\>U 
 
 If >13^ 
 
 (i 1949 
 
 BRITISH J NFORMATION SERVICES 
 
 Afi AS ENCY OF THE 
 
 REFERENCE DIVISION 
 
 January 1948 
 
 
 AdP 
 
 ! \ ^ . 
 
 CO ■' ' - 
 
 
 GOVERNMENT 
 
 7 f 
 
 
 \ 
 
 -i. 
 
 \ -s*- 
 
 ^ .i-; 
 
 
 / ''r. fo 612 
 
 /■ X^evised) 
 
 \ y- 
 
 HONG 
 
 rV ' ./ 
 
 The influence of Hong Eong upon progress in China 
 was expressed by the late Dr, Sun Yat-Sen, founder of the 
 Chinese Republic, v/hen he came to the colony in 1923 and 
 visited the University’, He said, 
 
 ”1 feel as though I had returned home, because 
 Hong Eong and its University are my intellectual 
 birthplace, I have never before been able to answer 
 the question properly, but nov; I feel I am in a posi-- 
 tion to ansv.’er it today. The question is fV/here did 
 I get my revolutionary and modern ideas from?f The 
 answer is «I got them in this very place, in the 
 Colony of Hong Eong*, I compared Houngshan (his 
 birthplace) v/lth Hong Eong, and although they are 
 only fifty miles apart, the difference of the govern- 
 ment oppressed me very much, Afterv/ards, I saw the 
 outside world, and I began to v/onder how it v/as that 
 foreigners could do so much as they had done, for 
 example, with the barren rock of Hong Eong v;lthln 
 seventy or eighty years, v/hile in four thousand years 
 China had no place like Hong Kong,*, Then the idea 
 came into my head, V/hy cannot v;e do the same thing 
 in China? V/e must imitate the same thing, V/e must 
 change the government before v/e can start anything* 
 V/ithout good government, the people can do nothing, 
 and in China we have no government, and v/ere miser- 
 able for centuries,,. My fellow-students, you and I 
 have studied in this English Colony, and in an 
 English University, We must learn by English exam- 
 ples, We must carry this English example of good 
 government to every part of China,*' 
 
 This m«t8rtaJ h flted with the Department of Justice, where the required registration statement of B.US. under 56 StaL 248-258 as ao agency of the 
 British Government Is available for Inspection. Regtetratlon does not Imply approval or disapproval of this material by the United States Government. 
 
 Nfiw York OfRces. 30 Rockefeller Plaza, New York 20, N. Y., Telephone Circle 6-5 1 00 
 Chicago 1, 360 North Michigan Ave.; Washington 5, D. C. 907 15th St. N.W.; San Francisco 4. 310 Sansome St 
 
 D 3 
 
2 
 
 IDG12 
 
 INTRODUCTION 
 
 Within less than a hundred years, Hong Kong, the British. 
 Grown Colony off the Southeast China Coast, was built up from the 
 headquarters of a few pirates and fishermen to a great center 'of 
 international trade. Its prosperity was based upon geography, 
 free trade, and the security of British rule, and it v;as undoubtedly 
 of great value both to China and to the Vi/estern nations. In 
 addition it became a cultural center, with students from all over 
 China and from other foreign countries studying at its University, 
 
 The problems of Hong Kong cannot be considered in iso- 
 lation from those of China, It has always been dependent on its 
 hinterland for the means of air and land defense and for its v/ater 
 supplies. The fact, also, that so large a portion of its population 
 is Chinese makes its political relations with China a matter of 
 primary importance. 
 
 HISTORY 
 
 The first real British commercial contacts with China 
 v/ere made at the end of the 17th century by the East India 
 Company, The Chinese, hov/ever, shov/ed little inclination to open 
 their country to foreign traders. Canton was the only port v.’here 
 any external -trade was allowed, and there the restrictions on' 
 residence and commerce seemed unbearable to Western merchants. 
 
 The British sought to obtain a position from v/hich trade could be 
 carried on v/ithout the insecujrlt^T- and inconveniences of the 
 factory area at Canton, The harbor at Hong Kong and its geograph- 
 ical position m.arked it as an excellent center for trade, and the 
 fact that it Yv'as an island meant that it could be defended by 
 the Navy, But the Chinese steadily refused to grant any facili- 
 ties for trade except those provided at Canton, 
 
 In 1839 v/ar broke out betv/een Britain and China, This 
 became knov/n as the "Opium Vvar", The import of opium into China 
 had been prohibited by Chinese imperial edict in 1800, but v/ith- 
 out any provision for enforcing the prohibition. Consequently a 
 large illicit trade sprang up in which both Chinese officials and 
 foreign merchants participated. Those Chinese officials who did 
 genuine IjT- wish to suppress the traffic sought to do so by measures 
 directed against the foreign traders rather than against the smug- 
 glers, They seized British and other foreign opium stocks in 
 Canton, and held the British community as hostages. The war which 
 followed this incident, however, was in reality the climax of a 
 long series of grievances on both sides arising out of the general 
 conditions of trade and China’s refusal to agree to diplomatic 
 intercourse for the discussion of these grievances. The Chinese 
 were defoc.ted, and the war ended in 1841, In the settlement, 
 the British obtained the cession of Hong Kong, still a desolate, 
 rocky area, v/hich had been used as a base for British naval and 
 

 
- 3 - 
 
 ID 612 
 
 
 military operations. The cession was confirmed by the Treaty of 
 Nanking in 1842 which stated that it v/as "obviously necessary and 
 desirable that British subjects should have some port v/hereat 
 they may careen and refit their ships when required, and keep 
 stores for that purpose". 
 
