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the Colony, I was strongly averse from raising a further loan,

Again the depressed condition of trade was unfavourable to an

increase in taxation. I therefore decided, after consultation

with the Unofficial Members of the Legislative Council and with

the approval of the Executive Council, upon a corresponding

reduction in the Expenditure Estimates, which was effected by the

deletion of items that had been inserted in the first draft for

Insanitary Property Resumption ($150,000), for a floating fire

engine ($50,000), for Queen's Statue Pier Reconstruction ($35,000)

and of certain minor items as well as by reductions on other

subheads.

5.

The footnotes and appendix to the estimates of

Expenditure explain every expense of an unusual nature therein

comprised as well as the differences under subheads, while my

remarks to the Council also go very fully into these differences

and make clear the programme for public works.

For purposes of estimating sterling payments in

England and in the Colony, I have, on the advice of the Chief

Manager of the Hongkong and Shanghai Banking Corporation and the

Treasurer, assumed that 2/- will be the average rate of the

dollar during the year. This rate, which is based on the

experience of the past year and on the prevailing price of silver,

is probably as near as it is possible to arrive at the value for

a fixed period of so variable a coin.

7.

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