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in respect of the period from the date of liberation

until the late summer of 1946. There will be no

objection to firms making arrangements at ones to

import supplementary supplies of goods in the above

categories or supplies of any other description for

re-sale (provided an import licence has been obtained),

though it should be added that in certain cases such

as food and textiles, they may not, owing to shortage

of supplies, find it possible to obtain any supplementary

quantities,

4. Internal distribution of supplies procured

by the Government will be entrusted to ordinary

commercial channels.

5.

It is necessary to establish exchange control

in Hong Kong as elsewhere. To make exchange control

effective, it is necessary further to introduce an

import licensing system on the general lines of those

in force in the United Kingdom and in all Colonial

territories.

6. all importing and distributing firms should

as soon as possible make the necessary art

to resume their full sctivities in order to ensure

continuity of the Colony's supplies. It is possible

that some commodities may still be subject to bulk

purchasing arrangements by the Government after

September, 1946. In that event the firme vill

notified in due course through Goverment channels,

Bad of suggested announcement,

The foregoing draft was prepared in the Colonial

Office and has not yet been discussed with other Departments

conce : ned. Do not repeat not anticipate any substantial

changes and should be grateful for your comments soonest.

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