4
94
A survey of the Colony's trade figures is hardly encouraging and one knows only too well the difficult times through which all mercantile concerns' are passing. But for the favourable movements in exchange in the years 1934 and 1935 the deficits, substantial as they were, would have been con- siderably larger and revenue raising devices or curtailment of expenditure would have become essential.
The Honourable Colonial Treasurer, in his able and lucid Memorandum, indicates under the heading "1936" the general falling off cf revenue and the possibility of further shrinkage in various directions. The Honour- able Colonial Secretary has also drawn our notice to the same possi- bility. Personally I take an even less hopeful view; in fact, I am of the opinion that there must be a further dwindling of our revenue.
The principal items of the Public Works Extraordinary which we have on hand are essential to the Colony and had already been too long delayed --chief of these are the Queen Mary Hospital, the Central British School, the Magistracy at Kowloon, the New Gaol and, most important of all, our water schemes. Of these the water schemes and the new gaol are loan works but the others have to be paid for out of current revenue.
No-one will deny the importance and absolute necessity of these works, nor will anyone cavil at the money judiciously spent on them, but the most scrupulous care must be taken to ensure that they are provisioned in a manner suitable for the purposes for which they have been provided and that misguided enthusiasm or indivi- dual sentiment is not allowed to run riot in luxury and
extravagance. Care must be taken that we are not providing an El Dorado for those less fortunately circumstanced in South China, or creating a standard which will be an undue strain on our re- sources to maintain.
Share Values
Perhaps our most solid asset is ur landed property. Here the values cause us to think seriously. Rents on an average have fallen somewhere in the neighbourhood of 30 to 35 per cent. in the past two years and the value of property about 40 per cent. These percentages are worked out on a broad basis for the whole Colony and are intended to represent middle figures. I have obtained them from two of our leading architects.
Lack of Business
From the merchants we hear on all sides complaints of lack of business, and who is there who has not written down his balance sheet by something in the neighbourhood of 50 per cent? Who have not made efforts to reor- ganise, reduce staffs, made cuts in salaries and generally attempted to economise in all directions? In view of the circumstances prevailing how can Government expect to collect re- venue to anything like the extent it did in more prosperous times? It cannot, and it will not.
Bearing in mind these facts, and taking into consideration the great uncertainty of the exchange, what should be done? I am not for a mo- ment suggesting that present condi- tions are permanent: they are a pass- ing phase of very uncertain duration which, like similar cycles of depres- sion in the past, have had to be faced. The Colony has no public debt worth speaking of, its speculative position is moderate compared with many other places and the general situation is that of a cash position. Under these circumstances the Colony will easily adjust itself and when re- covery comes, it will come quickly.
We must not, however, be forgetful of the fact that undoubtedly some of the entrepot trade which formerly came through Hongkong now goes direct to China and probably will not return to this Colony.
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Cutting Expenditure
I am not unmindful of the fact that in the 1934 Estimates of Public Works Before proceeding further I think
Recurrent there was a reduction of a short survey of the local position $78,750 and in 1935 of $143,100, but is not out of place to enable us to
these drops in the ocean are quite get a correct perspective of business inadequate if we are going to ensure conditions as they in fact exist to-day.draw further on our surplus balances. a balanced budget and not continue to The stock market is a fair barometer and I have obtained the market values of various popular shares, taking the highest prices in the year 1933 and the approximate values to-day.
In 1933 the shares of the Dairy Farm, Ice and Cold Storage Company Limited touched 29: to-day they
We must have a 10 per cent. reduction on the Colony's total expenditure, which would mean reducing the estimated total expenditure to $26,- 638,334 and would balance the budget with a small margin in hand. How this is to be done I am not in a posi- tion to say as I have not the special In 1933 the shares of the Hong-knowledge of Government Depart- kong Electric Company Limited touch-
ments, but I do know, that if I have ed 78: to-day they stand at 52.
£100 in the Bank I can't spend £120. In 1933 the shares of the Hong-Government only has the knowledge kong & Kowloon Wharf & Godown
stand at 12%.
Company Limited touched 145: to- day they stand at 73.
In 1933 the shares of the Hong- kong Land Investment & Agency Company Lin Lod touched 80: to-day
hey stand at ...!.
In 1933 the shares of the Hong- kong & Shanghai Hotels Limited touched 10,90: today they stand at
મહત્તમ the shares of the Hong-
ramways Company; Limited guilla (43-to-day they stand at 10.65.
que saudi a a diw 239nique The shares represent a part of the life-blood of this Celen, and it iston the sequity; ofišhain values that much business isstravalicinommier
Since prepasionɔifethik speech there has been slight depseiation! in value, so thaththe figures Iquoted for this year should be regarded as the lowest touched this year.
of how it can be done, and done it must be, otherwise Sir William Peel's successor will find a position far more difficult to tackle than it is to-day.
It can only be done by a careful ment Service with a view effecting survey of every branch of Govern- substantial economies, and as a hint I would suggest that Government might, with advantage, turn its eyes on the Medical, Education and Har- bour Departments where some sub- stantial economies might be made.
Government servants so far have been more fortunate than their col- leagues in other Colonies as regards cuts in their salaries, although it can- not be denied a rising dollar auto- matically produces to the recipient fewer dollars on a sterling salary and thereby costs the Government less. But, as far as Government servants in this Colony are concerned, they re- ceive their salaries at the rate of the day, up to 2s. If the dollar i rises
above 2s. they are paid at 2s. Acting allowances, travel- ling allowances, house allowances and
rents should receive atten- tion. I think it is the unanimous view of the public that increased taxa- tion is out of the question at the pre- sent time.
Definite Proposal
Should Government be of the opin- ion that an immediate reduction of 10 per cent. in the Colony's total expenditure is absolutely impossible then I must press for a reduction of
per cent, and the taking of $1,000,- 000 only from the surplus balances, leaving a further $1,000,000 to assist us in tiding over the year 1937. Any other course would in my opinion be financially indefensible and fraught with the gravest danger.
These proposals should place no undue strain on the Government administration as it is always open Committee for a supplemental vote in to Government to come to the Finance case of absolute necessity...
My experience of life is that if there is money in the till it will surely be spent, whilst a deterrent such as the necessity for a supplemental vote compels the Head of the Department concerned to think twice before he comes before the Finance Committee and applies for more money. As it is not my desire to force this issue to a division, I can only express the pious hope that what I have said will not fall on deaf ears or barren earth, but that a great effort will be made to balance the Budget. (Applause.)
LOWER TAXES PLEA
Economise by Employing Of Local Men.
MR. KOTEWALL'S SPEECH
The Hon. Mr. R. H. Kotewall said: --Sir I shall, as I did last year, abstain from comments on individual items in the Estimates, but confine