 Other important provisions in the Nanking Treaty in- 
 cluded the opening to foreign trade of the ports of Canton, Amoy, 
 Foochov;, Ningpo, and Shanghai; the appointment of Consular Officers 
 to be on an equal footing with Chinese officials; and a uniform 
 import and export tariff. All these conditions were immediately 
 made available to the traders of other European countries and of 
 America, The only mention of opium v/as the assessment of an in- 
 demnity of approximately half the value of the stocks seized by 
 the Chinese, and the provision for repayment. No provision v/as 
 made for the legalization of the opium trade. 
 
 In 1860, the Kov/loon peninsula on the mainland was added 
 to the colony of Hong Kong for ciefonsivo purposes. It was ceded 
 at the close of a v/ar fought by Britain and Prance against China 
 who, besides ceding Kowloon to Britain, granted certain further 
 rights to all foreign traders. These included permission to travel 
 freely in the interior, to appoint diplomatic representatives in 
 Peking, and to send out Cliristian missionaries, whose converts v;ere 
 to have a legal guarantee of toleration. In 1898, following the 
 seizure of Kiaochao by the Germans and of Port Arthur by the 
 Russians, the British Government demanded and obtained a 99 years’ 
 lease of a larger strip of mainland, since known as the New 
 Territories, This area gives the colony a hinterland, some 18 
 to 20 miles in depth, and includ.es also some of the nearby Islands 
 and waters adjoining the harbor. 
 
 Almost a century of uninterrupted peaceful development 
 followed the Treaty of Nanking, On Christmas Day 1941, flong Kong 
 was captured by the Japanese, and remained in Japanese hands until 
 August 1945 when it v/as liberated by British naval forces. 
 
 AREA A.ID POPULATION 
 
 The Colony lies off the south-east coast of China, to 
 the east of the Pearl River estuary. It consists of the island of 
 Hong Kong (32 square miles), the peninsula of Kowloon (3-^ square 
 miles), Stonecutters Island (I- square mile), and the New Territories 
 (355 square miles), a total of 390-|- square miles). 
 
 The island of Hong Kong is 11 miles long and from two 
 to five miles wide. It is dominated by a range of treeless hills 
 that rise steeply to a maximum height of 1,823 fe^t, and contains 
 the capital city of Victoria, Kowloon peninsula, v/hich is fairly 
 flat, has developed as a residential suburb, and contains the main 
 industrial district. The New Territories are mostly sto.p and 
 barren, rising at one point to a mountain of 3,130 feet, Northv/est 
 

 
 1*0 1 
 
 <9 
 
 
 I 
 
 * 
 
 I 
 
 •1 
 
 
 \ 
 
 K 
 
 \ 
 
r 
 
 4 
 
 ID 612; 
 
 of this nountr,in lies the colony ^s largest area of cultivable land. 
 Villages exist v/herever cultivation is possible. The Nov/ Territor- 
 ies include 75 adjacent islands, nany of v/hich are uninhabited. 
 
 The climate is sub-tr opical , and is governed largely by 
 the monsoons . The v;intor is normally cool and dry, and the summer, 
 hot and hu'.iid. 
 
 The harbor, developed by the British into one of the 
 finest in the v/orld, lies betv/oon tlie island of Hong Kong and the 
 mainland. It is an almost landlocked sheet of v/ater, vcir^ring in 
 v.’idth from one to tliree miles. It is entered from the East by a 
 
 deep ;/ater channel a quarter of a mile v/ide, and, from the west, 
 
 is protcctv.;d by a group of islands tlirough v/hich a shallo\;vjr channel 
 gives access for coastal vessels. 
 
 In the middle of 1937, before the outbreak of the Sino- 
 Japaiijs^^ V.ar, th^ total population vc.s ostimatL-d at just ov...r 
 1,000,000, of v/hom all but 22,500 v/oro Chinese, A rough census 
 taken in 1041, v/hich shov/s cle^.rly the great influx of refugees 
 from China Ci..usod by the Japanese n’c.r, gave the figure of 1,539,337, 
 
 During tlu Japanese occupation of Hong Kong from 1941 to 1^-45, 
 
 the population fell to loss than t lire c -quarters of a millicn. 
 
 Many people escaped to Free China, and the Japanese deported large 
 numbers in an effort to reduce the population to a size that they 
 could feed. As soon as the British returned, another gros,t influx 
 of people from South China began, and by the end of 1946, the popu- 
 lation '.'as again in the neighborhood of 1,600,000, 
 
 Racially, Hong Kong is ovcrv/holrnlngly Chinese, Prom 
 earliest times it v/as a field of free immigration from China, and 
 the gatJ/.ay of overseas migration, in particular southwards towards 
 Malaya, Prosperity in Hong Kong has always brought an influx of 
 immigrants attracted by the prospect of better v/agos or more stable 
 conditions, v/hile depression has led to the departure of the unem- 
 ployed bacl-: to their native villages. Expansion v/as greatest in 
 the towns of Victoria on Hong Kong Island, and Kov/loon on the 
 mainland, Althoiigh the majority of the Chinese population is 
 m-igratory, the number of Chinese pei’manently settled in Hong Kong 
 has tended to increase, and the 1931 census figures shov/ed that 
 almost one-third of the Chinese population in Hong Kong ha.d been 
 born there, and v/ere, therefore, British subjects, though according 
 to the Fa.i:ional Lav/ of China tho^r v/ore also Chinese citiz<:.ns. 
 
