kong, Li has maintained close and amicable relationships with the Chinese authorities; he is generous to mainland Chinese universities to a degree that would make impover-ished Oxford and Cambridge senates lick their corporate lips, and in
1995 donated a handsome new building to house the future Chinese government offices in Hong Kong.
Another pillar of the British establishment, Wheelock Marden, fell
A HISTORY OF HONG KONG
to Sir Yue-kong Pao in 1985. As part of the transaction 'Sir Y.K.' inherited part of Hong Kong's imperial past, the Lane Crawford department store, more ancient than Harrods, founded by one Mr Lane, formerly a butler in the East India Company factory at Canton, who migrated to Hong Kong in the 1840s to found the business with Mr Norman Crawford. Marden's was a much more recent arrival, founded in 1946 by George Marden, 'one of the toughest characters on the China coast', previously an employee of the Chinese Maritime Customs.
Even the greatest of the hongs seemed in danger after control of the Hong Kong and Kowloon Wharf and Godown Co. was seized unexpectedly by Sir Y.K. in 1979. The Wharf Company had been founded by William Keswick in 1889, with a constitution designed to secure permanent board control to Jardine's, and carried with it a. highly visible part of Hong Kong's history in the shape of the Star Ferry and tramway systems. That it should be taken by a newcomer, and a Chinese newcomer at that, was bad enough, butJardine's found it particularly injuring that Pao's coup had been backed by the Hong-kong and Shanghai Bank, their ancient ally. When the following year it became clear that Li Ka-shing also had made substantial inroads into both Jardine's own share capital and that of their quoted associate Hong Kong Land, bringing his holding to nearly as much as that of the Keswick family, decisive action seemed necessary. A truce was arranged, shares were repurchased and an ingeniously defensive cor-porate structure devised which made it difficult for an unwelcome bid to succeed.
In reinforcing their defensive strategy Jardine's attempted to extend their interests outside Hong Kong. The most important acquisition was intended to be that of a minority stake in the New York investment firm Bear Sterns. This was an odd decision for such an exclusively Anglo-Scottish firm as Jardine's, since Bear Sterns was not one of the traditional East Coast 'Wasp' investment houses (although it had the magnificent address of '1 Wall Street'), almost all its partners being Jewish or Irish. Unhappily, the project proved a major miscalculation, and Jardine's shareholders received a nasty shock. In 1989, after it had proved necessary to cancel the deal, they were informed that HK$50 million would be needed to terminate the transaction. The following year they learned that the sum had risen to US$57 million -or about eight-fold -a significant loss even to a firm the size ofsJardine's. As happens at such times a rapid turnaround of managings
THE GOLDEN YEARS
directors, and even chairmen, ensued. The Taipan, David Newbigging, was succeeded by Brian Powers (an American, which tells one some-thing aboutJardine's anxieties to branch out into new territories}, who lasted for less than six months. Henry Keswick, earlier replaced by his brother Simon as Chairman, resumed that office and things settled down.
Since then progress has been regular rather than exciting; after four years of uncovered dividends, profits have been more reliable, but successful diversification has remained elusive. American earnings have improved, but those in Britain have been depressed by a dis-appointing investment in Trafalgar House. Hong Kong remains the most important source of Jardine's earnings -half the total assets are deployed there, providing two-thirds of the pre-tax earnings. The Hong Kong results include the very modest investments in China, Jardine's remaining wary of too close an involvement with the People's Republic (run by 'a thuggish Marxist-Leninist government', according to Henry Keswick21}, and taking the view that Japan, Korea, Singapore, Taiwan and even Indonesia offer better prospects.
