The Occupation of Hong Kong and the Life of a Veteran

By Michael Souza

In 1841, after losing the First Opium War, China ceded Hong Kong to the Great Britain. The Hong Kong Volunteer Defence Corps (HKVDC), also known as “The Volunteers”, was established in 1854 to defend Hong Kong when the regular British troops were reassigned to fight in the Crimean War.  

Henry Anthony Souza

 My father, Henry Souza, was born in Hong Kong on 12th July, 1921.


 In 1938, at the age of 18, he joined the Volunteers and was a member of the 3rd Battery of the HKVDC.     

 During that time, there were three banknote issuers of circulating currency in Hong Kong: 


                The Hong Kong & Shanghai Banking Corporation


                The Chartered Bank of India, Australia & China, and


  the Mercantile Bank of India

  The Government of Hong Kong also issued its own notes and here is an example of the $1 issued in 1936.  


 At that time, there were only three coins in circulation, the 1 Cent, 5 cents and 10 Cents.


Hong Kong Coins of the 1930s 

When war began in Europe in 1939, Japan had already been at war with China since 1937.  To protest the invasion of China and to curb its military expansion, an oil embargo was imposed against Japan.  Hong Kong newspaper accounts from 1939 hinted that war with Japan was inevitable.  

 Sometime between 1939 and 1941, my father was posted to the Field Ambulance Section of the Volunteers. 


Hong Kong 1 Cent, 5 cents and 10 Cents Banknotes of 1941

 That same year, Hong Kong began to experience a shortage of 1-cent, 5-cent and 10-cent coins and the Government claimed that these coins were being smuggled to Shanghai and sold to Japanese agents for their metal to assist the Japanese in their war efforts.  In May 1941, the Hong Kong Government had to issue uniface 1-cent paper notes and in October they also issued uniface 5-cents and 10-cents notes to cover this shortage. 


 War began on 8 December, 1941 when 52,000 soldiers of the Japanese 23rd Army swarmed across the border from China into Hong Kong.  To oppose them were 14,000 allied soldiers.



 In forty hours, they overcame the defenses held by British forces along the Shing Mun Redoubt and the Gin Drinkers Line defined by the red lines on this map. 

 The city of Kowloon on the mainland fell to the Japanese on 12th December and the remaining defenders retreated to Hong Kong Island. 


 When the British were under siege on Hong Kong Island there emerged a shortage of coins and $1 banknotes.  The shortage of the $1 banknotes arose when the Japanese distributed leaflets warning that all notes over $10 would be worthless after the Japanese took over the colony.  To relieve the situation a stock of The Bank of China 5 Yuan notes were discovered on the premises of The Commercial Press Limited in King Road, North Point. These notes were overprinted HONGKONG GOVERNMENT $1 and released for circulation on the 13th of December.


The Japanese successfully invaded Hong Kong Island on 18th December and split the allied forces consisting of British units, HKVDC units, and Canadian troops. 


 It was during one of the battles on 19th December, that Sgt. Major John Osborne of the Winnipeg Grenadiers was posthumously awarded the Victoria Cross when he threw himself on top of a Japanese grenade to save his men.  This was the only Victoria Cross awarded in the battle.


Japanese-occupied area on 25th December 1941 prior to Allied surrender

 The allied troops were ordered by the Governor Mark Young to surrender on Christmas Day 1941.  At that time, my father was in Fort Stanley situated in the southern part of the Island. 

 Shamshuipo Prisoner of War Camp

 My father and the other allied troops became POWs and were sent to Shamshuipo POW camp on the mainland.   

The Japanese prepared an index cards on each POW and at the end of the war, these records were kept that the National Archives in the United Kingdom.  In 2016, I visited the National Archives and found my father’s POW card.   

 Front of Henry’s POW Index Card prepared by the Japanese


 Reverse of Henry’s POW Index Card

The reverse provides details of his incarceration.  The middle of the card states that on 1943 July 25 he was hospitalized for chronic bronchitis and was discharged from hospital on 1943 August 13.

 The top of the card indicates that on 1944 May 14, he was transferred to the Tokyo Camp Administration from Hong Kong and later on 1945 April 14, to the Sendai Camp Administration. 

The bottom of the card states that at the end of the war in 1945 September 9, he was transferred to a Captain Canderwood at Port Yumoto.

We will have more on this part of his life later.   

 This photo shows Lieutenant-General Sakai entering Hong Kong in his victory parade.  He became the Military Governor of Hong Kong until February 1942 and retired from active service in 1943.   

