amount could be provided temporarily, pending an
improvement in market conditions, from the cash
balances held by us on behalf of the Government,
or, if necessary, from the Joint Colonial fund.
5. We note that it is proposed to provide by
legislation for borrowing approximately $20,000,000,
to finance capital works in the Colony, and that the
amount should be raised in instalments over several
years as money is required to liquidate advances from
surplus balances and overdrafts at the Bank.
We see
no objection to the Government at once obtaining
legislative authority to raise sufficient money (a)
to pay off the balance of the Public Works Loan 1927
after allowing for the amount of the sinking fund and
(b) to cover the Public Works programme up to 1937.
In financing the works, however, we think that the
Government should bear in mind the fact that by reducing
their surplus balances to a low figure, they might be
placed in the position of having to issue a loan at a
time when conditions are unfavourable. If, therefore,
conditions are favourable at the time the conversion
loan is issued, they might consider the advisability of
raising at the same time sufficient further money to
already
liquidate the advances/made for capital works and to
provide for the estimated expenditure up to, say, the
end of the year 1932.
6. With regard to the legislation necessary, we
suggest that the Government might consider the enactment
of a General Local Loans Ordinance specifying in detail
the terms and conditions applicable to all future
Government
loans raised in the Colony.
Such an
/ordinance
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