with the amount of the fictitious revenue.
In making this adjustment the rate of exchange for the quarter current at the time of the transaction will be substituted for the rate taken in the C.A. accounts.
Mr. Thomson's previous remarks on this subject will be found at the page turned down.
D nor loses by the system.
It is when the apparent profit is less than nil, and when the apparent gain on exchange is accordingly swollen above the real profit figures that the colony loses.
in 33623/1900. In his present letter
17
" year at the top of the 2nd page is no doubt a slip for "quarter".
Example B given by the C.A.G. won't do, because he forgets that when the real rate of exchange is higher than the Treas. rate the cost of the coins will be greater than when the Treas. rate is above the real rate. The matter is one of rather abstruse calculation, but I have come to the conclusion that the Colony always loses when the Treas. rate is above the actual rate, and always loses when the Treas. rate is below the actual, except when the apparent profit on the coins is just nil or is more than nil. In these latter cases the apparent profit plus the apparent gain on exchange are exactly equal to the real profit, and the Colony neither gains nor loses.
We need not discuss whether the Gov's calculations are right.
Send desk (now going to be retd) and refer to Audit Office, together with the copy of wh. was previously sent to A.G.
encl. in 33623/00.
I say that the ... was overlooked when the latter was sent to them, & that they say ...
G. selo point paper S. of I proposes if the C. & A. have no objection to approve the amendt. of the Hongkong Financial Instructions (fwdld. in ls on 3752/07,2) by altering the last 2 lines of 5.151 into "average monthly rate of exchange for the month in question"; & ask for early reply in order that the for. may be informed by tel. so that this may be altered accordingly.
alum Gu96/11
273