 Kanao Inouye was a second generation Japanese Canadian born in Kamloops, BC.   He was studying in Japan when the war began and in May 1942, he was recruited as an interpreter and sent to Shamshuipo POW camp in Hong Kong.  Inouye was also a member of the Kempeitai, the Japanese equivalent of the German Gestapo, and was particularly cruel towards the Canadian prisoners.  The prisoners nicknamed him “The Kamloops Kid” and “Slap Happy” due to his penchant for slapping prisoners for no reason. 

 The coinage for Hong Kong was also affected by the war.  All Hong Kong coins were minted in England and according to the records at the British Royal Mint: there were five shipments of the 1941 1-cent coins.  One shipment was unloaded in South Africa, returned to the Mint and melted down.  The fate of the remaining four shipments is unknown and there are rumors that one shipment was sunk by a Japanese submarine and another shipment was captured by the Japanese in Hong Kong and melted down for the war.  None of the 5-cent coins destined for Hong Kong were shipped and most were melted down for the nickel to be used in the war effort.  They are some of the rarest of Hong Kong coins.


Hong Kong & Shanghai Bank 1934 $50 “Duress Note”

 After their victory, the Japanese used the Hong Kong and Shanghai Bank building as its Headquarters for the administration of Hong Kong.   The Japanese soldiers shot one bank official to intimidate the others to open the vaults.   In the vault, there was $119,800,000 of un-issued $50, $100 and $500 banknotes.  Although half of these notes were already signed, they had no value because the Bank had not yet acquired the reserves that were required by law before they could be issued.  In any event, the Japanese forced the Bank officials to issue them.  These notes issued this way became known as Duress Notes. 

The Japanese issued an order limiting the use of Hong Kong currency to $10 and introduced the Military Yen to the population.  The Japanese re-opened the Hong Kong branch of the Yokohama Specie Bank and made it the official issuer of the Military Yen.  Citizens were required to exchange Hong Kong currency at a rate of $2 for 1 Military Yen.  For a short while, Hong Kong currency was allowed to circulate with the Military Yen.

 The initial three Military Yen were overprinted notes printed in August 1938 for use in southern China.  The red overprints blotted out the name “Bank of Japan” and the four characters identified them as “Japanese Imperial Government Military Notes”.  

 The three notes in the series were: 

Overprint Series - 1 Yen


Overprint Series - 5 Yen


Overprint Series - 10 Yen

 Later, the Japanese also circulated the 1st Series which were printed in December 1938.  These three notes omitted the name “Bank of Japan” and incorporated the previously overprinted inscription into the design.  Again, they were:


1st Series – 1 Yen 


1st Series - 5 Yen 


1st Series – 10 Yen 

The 2nd Series were notes of small denominations that were printed in November 1940.  These notes no longer made reference to their use as military notes.   These notes have 11 characters along the top, no serial number and issued under the name of the Japanese Imperial Government.     

They consisted of the: 

2nd Series - 1 Sen


2nd Series 5 Sen


2nd Series - 10 Sen 


2nd Series - 50 Sen 


2nd Series - 1 Yen


2nd Series - 5 Yen


2nd Series - 10 Yen 

A 3rd Series of notes similar to the 2nd Series notes, were also issued.  The only difference between the 3rd Series and the 2nd Series is that these notes have seven characters across the top of the note and have Serial Numbers.

 They were issued in: 

3rd Series 1 Sen


3rd Series - 5 Sen


3rd Series - 10 Sen 


3rd Series - 50 Sen


3rd Series - 1 Yen 


3rd Series - 5 Yen 


3rd Series - 10 Yen 


3rd Series - 100 Yen


 3rd Series - 2 Lin and 5 Mo (Specimen)

 This 2 Lin and 5 Mo uniface banknote was printed but never issued for use.  This specimen note was offered at a recent John Bull Auction for $12,000 but did not sell.

On July 24, 1942, the Military Yen was revalued at HK$4 to 1 Military Yen and the Military Yen was made the sole legal tender in Hong Kong.  The Japanese severely punished anyone caught using Hong Kong Dollars.

 In 1944, the Japanese issued three 100 Military Yen Notes for use:

One was printed in the style of the Overprinted Series and the other two were in the 1st Series style. 


1944 Overprint 100 Yen


1944 1st Series 100 Yen printed in Yellow Green 


1944 1st Series 100 Yen printed in Black.



