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DECODE
OSIVED
TELEGRAM from the Governor of Hong Kong to the Secretary
State for the Colonies.
Dated 1 September 1931. Received 11,35 a.m. 1 September, 1931.
13°
IMPORTANT. Confidential. No.168. Your telegram of the 5th
August Confidential Conversion of sterling salaries.
*
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49
I have just completed final revision of the draft Budget for 1932
and have succeeded in approximately balancing it on present banis of taxation by exercising greatest economy, by deferring public works and special services, other than comitments and absolutely
essential works, by cutting down maintenance Vote to the lowest
possible level, and XIII by reduction in staff. No provision haa
been made in the Budget for Naval Arsenal or Gaol which I trust
you will approve being met out of surplus balance and loan respectively. Please see my despatch of the 7th August Confiden-
tial. If you consider it desirable that payment on account of Arsenal should be covered by Supply Bill, I suggest that this can be dona by allowing a deficit to the amount involved which would be met
out of surplus balance. The whole amount will it is anticipated be recovered on vacation of the Arenal. Further no provision has been made for a new Goneral Hospital or Mental Hospital which are most urgently needed.
· ទ
Increases in tobacco and petrol duties, a tax on perfumed spirit and a betting tax would it is estimated produce additional nett revenue of $1,922,000 after deducting military omtribution This additimal taxation is not unreasonable or oppressive, and would, if you so wish, allow sterling salaries to be paid at ourront rate of exchange, involving an increase of about $1,250,000 and leave a surplus of over $500,000 to be spent on urgent measurOv at present omitted from the draft Budget for lack of funds. On the subject of salaries cost of living has not yet risen in dollare proportionately to drop in exchange and payment of salaries three quarters at full rate and one quarter at 1/6 would I think remove any legitimate grievance based on the cost of living
living
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