 Before the v/ar, the Chinese held every kind of pos/.tion 
 in the colony. Their numbers included v/ealthy merchants, shipowners, 
 bankers, professional men and '..omen, sma.ll storekeepers, domestic 
 servants, and manual la.borers. Some 77,451 fisher-folk formed a 
 race apart, living aboard their boats, by habit self-sufficient 
 and migratory, and literally a floating population. 
 
I ^ 
 
 
5 
 
 ID 612 
 
 Of the non-Chinese inhabitants, tlie majority of British subjects in 
 Ilong Kong, other than members of the armed forces, were engaged in 
 cormnerce, banking, shipping, etc,, vi/ith only a small minority' as 
 civil servants or belonging to other professional classes. Other 
 Europeans and Americans were mostly business people, and non-perman- 
 ent residents. The Portuguese and Eurasians were, for the most 
 part, permanent residents, ccaning originally from Kacao, the 
 Portuguese colony 40 miles across the delta, and v;ere storekeepers 
 and clerical workers. A nuifoer of British Indians vi/ore included in 
 the troops stationed at Hong Kong; there was a Sikh contingent of 
 the police, and a small nui.ibor of Indian clerical workers and store- 
 keepers . 
 
 By the end of 1946, the great majority of the population 
 v/as still Chinese. There were, however, between six and seven 
 thousand pei’sons from Britain and the Dominions, about 2,500 Indians, 
 870 Portuguese (besides sor.ie 3,000 British subjects of Portuguese 
 race, many of whom had spent the war in the Portuguese colonj^ of 
 Ilacao), 2o0 Americans, about 250 stateless persons, and a sprinkling 
 of al];iost every nation and race in the world* 
 
 C70\^TNI.21KT 
 
 Before the recent v.?ar, the Colony enjoyed a limited 
 measure of self-government. The Governor represented the Crov/n, 
 and assisting him were an Executive Council of six official and 
 three unofficial members (one of whom v;a3 Chinese), and a Legisla- 
 tive Council of 17 members, nine official and eight unofficial 
 (three of whom were Chinese), appointed by the Governor. 
 
 A Secretariat for Chinese Affairs was in charge of the 
 interests of the Chinese population. The Secretary and three 
 Assistants were Europeans, the rest of the staff were Chinese, 
 
 The Europeans were cadets of the Administrative Service, and were 
 required to have a command of ehe Chinese language. Any Chinese 
 had direct access to the European officers, and*, the absence of 
 interpreters was important in placin.g applicants at theii’ case. 
 
 The Secretary v/as the special adviser of government on all questions 
 affecting the Chinese, and was a member of both Councils. Another 
 of his important duties v^us to expl^iin intended policies, and to 
 obtain Chinese cooperation. The Department gained the confidence 
 of the Chinese to such an extent that they came to accept it as an 
 arbiter in many disputes among themselves, even those of a family 
 nature . 
 
 Government policy was based upon the necessity of con- 
 ducting a Western administration amongst a predominantly Chinese 
 population, and tho Governor was in the position of governing by 
 means of compromise and persuasion rather than by the use of his 
 legal powers. The problems were mainly technical ones, of a city 
 management type amongst a migrant population. procedure v/as to 
 prepare all business, and resolve all conflicts as far as possible 
 
Digitized by the Internet Archive 
 in 2017 with funding from 
 Columbia University Libraries 
 
 https://archive.org/details/hongkongOObrit 
 
6 
 
 ID 612: 
 
 before legislation came up before the Legislative Council or for 
 public discussion. 
 
 One of the most important organs of the governiicnt v;as 
 a body of fifteen Chinese known as the District 'v/atch Committee, 
 Theoretically, it v/as a group appointed by the Governor to manage 
 a Chinese police unit knovm as the District Watch Force, In 
 reality, the members constituted the Governor’s informal but ver^’- 
 important advisory council on all questions affecting their 
 cor.riunity, and it became in effect the Chinese Executive Council, 
 Its meribors wore appointed from among the most responsible 'men in 
 the colony, \isually after long service on other committees. 
 
 Semi-official Chinese corir.iitteos dealt with charitable 
 and educational matters. The most important was the Tung V/ah 
 Hospital Cormiittee which, in addition to managing three hospitals, 
 performed many valuable social services among the Chinese, The 
 Chinese Public Dis piensar ies Com''ittoo played an influential part 
 in disseminating v^’cstorn ideas of hygiene and sanitation, Another 
 semi-official committee looked after 'the welfare of ”;oricn and 
 girls. Altogether, a large number of charitable organizations 
 were and still are in the hands of the well-to-do Chinese, 
 
 When civil government was restored on May 1st, 1946, the 
 Governor was instructed to consult with all sections of the commun- 
 ity in Eong Kong how they might best take a fuller share in the con 
 duct of their own affairs. After discussions lasting some six 
 months, recommendations were sent to the Secretary of State for the 
 Colonies, These received his general approval, and the plan of the 
 nev; constitution was published in July 1947, 
 
 This constitution has two main features. It establishes 
 a reprosento.tivo Municipal Council to take over as many functions 
 of the central government as are appropriate to it, and it modi- 
 fies the composition of the Legislative Council, 
 
 The Ilunicipal Council v;ill embrace the island of Hong 
 Kong, Kov'loon, and that part of the Now Territories known as Nov/ 
 Kov;loon, The remainder of the Now Territories is excluded for the 
 present because of its rviral character, Thoro will be thirty 
 members, ]?.alf Chinese and half non-Chinese, Two-thirds of the 
 members will be directly elected, and one-third will be no-nlnated 
 by unof icial bodies. The Council w'ill elect its ovm Chairman, 
 and English will be the official language. 
 