In the meantime, my father languished in Shamshuipo POW camp from 1941 until April 1944.  On April 29, 1944, he along with 47 Canadians and 137 Hong Kong Volunteer Defence Corp prisoners were embarked on a ship called the Naura Maru bound for Japan.  En route, it stopped over in Formosa, then went through Nagasaki and Hiroshima, and arrived at Moji on May 27, 1944.  This was the last prisoner transport to leave Hong Kong and they were very lucky to arrive in Japan.  Several Japanese transports with allied prisoners en route to Japan were sunk by American submarines with a huge loss of POWs’ lives.  

He was sent by train to Sendai Camp #2 to work at the Iwaki Coal Mine located in a village called Yoshima.


Iwaki Coal Mine, Yoshima, Japan 

There, they mined coal in two 12-hour shifts.  Every night, each prisoner was allowed to bring back a one pound lump of coal to heat their barracks.  Food usually consisted of barley mixed with rice and for working down in the mine, they each also received a bun.   The buns were either eaten or used as currency by the prisoners.  Six buns could buy a tin of corned beef or Spam from the Red Cross parcels. 

Christmas 1944 in Japan 

Here is a photo of him in Japan on Christmas Day 1944.   In the photo, he is seated in the second row behind the goat.  Note the Red Cross parcels. 

The Red Cross parcels did not arrive regularly and often each parcel had to be shared among several prisoners.  Frequently, the Japanese guards pilfered the parcels for what they could use before giving the rest to the prisoners.   Although the prisoners were also paid wages of 10 sen for each day they worked in the mine, there was nothing to buy in the camp, so it was used for gambling.  The prisoners very often also used cigarettes from the Red Cross parcels as currency to acquire items from other prisoners.  


Sendai Camp on August 28, 1945 

In this photo, he is seated in the middle row, second from the right.  Japan had surrendered on August 15th.  At that time, he was 24 years old and he told me he weighed only 80 pounds.  


Overhead view of Sendai #2 POW camp

Another website provided me with an aerial view of Sendai Camp #2 taken on September 2nd, by the US Army Air Force as they dropped food supplies to the prisoners.  When they were released, the former POWs were taken to the Philippines for rest and recuperation for two weeks before being repatriated to Hong Kong.  

Hong Kong $1 overprinted on 1000 Yen Note 

On September 1, 1945, when the British Military assumed the administration of Hong Kong, the currency issue had to be resolved, but until new Hong Kong banknotes arrived, there was no option but to allow the circulation of the Japanese Military Yen to continue.   The plates for a never-issued Japanese 1000 Yen note were found and a decision was made by the British Military Administration to re-engrave the plates to strike through the seven characters, add a denomination of 1 Dollar, and the phrase “Hong Kong Government”.  These were never issued and were eventually destroyed.  Surviving examples are very valuable.

 In addition, stocks of the Central Reserve Bank of China 1000 Yuan notes and 5000 Yuan notes were discovered at the Chung Hwa Book Company in Kowloon.   The 1000 Yuan notes were overprinted as FIVE DOLLARS and the 5000 Yuan notes were overprinted as Hong Kong TEN DOLLARS.  

Hong Kong $5 overprint on 1000 Yuan note 


Hong Kong $10 overprint on the 5000 Yuan notes

The overprinting and numbering was done by Ye Olde Printerie, and were held in the vaults of the Hong Kong and Shanghai Banking Corporation.  However, before these notes could be released, Government of Hong Kong Banknotes printed in the UK arrived.  These overprinted notes were held until February 1946 and then they were burned.   Records show 2.4 million $5 notes were overprinted.  Again, surviving examples are very valuable.  

 The Government of Hong Kong issued some of the earliest notes in 1945.

There were three uniface notes of 1 cent, 5 cents and 10 cents and these were later replaced by later issues and banknotes of the Hongkong & Shanghai Banking Corporation, the Chartered Bank of India, Australia & China, and the Mercantile Bank of India.

 On September 6, 1945, the Japanese Ministry of Finance announced that all Military Yen notes were void. Overnight the military yen literally became useless pieces of paper to the people of Hong Kong. 

So what happened to the Kamloops Kid after the war?

 After the war ended in 1945, Inouye was seen in Kowloon by liberated Canadian prisoners and was arrested. The Kamloops Kid was then tried for war crimes by a military tribunal for being implicated in the deaths of three to eight Canadian soldiers. He was convicted and sentenced to death. However, the verdict was overturned on appeal, because as a Canadian citizen, he could not be prosecuted for war crimes committed by enemy soldiers.

 In April 1947, Inouye was tried on the criminal charge of treason. He was again found guilty, and on August 27, 1947, he was hanged at Hong Kong’s Stanley Prison.  He was the only Canadian executed for treason in World War II.


