60
2.
The American Dollar during ...
3 mm thr AK preading
find that the silver market is ... they 884.
AY
1. take the rate which is calculated in the every proceding 3 months.
14829/03
Sir M. Nathan appreciates justly the care which has been taken in explaining and annotating these estimates. It is the more to be regretted that so much trouble should have been largely thrown away as the estimates of expenditure are to a great extent vitiated by the calculation of the dollar at 1/8. This rate has of course been taken for convenience ($12 = £1) but it does not even approximate to accuracy. The Treasury rate for next quarter is 1/11. This is probably based on the Straits exchange rate, which averages more than that of Hong Kong and 1/10 would have been the most reasonable rate for Hong Kong. This means that all the sterling and exchange compensation expenditure is over-estimated by about 10 per cent. It would be possible to get nearer to accuracy by making this deduction but the labour involved would be scarcely repaid as, if they follow precedent, they will begin to put in estimates for supplementary expenditure within the next month.
We had better accept the figures as they stand leaving this 10% on the sterling expenditure as a margin of error but ask them next year to take some figure nearer to the actual rate e.g. the average of the previous 3 months.
The ordinary expenditure exceeds the revised estimate for 1904 by nearly $270,000, the largest increases being Military Contribution $38,306, Pensions, $31,618, Education $24,356 and Police $29,611.