new considerable Public Works Extraordinary are
being undertaken. There are, however, some
substantial commitments for existing Public
Works projects, e.g. especially the Water Scheme
in the New Territories, which must be finished,
and will be finished by the end of 1936, except
Section of the for the important Shing Mun Valley Water Supply
Scheme. Fortunately, the extensive "Government
House and City Development Scheme", which will at East in due course bring in its own return, can, as
far as present expenditure is concerned, be
interrupted until times are better, and in 1937
not only will a considerable cut in Public Works
Extraordinary expenditure be possible, but some
very valuable building sites will also fall to
the Government for disposal.
I think, therefore, that apart from
the exchange complication, the Hong Kong Govern-
ment can be said to have given adequate recog-
nition to the falling revenue and the necessity
to reduce expenditure in conformity, and that
the Colony is not running any serious financial
risks in the view it has taken in this budget.
Surplus balances at the beginning of
1935 amounted to $12 millions, and it seems
that these will be invaded to the extent of
,000,000 by the beginning of 1936.
As regards the effect of developments
in the sterling exchange, the budget for 193
has been framed on the basis of an exchange of
1/8d. The Hong Kong dollar is now worth 1/41d.
and it may be claimed that the recent change
over from silver to a managed currency will
prevent the Government from being exposed in
future