 In the Legislative Council, the official members v/ill bo 
 reduced ' from line to seven. There will still be eight unofficial 
 members, but only four will bo appointed by the Governor, 
 v/hilo tv.’o will be appointed by the Municipal Council, and one each 
 by the Chamber of Commerce and the unof icia.1 Justices of the Peace 
 
-4 
 
 % 
 
 
 il. •* 
 
 
 j 
 
 ' f 
 
 ; 
 
 
 
7 
 
 ID 612 
 
 That part of the Territories not under the I'unicipal 
 
 Council will remain, as hitherto, under the supervision of a Dis- 
 trict Officer. This officer is assisted and advised by villa£;e 
 elders, and by a Senior ' Advisory Council of the most senior of the 
 elders. Before the war, there was no clearly defined method of 
 appoint inr elders. They were often, in fact, self-appointed and 
 a^e, which is revej’ed in China, counted for a good deal. During 
 the Japanese occupation, some of the elders died, a fev/ collabora- 
 tecl, and a schism developed betw'een the older and the younger men. 
 
 It has now been found that the only method of choosing a council 
 of elders who could be regarded as representative, is by elections. 
 These were therefore held in 1946 and early in 1947, and it is in- 
 tended that tiie elders themselves shall elect a Senior Advisory 
 Council from among their number. 
 
 Colonial Development and Welfare yunds 
 
 Hong Kong receives £.1,000,000 ( (';4 , 000 , 000 ) from the British 
 Treasury under the Colonial Development and Vvblfare Act, for schemes 
 of social and economic development during the period 1946-56. A 
 wlclely representative cor.mdttee has been set up to plan how this 
 money shall be spent. Ilong Kong will also share in the schemes 
 adiainistered in London for the benefit of all the colonies, which 
 include such matters as highei’ education, research^ and meteorology. 
 
 TRADE AIKD INDUSTRY 
 
 Under British administration, Hong Kong grew to be the 
 entrepot for a great part of the trade of South China. Hucept for 
 light duties on alcoholic beverages, tobacco, and petroleum, it was 
 alv/ays a free port. Even in the difficult post-war period, restric- 
 tions on trade have been kept to a minimum. 
 
 During the 19th and early 20th centuries, American exports 
 to China were much less than British, and those of Japan were in- 
 significant. L’anufacturing in China virtually did not exist, 
 tariffs were lov;, and the export of Lancashire cotton textiles was 
 the backbone of British trade with China. This situation changed 
 in the pei'iod between the two world w'ars v/hen the Chinese Government 
 began fostering native manufactures. Heavier duties were imposed, 
 the relative irnoortance of textiles declined, and that of machinery 
 and electrical goods increased. The bulk of the textile marJeet, 
 which oefore 1951 had bcs-.n lai^gely in the hands of the British, v/as 
 captured by the mills in China and Japan. Germany, Britain, and 
 the United States were the principal suppliers of machinery and iron 
 and steel goods. 
 
 Hong Kong’s position as a focal point for comraerce betv/een 
 China and the '.Vesi: meant that its prosperity was dependent on local 
 conditions both in China and in western countries. Imports and ex- 
 ports fell from approximately ;’pG25 ,Q00 ,000 in 1919 to approximately 
 y27G, 600,000 in 1958. This v/as due partly to wars and disturbances 
 in China, which brought about a reduction in imports into Hong Kong 
 

 
 ); 
 
 
 3i 
 
 f • 
 
 ■ ■ • 
 
 I 
 
 
 > J . . . . . t 
 
 f 
 
 I 
 
 II 
 
 % . 
 
 -4 
 
 « 
 
 f 
 
 /• * , 
 
 • 
 
 4 
 
8 
 
 ID 612 
 
 partly to the years of depression in the West which considerably 
 lessened the volume of trade between China and Vt/estern countries. 
 
 At the height of its prosperity, in 1921, no fewer than 
 672,680 vessels, totaling 43 l/2 million tons, (excluding fishing 
 junks) entered and cleared the harbor, which was excellently equipped 
 with shipping and storage facilities. Most of the largest ocean- 
 going steamers plying to and from the Far East loaded and unloaded 
 portions of their cargo there, and it thus became by far the most 
 important center serving the Par East. 
 
 In the years preceding the outbreak of World V*ar II, the 
 colony became noted for its shipbuilding and repairing. Engineering 
 and shipbuilding are the colony’s only heavy industries. Light 
 industries include textiles, rubber goods, buttons, leather goods, 
 cigarettes, matches, preserved ginger and confectionery, canned 
 goods, glassware, and paints These industries are almost entirely 
 in Chinese hands, and most of the factories are Chinese owned and 
 managed. 
 
 The value of the total visible trade of Kong Kong amounted 
 in 1938 to approximately $152,000,000 in imports, and $126,400,000 
 in exports. One third of the imports was of goods for consumption 
 in Hong Kong (including rav/ materials for certain industries), and 
 came from Chinese and non-Chinese countries in a proportion of one 
 to three. About one- tenth of the exports was of Hong Kong origin. 
 Re-exports constituted 2/3 of the imports and 9/l0 of the exports. 
 
 Of these, about 10/ consisted of Chinese coastal trade, i.e. goods 
 Imported from a non-Chinese country, and re-exported to another 
 non-Chinese country. Nearly 70/ consisted of goods passing between 
 China and the rest of the world via Hong Kong, It will be seen 
 from these figures that that part of Hong Kong’s trade which is 
 concerned with China alone is less than that which is not concerned 
 with China at all. 
 
