A
20132.
Inclosure
J
of policy followed are fully dealt with in the address of the Colonial Secretary on the occasion of the first reading. I do not think it necessary to go over that ground again in detail in this despatch. The events of the three weeks which have elapsed since the Colonial Secretary's address indicate that the forecast made therein is being borne out. The boycott has nominally come to an end; but, as you will
be aware from other sources, the position is still full of
uncertainty and it seems likely to be a long time before
normal trading conditions can be reached. Until renewed
prosperity returns to the Colony, this Government must
exercise great caution in embarking on any new scheme s
involving large expenditure.
6.
5.
In spite of the reduced expenditure for next year on public works, there is an estimated deficit of $1,307,305 and without the loan for the Shing Mun Scheme,
which formed the subject of my despatch No.399 of 20th September, 1926, it will be impossible to balance the budget.
At the conclusion of the first reading of the Supply Bill a Resolution, copy attached, under the provisions. of the Liquors Ordinance No.9 of 1911, was introduced into Legislative Council and passed. A copy of the speech made by the Colonial Secretary who introduced the Resolution will be found in Enclosure No.5. As stated therein it is anticipated by this means to add $600,000 to the revenue of
next year.
This sum is included in the estimate of $1,800,000 for liquor duties shown on page 6 of the Estimates
7.
As regards expenditure the details of increases and decreases are explained in the foot-notes. I have already in various despatches requested your approval for the more important increases in personal emoluments, and where intimation of your sanction has already been received a statement to that effect is inserted in the foot-notes.
8.