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HONG KONG LEGISLATIVE COUNCIL.
The Hon. Senior Chinese Member has made a reference to bathing beaches. Government has every sympathy with this form of recreation, which is at the same time very popular and very desirable from a health point of view, and it has gone to a good deal of trouble to explore the possibilities of other sites. When it becomes necessary, owing to
owing to industrial development and port requirements, to go farther afield to Saiwan or elsewhere, I consider that Government should provide adequate road access.
The Hon. Senior Unofficial Member has raised a question in regard to a sterling contract made in 1931 which I consider scarcely relevant to the Budget now under discussion. I am prepared, however, to make a statement on the subject. The history is briefly as follows: In September, 1931, the estimates for 1932 having just been prepared on the basis of a shilling dollar, exchange fluctuated considerably as a result of England abandoning the gold standard. The sterling rate rose from 117%d. on September 21st to 1s. 2d. on the 26th, and after consultation with and on the advice of banking and business circles, where the view was held that the rate would not be maintained at that figure, it was decided promptly to obtain cover for a portion of our future sterling commitments and a contract for £200,000 at 1s. 3d. was made for 1932.
It happened, however, that when it became necessary to make remittances to the Crown Agents under this contract the dollar was higher than 1s. 3d., with the result that the remittances cost us more. dollars than would have been the case had we merely remitted as required at the current rate of the day. This additional cost is what is termed by the Auditor a "loss"; it is rather a misleading term and would not, I believe, be so used by a firm in similar circumstances. Having regard to the difficulties which had been encountered in balancing our Budgets, owing to the fluctuations of the dollar, I was definitely of opinion that we should take advantage of a marked appreciation of the dollar to safeguard the future to some extent and so ensure that in regard to our sterling commitments in 1932 we should not find ourselves seriously embarrassed by a possible further fall in the dollar.
In view of the Auditor's opinion I submitted the whole matter to the Secretary of State who, in his reply, expressed the view that the remittance of money exactly when money is required without the freedom to use discretion as to the best time for remittances would not be an advantageous procedure and would in the long run almost certainly result in a loss which could have been avoided. was of opinion that the Hong Kong Government, with the expert advice available locally, ought to be in a position to remit, broadly speaking, at the right time, and approved of my exercising my judgment in deciding on any individual occasion what is the best course to take in the public interest of the Colony.
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