 Of imports, foodstuffs formed the largest item. Other 
 chief items wore cotton, cotton yarn, woolen and silk manufactures, 
 machinery and tin. In 1938 the Government monopoly in opium 
 represented less than l/ of the revenue of Hong Kong. The British 
 Government, as a signatory of the Hague Convention of 1912, adopted 
 the policy of the gradual suppression of opium smoking. By creating 
 a Government monopoly, and by gradually Increasing the price, con- 
 sumption was discouraged until it reached a point where in 1943 
 the British Government was able to announce that a policy of total 
 prohibition vjould be applied to all British territories in the Far 
 East when they were liberated from the Japanese, 
 
 Hong Kong was a very important banking center owing to 
 its position as the entrepot for South China’s trade. The banks 
 of the colony wore therefore pre-eminently foreign exchange banks. 
 One of their important features was the receipt of remittances 
 from Chinese abroad for transmission to their families in China or 
 for investment there. Another was the issuing of currency notes. 
 
 It has been estimated that between three and four million Chinese 
 
-9- 
 
 ID.612 
 
 sent remittances to the banks, and that the annual average from 1914 
 to 1930 was Chinese $200,000,000. 
 
 Post-War Rehabilitation 
 
 At the end of August 1945 ^ the economic life of Hong Kong 
 v/as dead. The population was greatly reduced, utilities were barely 
 functioning, there was no food, no* shipping, no industry, no 
 commerce. The British Military Administration, together with the 
 people of Hong Kong, who are always resilient and industrious, set 
 themselves at once to restore the colony to its proper place in the 
 commercial life of the Far East. 
 
 By November 1945, Hong Kong was formally opened to private 
 trading, and the total value of foreign trade jumped from 
 $3,000,000 in Novem.ber to $7,000,000 in December. Early in 1946 
 the value of trade had topped the pre-xvar level, and by the end of 
 the year had reached $48,500,000 per month as against $30,000,000 
 before the war. These figures do not, however, represent a 
 corresponding increase in the volume of trade, since the value of 
 all goods is very much greater than before the war. Shipping also 
 made a fairly rapid recovery, and port facilities, though in a bad 
 state of repair, were speedily rehabilitated. By the middle of 1946, 
 turn-around was almost normal, and by the end of the year, ships 
 entering the port had reached about 40 per cent of the pre-war level. 
 Industry has been slcv;er to recover ov^ing to lack of raw materials, 
 but law and order, a stable currency, and an economy screened from 
 disastrous inflation attracted much business to Hong Kong during 
 the year follov7ing the British re-occupation. Business men were 
 encouraged to rebuild their concerns, and many who had no pre-war 
 interest in the colony have established themselves there. 
 
 COMMUNICATIONS AND TRAINS PORT 
 
 In addition to having one of the finest natural harbors in 
 the v/orld, Hong Kong, at the outbreak of the recent war, V7as an 
 important air junction of the Far East. This was partly due to its 
 commercial position, and partly because it had become the terminus 
 of the British and French lines from Europe of Pan-American Airways 
 line from San Francisco, and the Chinese N.A. Company from Chung- 
 king. Since the war, both passenger and freight traffic has increased 
 Passenger traffic during 1946 was three times as great as in 1938. 
 
 Hong Kong is also the railroad terminus of South China. 
 
 The Kov;loon-C-.nton Railv/ay, connected v;ith the Canton-Hankow line, 
 formied one of the main lines of supply to China in her defense 
 against Japanese aggression until the fall of Canton in 1938. 
 
 There V7ere also river services connecting Hong Kong with Canton 
 and the neighboring Chinese territories. Internal communications in 
 the colony were excellent, roads were ample, and there was an 
 efficient service of motor buses. 
 
- - 
 
 ID 612 
 
 The task of putting tho Hong Kong-Canton railroad into 
 operation again after the Japanese occupation has not been easy. 
 The Japanese carried out no maintenance of railroad property, not 
 even of locomotives, and the workshops at Kowloon were completely 
 stripped of machinery. By November 1945, a through train service 
 had been started, and by the end of 1946 conditions had improved 
 still further, though they v;oro still considerably below pre-war 
 level. 
 
 Internal communications were also found in a poor con- 
 dition after the Japanese occupation, V/hile the Japanese built 
 two nev' roads, both of v/hich are useful, and v;ill be maintained, 
 the old roads suffered considerably from neglect, and to some ex- 
 tent, from bombardment. Only 15 out of 112 street-cars remained 
 serviceable, and almost all buses and stocks of spare parts had 
 been carried off. By the end of 1946, however, considerable pro- 
 gress had been made in restoring these services. 
 
 FISHERIES idlD AGRICULTURE 
 
 Fish is the main primary product of Hong Kong, It is 
 estimator that in 1958 there v/ero 5,500 large and small fishing 
 junks operating from the colony^ s waters, and that the equivalent 
 of some -^jG, 750,000 w'as invested in junks, gear, and general equip- 
 ment , 
 
 At the end of the v;ar, the industry v^as almost at a 
 standstill, the fishing fleet was in poor condition, and the fisher- 
 men were in great distress. The government provided rehabilitation 
 loans to the fisherfolk, and a scheme for reorganizing the industry, 
 worked out during the period of internment in Stanley Camp, has 
 been put into operation. This plan includes the setting up of a 
 Fisheries Department and a Fisheries Co-operative, The primary 
 object of this nev; organization is to ensure that the fisherman 
 receives a fair price, and that the profits go to him rather than to 
 the middleman. 
 