Although Jardine's management was anxious to play down the change, insisting that their presence in Hong Kong would continue to be of the greatest importance (their shares and those of their associated companies represented some 12 per cent of the total value of securities quoted on the Hong Kong Stock Exchange), the decision to move the registered office to Bermuda, taken in 1984, was only the beginning of a corporate disengagement; in the 1990 Report and Accounts, for the first time, the head office ofJardine Matheson ceased to be shown as being in Hong Kong. No reference to this change was made in the Chairman's report, the address of the head office simply being omitted from the front page, and the auditors shown not as the Hong Kong branch of Price Waterhouse, but the London office of that firm; simi-larly, the company registry was moved from Hong Kong to Bermuda. The Chairman, Henry Keswick, explained only that: 'Your Board has concluded that it is not in the Company's or its Shareholders' interests that its principal regulatory centre should remain in Hong Kong when constitutional change is impending and when it is vital to maintain the confidence of trading partners and others on whom the Company's success depends.' This would result in 'the Company's quotation on the London Stock Exchange becoming its primary listing for regulatorypurposes'. The Managing Director, Nigel Rich, was perhaps more forthright when he wrote that 'freedom from politically-influenced
A HISTORY OF HONG KONG
regulation' was 'the crux of the matter'. In 1994 the last statutory link with Hong Kong seemed to be broken when even the secondary listing of Jardine Matheson shares was transferred to the Singapore Stock Exchange. Since then a remarkable about-tum has taken place. Early in 1995 a formal apology was made to China for having moved to Bermuda without discussion, and this was succeed by a decision to embark on a joint venture with the China National Aviation Corpor-ation, owned by that same 'thuggish' government.
Such concern about the commercial future of Hong Kong as Jar-dine's had shown was not shared by the other remaining great British Hong,John Swire and Sons. Well protected by restricted voting shares, Swire's had no reason to fear a contested bid even if their trading record had been less successful than it has proved. As one of Jardine Matheson's earliest competitors in the China trade, Swire's had always shown a positive attitude towards China, exemplified by their actions in 1925. When Sir Cecil Clementi developed his plan for provoking the Canton pickets in order to enable the Royal Navy to stage an intervention, Jardine's, with some reluctance, agreed to co-operate, but Swire's declined, expressing themselves 'unwilling to take the risk of any action in Canton that might reflect to prejudice its interests at other ports in China'.22 In the years after the Second World War John Kidston Swire, the grandson of the founder and then Chairman, took the considerable risk of backing the embryonic airline that developed into Cathay Pacific.
One Hong Kong institution that has shown little indication oflosing its nerve, in spite of some worrying moments, is the Hongkong and Shanghai Banking Corporation. London bankers were apt to regard 'Honkers and Shaggers' with patrician scorn as a stolid bank, staffed by irreproachably honest and industrious Scots, but unsophisticated and inept in the world of international finance. Those who did so have had to eat their words. As the nearest thing Hong Kong has to a central bank, 'the Bank' has had to assume much of the responsibility taken in Britain by the Bank of England in corporate rescues and restructurings, and acts as a clearing bank and a. lender of last resort. These activities have assisted the management to develop skills in crisis control and clearing-up operations, skills which proved useful after the takeover of Marine Midland Bank of New York. This Buffalo-based bank had undertaken a rash expansion in the 1970s which brought it to the edge of collapse. The Hongkong and Shanghai Bank's initial 51 per cent stake, taken in 1980, had later to be increased to
�POTHE GOLDEN YEARS
full ownership, as further bad debts were accumulated. The unravelling of these, and of a disappointing venture in Australia, proved a costly exercise for the bank, but were brought under control; the experience thus gained came in useful in sorting out the bank's latest acquisition, that of the Midland Bank in Britain.
That undertaking represented a massive diversification from Hong Kong. The Midland was a British clearing bank, one of the 'Big Four' with branches in every High Street in the country -1,600 of them, staffed by 57,000 employees serving four million customers. The Hongkong Bank had previously dipped its toes in London waters in buying Anthony Gibbs, an ancient but dull merchant bank, and James Capel, a noted firm of stockbrokers, but the purchase of the Midland was a much more significant investment. Until recently considerably bigger than the Hongkong Bank -in 1972 its assets were three times as large -the Midland has since declined sadly. Extravagant loans and investments were made both in developing countries and in the United States, with the monstrously ill-judged purchase of the Crocker National Bank. Attempting to recover from these misfortunes, Midland changed to a policy of making domestic loans, which only compounded previous errors by creating exposures in a declining property market. Combined with the losses caused by the succession of business failures that characterized the British economy in the 1980s, a takeover became inevitable.
