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There is an element of unreality at this
date in the Hong Kong despatch of the 4th of October,
(No. 6 on this file), and many of the important
figures appearing in the despatch have lost their
significance in view of more recent occurrences.
The Hong Kong financial position is at
present affected by two major developments, (i) the
trade depression, (ii) the sterling exchange. These
are from an economic point of view to a considerable
extent related, but I think it is necessary to
distinguish them in considering the present budget
for 1936. The downward tendency of revenue latterly,
appears as follows:-
Revenue
Estimated
Revised
Actual
1934
$31,731,000 $29,670,000 $29,574,000
1935
$30,585,000 $28,328,000
1936
$26,672,000
To meet this position, expenditure has been
progressively cut:-
1934
Estimated
$33,442,000
Revised
Actual
$31,149,000
1935
$32,556,000 $28,481,000
1936
$29,598,000 (including $3,207,000
Extraordinary expendi-
ture).
We have, however, just learnt that the
deficit on the actual figures of revenue and expendi-
ture for 1935 is likely to be approximately $1,000,000.
The O.A.G. states, in paragraph 6 of his despatch,
that it has been recognised that in framing the
estimates of expenditure for 1936 it is essential that
the utmost economy should be exercised. The provision
for Public Works Recurrent has been cut down, and no
new
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new Geneal Hospital, a the new Prison, 8 the major section of