expenditure on subsidiary coinage.
3. I greatly appreciate the
effort which has been made to reduce
expenditure, particularly in the Public
Works Department, but in spite of these
efforts I consider the financial position
of the Colony to be most unsatisfactory
at the present time.
I
4. You informed me in your telegram
of the 22nd December that the Colony had
no liquid assets; its overdraft at the
Hong Kong and Shanghai Bank amounts to
about $2,000,000; and it has no
58833
opportunity of borrowing in the open
market here. The Government is
therefore in the undesirable position
dependent oy
of being at the meray-of the Bank,
which can, I suppose, demand payment of
the overdraft at short notice. I shall
be glad to learn what rate of interest
is charged on the overdraft.
It is
possible
707
possible that the overdraft might be paid
off from the proceeds of the issue of a
loan locally, and I shall be glad to
learn whether you think that a local loan
of $2,000,000 could be raised successfully,
and if so on what terms. Any such loan would
no doubt take the form of short-dated bone,
redeemable in say 5 years.
5.
In any case it is evident that
further effort must be made to place the
finances of the Colony on a sound footing
both to balance revenue and expenditure
and to provide for a speedy reduction of the
overdraft or for the debt charges and
eventual redemption of the bonds anould
such bonds be issued.
6. So far as further savings are
concerned the expenditure on subsidiary
coinage appears to me to provide the only
opportunity of effecting any considerable
economy, and I have withheld my sanction
of the proposed expenditure on this account.
When