What happened to Lt. Gen. Takashi Sakai

 At the end of the war, he was extradited to China and found guilty of war crimes. He was executed by firing squad on 30 September 1946.  

Signing of the Treaty of San Francisco

 On September 8, 1951, 49 nations signed the Treaty of San Francisco.  It officially served to end the Second World War with Japan and became effective on April 25, 1952.  Under the terms of the treaty, Japan agreed to reimburse the occupied nations and under Article 16, agreed to donate £4,500,000 to the Red Cross for POWs that suffered undue hardships.  Remember Article 16 because it becomes relevant later.

 As for my father, he rejoined the new Hong Kong Defense Force in 1949 and became a marksman.   In 1951, the Hong Kong Defence Force was granted the title “Royal Hong Kong Defence Force”.  In 1961, the unit’s was renamed the “Hong Kong Regiment” and in 1970, to the “Royal Hong Kong Regiment”.


Henry at the 3rd Asian Games second from right

In 1958, he returned to Tokyo, Japan; this time as an athlete representing Hong Kong at the 3rd Asian Games.  He is pictured second from the right.  

At the Games, he won the Bronze Medal for Hong Kong in rifle shooting and is pictured on the podium on the right.


3rd Asian Games, Bronze Medal


Invitation to visit HRH Prince Philip

 In 1959, Prince Philip visited Hong Kong and on March 7th, he and my mother were both invited to meet him aboard his yacht “Britannia”.  

The Hong Kong contingent enters Olympic Stadium in Rome 

In 1960, he represented Hong Kong at the Olympic Games in Rome but did not win any medals.  Italy did not issue any coins to commemorate the Olympics.    

At a park at the 1964 Olympics in Tokyo

In 1964, he again represented Hong Kong at the Olympic Games in Tokyo but did not win any medals. 


 Japan issued two silver coins, a 100 Yen and 1000 Yen to commemorate the 1964 Olympics

At the 5th Asian Games Thailand in 1966

 In 1966, he represented Hong Kong at the 5th Asian Games and came in fourth. 

Thailand issued a 1 Baht coin to commemorate the 5th Asian Games 

 Henry with the Governor’s Marksman Shield 

Between 1955 and 1966, he entered numerous local shooting events and won over 200 awards.   He became one of Hong Kong’s premier sportsmen.   

Member of the Sniper Section 

He was also a member of the Royal Hong Kong Regiment’s Sniper Section and he is shown here wearing camouflage headgear taking a break from his training.    

Here we have a picture of him with all his trophies and his Anschultz Competition rifle.

 In 1968, our family immigrated to Vancouver, Canada.  Because he was one of Hong Kong’s noted sportsmen, his departure was reported in the newspaper.

 If we did not immigrate to Canada, he would have represented Hong Kong in the 1968 Olympic Games in Mexico City.  

In 1973, he developed heart trouble. The doctors suspected that his POW internment and use as a slave labourer in Japan contributed to his condition.  In 1975, at age 53, he died of a heart attack at home. 

 In September 1995, the Government disbanded the Royal Hong Kong Regiment in anticipation of the handover of Hong Kong to China in 1997.  


Lawsuit against Japanese Government

But that is not quite the end of the story.  Many civilians had kept wartime Military Yen and had been petitioning successive Japanese governments to redeem their Military Yen.  Many of them had become destitute after being forced to trade Hong Kong Dollars for their Military Yen.  Even as late as 1999, court cases have been launched against the Japanese Government.  All were unsuccessful.  WHY?  The Japanese Government cited the 1951 Treaty of San Francisco that required Japan to reimburse nations that it occupied.  And because these payments were made on a national level, there was no provision to reimburse the claimants on an individual level.   As a result, many civilians that lived through the occupation went to their graves still possessing bundles of worthless Japanese Military Yen.   

 Many Far East Veterans Associations have also lobbied successive Japanese Governments to reimburse them for the time spent as POWs and slave labourers.  This time, the Japanese Government cited Article 16 of the 1951 Treaty of San Francisco to deny payments.  If you recall, Article 16 of the 1951 Treaty of San Francisco required Japan to pay £4,500,000 to the Red Cross for POWs that suffered undue hardship.  And that clause absolved Japan of all future compensation to the POWs.

 In 2001, the British Government decided to pay its former Far East POWs or their widows, a one-time £10,000 payment to recognize their wartime suffering, but by that time, most veterans or their widows were no longer around to collect.

Copyright 2018 Michael Souza