54
See Moguntir My Caine's minutes
under (7) in
53552/35
* Financial Report for 1935, para 12 (cops annexed.
para. 7.
consequent fall of the sterling value of the
Hong Kong dollar to about 1/4, which involved a very
considerable rise in the cost to Hong Kong of the
sterling remittances and salaries.
Even then it was felt that though the
position was serious, it was not really hopeless, though justifying the imposition of the salary levy
on the assumption that the above Estimates were
correct. The actual outturn of the financial year
1936 has, however, been materially different, as is
shown by the following facts:-
(i) Surplus balances at the end of 1935 amounted
x
in fact to $12,387,669, the year 1935 having, against
expectations, resulted in a small surplus of
$138,914.
x
(ii) It is reported in this despatch that the
surplus balances at the end of 1936 will probably
amount to $11,250,000 this in a despatch not
-
distinguished by optimism
-
a sum considerably in
excess of the estimate when the levy was sanctioned.
I do not find it clear from this despatch
on what grounds the Hong Kong authorities base their
contention that 1937 will result in a deficit of
£33 million; and in view of the way in which the
gloomy prognostications for 1936 have been falsified,
I