8
98
Exchange Problem
In conclusion, I wish to make no more than a brief reference to ex- change and to the financial distress evident on all sides in the Colony, accentuated and, to some considerable extent, even brought about by the high exchange. To justify this association of acute financial distress with a high exchange I have only to point to the languishing state of our industries and the frozen condition of capital investments which have come to a crisis in the course of the last twelve months-a period which every- body recognises has synchronised with a high Exchange and abnormally high in relation to China.
our
to
Owing to the arrival of Sir Frederick Leith-Ross in China, I realise that this matter is, so speak, sub judice. But it is evident that the level of exchange in the Colony in relation to China's exchange and to world prices generally, is an important factor in the commercial and industrial prosperity of Hong- kong and plays an important part in any budget not only in regard expenditure but even more so, in the long run, in regard to revenue. I therefore hope that the benefits of Sir Frederick Leith-Ross's expert ad- vice and great experience will be made
}
to
available for this Colony as well as China and that he will in due tinie be invited to visit Hongkong in per- son. (Applause.)
TELEPHONE SYSTEM
Abolition of Government
Service Advocated
recently has not helped business but
Pessimistic View
financial difficulties than otherwise, a fall in dollar ex- change, if it occurred, would be likely in the long run. to attract more business
and to the Colony thus to broaden the basis of present
contributions. While
it has helped the Government to meet. Passing now to the criticism made its liabilities to other Administrations by the Honourable Sir William for postal services. Some readjust- Shenton, I would deprecate the more ment seems to be due.
Looking around, as
pessimistic view which he seems to everyone is take of the Colony's future. While doing, for possibilities of economising, it may be true that it would, in its the Committee of the Chamber of immediate effect, rather add to the Commerce also suggests that abolition Government's of the Government telephone system might be considered. It
scarcely seems an economic proposition to maintain a separate system to serve subscribers whose names occupy six pages in the Telephone Directory and it might be cheaper in the long run to add them to the system which serves 270 pages of subscribers. In the search for ways and means of reducing the cost of administration which must, I think, occupy a great deal of attention in the next few years, perhaps the Government will consider this suggestion.
I would like to add that I do not own any Telephone Shares.
(Laughter.)
THE GOVERNMENT REPLY
North Point Primarily Industrial Centre
CRITICS ANSWERED
Replying, the Colonial Secretary said: Sir,--The task of replying to the speeches on the Budget by the Unofficial Members has been siderably lightened for me by their appreciation of the difficulties of the Government and by their sympathe-
con-
POSTAL RATES TOO HIGH tic realisation of the regret with
Sir
which Government has found itself compelled to postpone many impor- tant items of public works. General satisfaction has been expressed at the Government's decision to avoid fresh burdens
on the community, even at the cost of leaving undone many things which, as in the case of the town planning scheme for the City of Victoria and the scheme for Yaumati area, considered to be long overdue.
sewer
may be
I
In dealing with the comments leave aside for the moment two. major points which Your Excellency has reserved for a more detailed an- swer.
The Hon. Mr. J. J. Paterson said:- Sir, In the absence from the Colony of the Hon. Mr. Bell I have been asked to say on behalf of the Com- mittee of the Chamber of Commerce, which he represents, that the Com- mittee finds itself in general agree ment with the observations made in this debate by the Hon. Sir William Shenton. The speech of the Honour- able Colonial Secretary in introducing the Budget indicated that the policy of the Government at present is to curtail expenditure; the only question is whether the proposed reductions go far enough. We agree with
The Senior Unofficial Member has William Shenton that they do not. referred in terms of eulogy to the Economic nationalism all over the anti-malarial work already accom- world restricts the free flow of trade, plished, and Government is grateful and while the disease continues with for this appreciation. In this, and its present virulence Hongkong, which in so many other ways, Government has been built up on the opposite depends for the success of any task policy, is bound
to suffer. Circum- on the enlightened co-operation stances compel us to reconsider from the public, and, while Government top to bottom the scale of an ad- agrees readily that it is possible for ministration which has grown up in officials to show excessive zeal more prosperous days. The Com- enforcing regulations, it will be mittee of the Chamber of Commerce readily understood how much a sue- fully appreciate the Government's un- cessful campaign against the mos- willingness to sacrifice any source of quito menace must depend revenue in times like these, neverthe-forcement of regulations designed to less they hope that opportunity will be that end.
It has always been the taken to make such readjustments as policy of Government to regard its will lead to a reduction in charges work in matters of hygiene as pri- on shipping. Although still severely marily educative and only secondari- depressed, shipping is likely to be our ly coercive; but it must be evident mainstay in the years immediately that the greater the extent to which ahead and should be encouraged as tact and persuasion replace prosecu- much as possible. The danger that tion for breaches of regulations, the work might be driven away from this greater the demands on the adminis- port on account of charges higher trative department and its staff. than are levied elsewhere is obvious to everybody. The Chamber of Com- merce also hopes to see a reduction in postal charges. High exchange
!
of
in
on en-
revenue
our
for facile optimism, it may not be present trade figures give no scope
out of place to remark that the decline is largely a matter of ex-
and that the amount change,
of
goods handled has in many cases actually increased. In sterling value the figures for the first seven months of this year showed an increase of 32 per cent. over the corresponding period for 1934. I may not be out of place also to remark that there is a tendency for local share prices to vary inversely with the dollar ex- change rate, a tendency which is re- inforced when the exchange market shows simultaneously increased ac- tívity; and that much of what ap-
pears as a slump in values is
reality the obverse of the late years of overtrading, when capital appre- ciation was a stronger factor in the determination of market price than investment yield.
Hon. Sir William Shenton may be assured that the question of rates of allowances to Government servants has already received attention, and that wherever the rates of allow- ances have been found to be cap- able of reduction they have been re- duced. In particular, although by reason of its geographical situation, the item Transport of Government must continue to be a heavy one in this Colony, economies have been sought by reduction of the grade of passage provided. It has not been found possible
on financial grounds, to adopt here in more than a trifling measure the recommenda- tions for increased privileges made by the Plymouth Commission. The rates of travelling allowance inside the Colony have recently been re- duced by General Order, and every effort is made to secure that they
do
no more than reimburse the officers with the minimum necessary expense. Subsistence allowance rates have also been reviewed and reduc- ed.
Rent allowances, being on a sliding scale depending ultimately on the rents actually paid, have also been automatically reduced in those parts of the Colony where rents have fallen.
Local Labour
A reduction in expenditure with- out loss of efficiency is possible only when the expenditure has been in the past
unnecessarily high; and, while Government is reconciled to some departure from the high stan- dard of efficiency set, it is obvious that the extent to which efficiency can be sacrificed is severely limited. It is therefore that vacancies are in many cases left unfilled, and that every effort is being made to sub- sorbed local for European labour. stitute as quickly as it can be ab-
The suggestion, but forward by my honourable friend Dr. Kotewall, of
fully dealt with by His Excellency the Governor on the second reading of the 1935 Budget last year, and there is nothing that can be use- fully added, Government's policy not having changed since then. It seems clear that this tax, as well as Our
a reduction in assessment tax was