6
For the Trade Loan
account
лев дил
Costar's muinte of 1/18/35
53652/35
3. The Estimates provide for a deficit of
$3.5 million. The sterling salaries are to be
converted at the Budget rate of 1/3, a reduction of
3 farthings. The Governor fears that the levy on
official salaries will have to be continued, though
it may be reduced by 20%. It is anticipated that
the dollar will remain about or somewhere below level
of 1/3; no new taxation is proposed, except for an
increase in the tax on motor vehicles from 30% to
40%. The completion of the public works referred to
and the absence of any new undertakings lead the
Colonial Treasurer to anticipate that the Budget for
1938 will be prepared with less difficulty.
4 The financial position of Hong Kong would
seem somewhat precarious. Revenue is below
expenditure and further has been increased by the
inclusion of $500,000 from the Trade Loan Reserve
Account. Even with this appropriation the excess
of assets over liabilities at 31st December, 1937 is
estimated at only $7,884,729, that is, over 2,000,000$
below the figure of $10,000,000 which it has been
the Colony's aim to maintain. On the other hand,
the levy on salaries has not been included in the
figures given, since special ordinance will be needed
to regularize its reimposition. If it is maintained
at the present rates, it will reduce the cost of
personal emoluments by $480,000 and raise the surplus
of assets to $8,364,729.
3 The policy on which the Budget has been
prepared is that it may be better to reduce tempor-
arily the surplus, rather than hamper trade at what,
it