Although the prize was disputed with another British clearing bank, Lloyds, the Hongkong Bank had established a lead by the purchase, four years previously and at a generous price in the circumstances, of just under 15 per cent of Midland's equity, and set in motion a limited rationalization of the two banks' businesses. It is a tribute to the Hong-kong Bank's reputation that a feeling of relief was noticeable in the City of London when the full takeover was announced; Midland would be,
it was correctly assumed, in safer hands. Interestingly enough, both the move to London and the acquisition of the Midland Bank were discussed privately beforehand with the Chinese government.
Inevitably, so very large a diversification changed the nature of the Hongkong and Shanghai Bank's business. Still with a solid Hong Kong base, about 40 per cent of net assets being held in the colony and shares listed on the Hong Kong exchange as well as in Throgmort1;m Street, the real growth has been experienced elsewhere, as the old Midland Bank has been turned round. From a mere �G321 million contribution in 1992, the UK business in 1995 made profits of �G1,127
A HISTORY OF HONG KONG
million from assets rather less than doubled; the Asia-Pacific region (excluding Hong Kong) did even better -profits up nine-fold in the same period. With the troubled American business showing a steady recovery, the Hongkong and Shanghai Bank was by 1996 a well-diver-sified international financial institution, one of the largest in the world, with more than three thousand offices in seventy-one countries, in which constituent parts were able to benefit from the opportunities offered by others. The bank is also, according to the ratios of risks to capital resources prepared by the Bank for International Settlements, the best-cushioned bank in the world, nearly two full points better than the next best, J.P. Morgan, and streets ahead of the Deutsche Bank or any Japanese institution. Hong Kong, its critics claim, and not without justification, is primarily nothing more than a financial centre, and one in which commercial interests are paramount; but the honourable and so-far-successful history of the Hongkong and Shanghai Bank is an achievement that any society would be proud to claim. In Hong Kong itself, however, the unquestioned title of 'the Bank' will pass to the Bank of China.
All these developments, constitutional, social and financial, begun in the I 970s and continuing into the I 990s, succeeded in moving Hong Kong a considerable way from being a colonially administered society to an independent city-state, developing its own policies and something resembling a genuinely national identity.
17
RECESSIONAL
'Now, when you say that, you don't have to go into, to say, well now, predsely what is the nature of this link and the nature of the law and so on. 'Margaret Thatcher, BBC World Seroice interoiew, I November 1983
When politicians, especially those rarely stumped for an answer, are reduced to incoherence, it may be assumed that they are deeply embar-rassed. Mrs Thatcher, when invited to say whether she hoped to keep a British presence in Hong Kong after 1997, found herself in such a situation.