 Agriculture in Hong Kong is limited by the rugged and 
 mountainous character of the country. Before the war, about one- 
 tenth of the population lived on the land, and some 20^ of' the 
 colony was under cultivation. The main products were rice, 
 vegetables, and fruit, but tho quantities produced wore vjry small 
 compared to the needs of the population. Pigs, poultry, and plough- 
 ing cattle were also reared, and a dairy industry was beginning to 
 grow up. Just before the v/ar, it became evident that the natural 
 resources of Hong Kong could be further developed, and in 1941, plans 
 had be on made to establish a Department of Agriculture, 
 
 Both agriculture and animal farming, however, suffered a 
 severe sot-back during the Japanese occupation. The land v/as ex- 
 hausted tlirough ]a ck of fertilizer, the balanced production of rice 
 and veg-ctables v;as upset, and th-. number of livestock very greatly 
 
‘3 
 
- 11 - 
 
 ID 612 
 
 reduced. The Department of Agriculture v/as, hov/ever, set up without 
 delay after the reoccupation, and the work of restoring the farming 
 industry and of establishing it on much more scientific linos was 
 taken in hand. The production of rice and vegetables began to in- 
 croaso, and although the first rice crop in 1946 was bolov; pre-war 
 average owing to a spring drought, the second crop was one of the 
 best within living memory. Pig-raising and the dairy industry have 
 also improved considerably since the end of the war. 
 
 EDUCATION 
 
 Education in Hong Kong is voluntary, and is largely in 
 the hands of the Government and of missionary bodies. All schools, 
 unless soecif ically exempted, must register with the Director of 
 Education, and comply with certain regulations. In 1941, there 
 were 649 schools within the urban area. Of these, 9 were Government 
 schools, staffed and maintained by the Education DopcTtmcnt , and 
 20 v;ero grant schools, run mainly by miissionary bodies, with the 
 assistance of a Government grant, A further 91 were in receipt of a 
 Government subsidy to enable them to maintain adequate teaching 
 standards without charging exorbitant fees. The vast majority, hov/ever, 
 529 in nu:-'ib:.r, were private schools v/hich either v;ere not in need 
 of Government assistance, or did not reach the required standards. 
 There are also military schools catering for the children of men in 
 the Services, In the Government schools in 1941 there woro 1,500 
 primary and 1,199 secondary pupils, and in the grant schools, 
 
 6,346 primary and 3,274 secondary pupils. Owing to the destruction 
 of records, no figures are available of pupils in subsidized and 
 private schools in urban areas,' But in the colony as a whole, 
 there were 16,353 primary and 6,931 secondary pupils in subsidized 
 schools, while in private schools the numbers were 50,814 and 
 25,951 respectively. 
 
 Rural education was mainly in the hands of private and 
 subsidized schools, though the Government maintained tv/o primary 
 schools in rural areas with 400 pupils. The Evening Institute 
 carried on evening classes for adults in technical and educational 
 subjects, and a tv'o-year course of teacher 'trainirg v/as given at 
 the Govornmont’s Ncr thcote Training College whore there were about 
 75 students in 1941, 
 
 The language of Instruction varies from one category of 
 school to another. In some, English alone is used, in others 
 Chinese, and a number of schools have classes in both. Host of the 
 grant schools use English, and tho subsidized and private schools 
 Chinese, Secondary education in English is provided mainly in 
 Govorn'.iont and grant schools, while the other schools arc concerned 
 chiefly, though not entirely, with primary education. 
 
 During the enemy occupation, considerable damage was done to 
 school buildings, and there v;as a heavy loss of school books, and of 
 oquipwont and furniture much of v/hich v/as used as firewood. By 
 August 1945, the number of pupils in school had shrunk to 3,000 as 
 compared with 120,000 in 1941, 
 

 
- 12 - 
 
 ID 612 
 
 Two months after the British re-occupation, however, the 
 number of pupils had risen again to some 18,000, and by the end 
 of 19^6 there were more pupils attending primary schools than in 
 1941, though in secondary schools the revival was less satisfactory, 
 the re-opening of Trade and Technical schools is dependent on the 
 arrival of new equipment, but the Evening Institute and the Northcote 
 Training College are functioning again, and a new Rural Training 
 College has been opened in the New Territories. 
 
 Hong Kong University 
 
 The University of Hong Kong was established in I9II. One of 
 its objects was to maintain good understanding with China, and 
 efforts were made to maintain and develop it, in cooperation with 
 the universities of China, as a focal point of British and Chinese 
 cultures. Many students came there from Malaya and China. There 
 were faculties of medicine (the University had absorbed the College 
 of Medicine founded in I887), engineering, arts, and science. 
 
 The standards were those of London University, and the medical 
 degree was recognized by the General Medical Council of Britain. 
 
 In 1941, on the eve of the Japanese invasion, a new 
 science building was opened, and plans had been approved for an 
 annex to house the increasing number of students. Owing to the 
 destruction of records, the exact number of students attending the 
 University in 1941 is not known, but there were considerably 
 more than the ^l6 recorded in 1939-40. In addition, hospitality 
 was given to some 5OO students of Lingnan University who had been 
 driven from Canton by the Japanese. 
 
 During the Japanese occupation, the University buildings 
 suffered from wholesale looting. Every vestige of equipment, 
 fittings and woodwork v;as removed from the new science building 
 and the medical schools. Seven members of the staff lost their 
 lives during hostilities and the occupation, but two European 
 members of the staff escaped to Free China where they were able to 
 help the many students who had also made their way there. 
 
 Lingnan University, which had succeeded in establishing itself in 
 temporary quarters in Free China, was able to return the hospitality 
 given to its own students in Hong Kong, and in recognition of 
 this assistance, the Hong Kong Government has since made a gift of 
 HK$20,000 ($5,000) towards Lingnan' s rehabilitation. 
 
