FO371-46257 — Page 89

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3. H.M.S. Duke of York was due to leave for Manila and Sydney the same evening, and I went ashore, just before her departure, with Admiral Harcourt and Mr. Keswick. Admiral Harcourt very kindly put me up at Government House, which the Japanese authorities had put into excellent shape, although a legacy of certain rooms in the Japanese style may become of problematic value. I had seen from the aircraft that a good deal of damage had been done in Hong Kong, and there are a number of sunken hulks all over the harbour. We actually landed at the Taikoo dockyard, which was very badly knocked about--the same applies to the Kowloon dockyard across the harbour-and proceeded through extensively damaged godown and labour residential quarters to the less-damaged business section of the town. There has been a lot of looting of the residential districts by the Chinese inhabitants and all wooden fitments have been removed for firewood.

4. The Secretary of State for War and his staff were staying with the commander-in-chief, and I had some conversation with Mr. Lawson, who made a cordial enquiry as to your well-being. I gave the Secretary of State some account of developments in Chungking, and he was particularly interested in the Kuomintang-Communist negotiations.

5. I am recording matters discussed in separate notes attached to this minute(') but some general observations may be of use. In general, I found that the navy had laid an excellent foundation on reoccupation and that the civil affairs people and other authorities have got to grips with their problems. Mr. Gimson and his team had made a gallant start in the period between the surrender and the arrival of Admiral Harcourt's task group. The Civil Affairs Department is shockingly understaffed, however, and cannot do more than meet problems from day to day, as they arise. At present most executive decisions except those of high policy are taken by a committee under the chairmanship of Admiral Harcourt's chief of staff (Captain Clifford, R.N.), which has a daily meeting attended by the chief Civil Affairs officer, Ministry of War Transport representative and repre- sentatives of the various service organisations in the colony. I attended the meetings of the committee during my visit and learned much about the problems, big and petty, which face these people, many of them amateurs in the realm of colonial administration. The team spirit is excellent, but lack of staff on the civil side must soon adversely affect efficiency.

The steps taken on the financial side to set up shop had, I felt, been markedly successful and I think the colony has a great chance to take a position in the Far East out of all proportion either to its size or to the amount the United Kingdom needs to contribute in the initial stage. If it can be shown that here is a soundly based, efficiently run centre, trade will flock there and Hong Kong will be off to a far better start than any Chinese port. To do this, present shortages must be remedied. I have already mentioned shortage of staff: other shortages are fuel and shipping and, of course, commodities to set up such manufactures as the island can undertake and the entrepot trade it has always had. I do not think food will provide a problem provided trade can be got going. These matters are more fully discussed in the attached notes; but I am sure there is a big opportunity here, and if I personally were so unfortunate as to have business interests in the Far East, it is upon Hong Kong that I would concentrate in my effort to get going again.

5th October, 1945.

() Not printed.

G. A. W.

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