As the retrocession to China approached inexorably the question of Hong Kong's future began to be raised. Suggestions have been made that if no approach to China had subsequently been initiated the whole question might have been allowed to remain unasked, with nothing being done to disturb the existing order. Hong Kong, it was said, was too valuable to China for her to risk an upheaval there. William Rodg-ers, Labour Minister of Defence in 1975, spoke of an 'unarticulated understanding that the status quo should remain'. Some optimists thought that an extension of the New Territories lease might be negoti-ated subject to a recognition of Chinese sovereignty over the whole territory; after all, something similar was being allowed in Macao. Dr Peter Wesley-Smith, an authority on Hong Kong's constituti.on, pointed out how this might be elegantly achieved simply by accepting China's contention that the previous treaties were invalid, in which case the lease otherwise due to expire in 1997 did not legally exist.1
A HISTORY OF HONG KONG
Such optimism was not warranted by the facts. Back in 1971 Zhou Enlai had made it clear that 1997 was to be the .watershed',2 and Edward Heath had confirmed that China would expect the territory to be handed back on that date. By 1978, when less than twenty years remained before the New Territories lease expired, practical considerations were urged in favour of clarifying the future. Hong Kong bankers -both domestic and American -were concerned about the security of loans advanced on what were becoming ever-shorter-term leases, granted under the head Crown lease of the New Terri-tories negotiated in 1 898 and due to expire in 1997. At their request a meeting with the Governor was convened, as a result of which it was decided that the Chinese government should be approached. Some experienced men in the civil service argued that, since opening the subject indicated concern -a poor negotiating tactic according to well-understood Chinese tradition -it would have been wiser to wait for Beijing to make the first move.3 This opinion was supported by Dr
T.L. Tsim in his introduction to 'The Other Hong Kong Reportc1989':c
If Britain did not raise the question of the ninety-nine-year lease with China, so far as Beijing was concerned, it would have been all right to carry on as if nothing would happen. If foreign banks were apprehensive about granting fifteen-year mortgages to prop-erty developments in the New Territories after 1982, the Bank of China could take the lead in offering mortgage loans to proper-ties north of Boundary Street and that would be that. The Chinese leaders have the ability to live with a problem without trying to seek a solution before conditions are ripe.4
It is not easy to see how this could have worked in practice. The Bank of China would never make such a move without the approval of the Chinese government, nor could the British government assume responsibility after 1997 without a constitutional amendment.
Whatever the merits of this argument Sir Murray Maclehose had, at the end of 1978, received an invitation to Beijing -and that from the Foreign Trade Minister, which in view of Britain's continuous struggle to increase the still unsatisfactory sales to China was an oppor-tunity not to be missed, coming as it did at a time of great importance in the development of China's international relations.
On I January 1979 diplomatic relations had been established
RECESSIONAL 5o5
between the United States and the People's Republic. This entailed renunciation of the American defence agreement with Taiwan and the termination of diplomatic relations between Washington and Taipei; the United States formally recognized 'the Government of the People's Republic of China as the sole legal government of China'. By that time Taiwan could manage quite satisfactorily without American patronage. Chiang Kai-shek's son, Chiang Ching-kuo, who had succeeded irl 1975, had begun to convert Taiwan into a more reputable democracy, as well as an economic success, enjoying a growth rate of 20 per cent per annum; but a residual feeling of responsibility for helping Taiwan in the future remained a powerful force in American policy.
For his part Deng Xiaoping had disposed of those last relics of the Cultural Revolution, the 'Gang of Four', including Mao's widow, and was able to initiate more reasonable economic policies. Among these was the establishment of Special Economic Zones, in emulation of a Taiwanese original. These were in the maritime provinces of Guang-dong and Fujien -two in the old. treaty ports of Swatow and Amoy, and one each just outside Macao and Hong Kong. The most important of these, Shenzhen, is immediately over the border from the New Territories and has developed into the provincial powerhouse, emulat-ing the adjacent colony and becoming rapidly indistinguishable from it. The intention was that the Special Economic Zones would develop as centres of foreign investment as had the more successful of the nineteenth-century treaty ports.
In these circumstances the Chinese leaders did not wish to damage their prospects by upsetting investors or by interrupting Hong Kong's valuable contribution to China's improving prosperity. Sir Murray Maclehose was therefore affably received: as the first formal visit from a Governor of Hong Kong while still in post this was an historic occasion.5 Nor was the first Chinese reaction to the subsequent British approach, made in March 1979, discouraging. The British diplomats in Peking, led by the Ambassador, Sir Percy Cradock, joined by Sir Murray, attempted an indirect approach concentrating on the practical question of new leases. This was, the Chinese declared, a matter of detail to be settled in future negotiations; in the meantime, Deng himself assured the British, investors in Hong Kong should 'put their minds at rest'. This assurance was widely proclaimed on Sir Murray's return 1:0 Hong Kong, but the accompanying warning that any settle-ment 'should be based on the premise that the territory is part of China'6 was less well disseminated. Given the unmistakable signals
A HISTORY OF HONG KONG