 The future of Hong Kong University is being considered 
 by a special committee set up by the Secretary of State for the 
 Colonies. Meanv/hile, first year classes in all the faculties were 
 opened in October 1946 with an attendance of 78 men and 31 women. 
 
 Work also began in 1946 on the rehabilitation of the new science 
 building and of some of the residential buildings. 
 

 ■V.i 
 
13 
 
 ID 612 
 
 HEALT:I AND 'V/ELPARE 
 
 The Medical and Health Departments were reorganized and 
 greatly expanded after 1920, Their greatest problem was that of 
 dealing with a Ic.rge population ignorant and distrustful of V.estern 
 health no thods , Two varieties of hospitals were maintained, the 
 government hospitals v/hcre western medicine v.'as practiced, and the 
 Chinese hospitals, which received a government grant, and v/here 
 patients could choose botv/een Western .and Chinese methods of treat- 
 ment , The Chinese also maintained nine dispensaries, and within 
 recent years government v;elfare-centers (or out-patient dispensaries) 
 had bccor.-.e popular. 
 
 The Medical Department also controls the Malaria Bureau 
 and the Bacteriological Institute, It is responsible for the 
 inspection of the Chinese hospitals and dispensaries, maternity and 
 chiid-wolfarc centers, and school clinics. 
 
 Sanitary conditions have always been a primary problem in 
 public la^alth, ov/ing to the poverty of the dense urban population, 
 and its i.wigratory character. Influential Chinese played a very 
 important part in combating this problem. One of the major 
 questions of health in Hong Kong was that of the water supply. For 
 this, the colony relied upon the mainland, for rainfall was not 
 alwaiys sufficient to meet the needs. Shortages occurred in periods 
 of drought, w'hlle the rapid grow'th of the population, and the 
 success of the campaign to raise standards of personal hygiene and 
 public health made ever-increasing demands on the water supplies. 
 
 The necessity of finding nev/ sources of v/ater led to v;ork being 
 started in 1923 on the Shing I.Iun Valley Scheme to tap the small 
 rivers and streams of the New Territories, The huge Shing Hun River 
 Dam was opened in 1935, In 1930, a cross-harbor pipe-lino was laid 
 to convey water to the Isla.nd, Between 1920 and 1935, the cost of 
 constructing now water-works had. amounted to some $&,C00,000, and it 
 weas hoped, that the w'ater problem had been solved for some tine to 
 cone , 
 
 Since the end of the war, public health has had to be 
 maintained under exceptionally difficult circumstances. Serious 
 overcrowding, shortage of food, damaged s'ow'ers, and an uncertain 
 wat^r supply are some of the problems v;ith v/hich the Medical 
 Department has had to contend. Yet the standard of health during 
 1946 was extremely high, and mortality rates v/erc the lowest on 
 record. 
 
 In the course of the war, some 160,000 persons w'ere dis- 
 placed. 03 " the destruction of houses. The great majority of these, 
 who were Chinese of the poorer classes, crowded into th^ tenements 
 that remained intact, •'•.’hile thousands of the new-comers who poured 
 into Hong Hong after the British returned, found shelter only in 
 partiall;:" demolished building or insanitary shacks. Many of the 
 latter came from China v-ith no kno’."lcdge of urban life or the rudi- 
 ments of sanitation. 
 

 
 1 
 
 
 O JI1 
 
 - I 
 
 . ■^1"'^ T 
 
 • » V r ^ 
 
 ' ^ ’OO JiS 
 
 
 . < 
 
 i 
 
 t 
 
 
 
 f 
 
 K 
 
14 
 
 ID 612 
 
 
 The re-establishment of the Hong Kong dollar in September 
 1945, and the consequent worthlessness of the occupation yen, pro- 
 duced a situation where ninety per cent of the population had no 
 money and little immediate prospect of obtaining any. A relief 
 program was set going, that Included free food for the destitute, 
 and work for some forty thousand unskilled laborers in clearing the 
 streets. Centers were opened to accommodate destitute people, and 
 were run in cooperation with the Red Cross, the Salvation Army, 
 
 St. John Ambulance, and other organizations. Used clothing was 
 supplied by UtTKRA. Relief was also provided for some 10,000 persons 
 from China and Macao, and temporary relief for 2,300 UNRRA-sponsored 
 repatriates bound from Australia, Manila, and elsewhere for the 
 interior of China. 
 
 In contrast to the thousands of deaths from malnutrition 
 under the Japanese, only two deaths during 1946 were attributable 
 to starvation, and though food was scarce, there was no serious 
 malnutrition. 
 
 HK|)5, 000, 000 (^1,250,000) vjere spent by the Government on 
 relief work during 1945. At the end of the year, plans were being 
 considered for setting up a Social V'^elfare Sub-department of the 
 Secretariat for Chinese Affairs, and an administrative officer was 
 receiving special training in Britain in social welfare work. 
 
 LABOR 
 
 A Labor Office v;as established in 1938 as a sub-department 
 of the Secretariat for Chinese Affairs. Since the end of the war, 
 it has boen set up as a separate and independent department. A 
 Labor Advisory Board also existed before the war, and has now been 
 reconstituted to represent the interests of European and Chinese 
 employers and of Chinese labor. The duties of this Board are to 
 advise the Government on labor matters and to negotiate with repre- 
 sentatives of labor when disputes arise. 
 
 Existing labor legislation provides for the registration 
 and inspection of factories, restriction on the employment of 
 women and young persons, and the fixing of wages and working hours. 
 At the end of 1946, further legislation was under consideration. 
 This would provide for the registration of Trades Unions (guilds 
 and societies, including labor guilds, have hitherto registered 
 voluntarily with the Secretariat for Chines Affairs), conciliation 
 machinery, workmen's compensation (already under consideration in 
 1939), and means for giving effect to international conventions 
 as they are ratified by Britain and applied to Hong Kong. 
 
✓ 
 
 ! 
 
 t 
 
 
 
 » 1 
 
 I 
 
 ✓ 
 
 
 V 
 
 r 
 
 11 
 
 ,%V' 
 
\ f 
 
 • > 
 
 ID 612 
 
 -}5 
 
 THE VJAR AND THE LIBERATION 
 
 Even before the outbreak of war v/lth Japan, it was 
 evidont that, from a military viewpoint, Hong Kong had become a 
 liability?- rather than an ’asset. It came w'ithin the "status quo" 
 area defined by the V/ashIngton disarmament treaties, so that its 
 docks could not bo enlarged to accommodate modern capital ships. 
 
 But with the emergence of’ Japan as a strong naval and air power, 
 and with the development -by the Japanese of Formosa, Hong Kong’s 
 position became that of an isolated outpost within the Japanese 
 zone of naval power and 1,445 miles av>/ay from Singapore, from v/hich 
 a battle flo^jt, had it been available, v/ould have had to operate. 
 
 The military garrison consisted normally of four British 
 and Indian Regiments v;ith contingents of artillery and engineers. 
 There v^as also a Volunteer Defense Corps, and in 1941 many Chinese 
 volunteers joined the local defense forces. It was the head- 
 quarters of the Chinese Squadron of the Royal Navy, 
 
 The position of Hong Kong was, therefore, extremely 
 vulnerable Y;hen, on December 7th, 1941, the Japanese la.unchod their 
 attack. For eighteen days the small garrison held out, but on 
 Decembv-r 25th the island fell before the powerful onslaught of the 
 enemy. 
 
 During the three and a half years that Hong Kong 
 remained in Japanese hands, there was never any doubt that the 
 Chino so who remained in the colony were fundamentally loyal to the 
 Allied cruse. Farts of the New Territories were in the hands of 
 Chinese g\icrrillas throughout the v;ar, and passive resistance to 
 every enemy enterprise v;as nicely calculated. Allied personnel 
 escaping and evading capture were assured of assistance from the 
 peasants in the New Territories, and Allied subversive organiza- 
 tions had no difficulty in securing the help of every class of 
 Chinese in the colony, 
 
 Japan’s defeat v/as accepted by the local Japanese in 
 Hong Kong some tv/o weeks before Allied forces v;ere able to reach 
 the Colony, During this period, the former Colonial Secretary 
 and many of his colleagues contrived to leave the camps v/here they 
 had boon imprisoned throughout the occupation, and set up an in- 
 terim government. 
 
 On August 30th, 1945, British naval forces rooccupied 
 Hong Kong, and the Japanese formally surrendered to Admiral Har court 
 on September 16th, A military administration was established which 
 lasted until civil government was restored on May 1st, 1946, 
 
 Members of a small unit that had been v/orking in London since 1943 
 on plans for the resumption of British administration reached 
 Hong Kong in September 1945, and assumed senior posts dealing v;ith 
 civilian matters. Many former members of the administration who 
 had been in prison camps throughout the occupation, deferred 
 their repatriation to assist, with their experience and special 
 knov/ledgo, in the urgent v;ork of rehabilitation. 
 
4 
 
 
 S-I?)' 
 
 
 c 
 
w 
 
 c * 
 
 € ^ 
 
 -16- 
 
 conclusion 
 
 ID 612 
 
 The security of British rule was one of the most important 
 causes of the prosperity of Hong Kong from its earliest days. 
 
 Western commodities for the South China trade were stored in the 
 colony, and it became the banking center for South China, Many 
 Chinese preferred to deposit their money in Hong Kong, and in 
 times of disturbance in China the inflow of funds increased. 
 
 Foreign firms would insist on pa3mient for their goods in Hong Kong 
 currency which also circulated v^idely in China. 
 
 The Chinese have taken refuge in Hong Kong at all times 
 of political and economic distress in their own country. In 1937 
 after the outbreak of the Sino- Japanese war, tens of thousands of 
 refugees poured into Hong Kong. It was realized from the first 
 that their presence would entail an additional strain on the 
 administration and defense of the colony. But, from 1937 to 19^1 ^ the 
 Government services, with the help of many voluntary organizations, 
 did all in their power to house and maintain a population nearly 
 tv;ice its normal size. As soon as British administration was re- 
 sumed after the Japanese occupation, another great influx of people 
 from South China began, and had reached over a million and a half 
 by the end of 19^6, Among this number were returning business men 
 and many who vjere starting commercial operations in Hong Kong for 
 the first time. 
 
 The status of Hong Kong was not affected by the 19^3 
 treaty relinquishing British extra-territorial rights in China. 
 
 The island of Hong Kong and Kowloon are British territory, ceded to 
 Britain in 1842 and i860 respectively, and the lease of the New 
 Territories is due to expire in 1997* Generalissimo Chiang Kai-shek 
 has emphasized that the present status of Hong Kong is regulated 
 by treaty between Britain and China, and that, if any changes are to 
 
 take place in the future, these can only come through friendly 
 negotiations between the two countries. The well-being of Hong Kong 
 must clearly depend on Anglo-Chinese friendship, though where 
 strategic interests are involved, other countries, too, may have 
 an interest in the future of the colony. 
 
 JW/ms