I have
cashed 3. a bee for this
OUG.
? Approve the variations in the Schedule,
and note para. 2 of the despatch.
4.
? Put by.
14
6.
See Table on 1936 file.
See 6.
This telegram is registered for record,
and may be put by.
5.
For the last few years Hong Kong Estimates
have been prepared under extraordinary conditions,
owing to trade depression and currency
depreciation. It was hoped when the 1937
Estimates were prepared that they marked the
end of this period and a return to more normal
conditions. A few months ago these anticipations
seemed to have been fulfilled. Hong Kong was
recovering from the trade depression, and seemed
at last to have reached a period of stability
and comparative prosperity. The levy on
salaries was finally removed in July. The
financial year for 1936 ended with a small
surplus of revenue, and the monthly revenue
figures for the first six months of 1937 also
showed a small surplus.
Now the Sino-Japanese conflict has
disturbed once again the normal life of the
Colony. At the moment its economic and financial
position does not appear to have been adversely
affected, but the outbreak of hostilities has
made calculation difficult, and there can be
no assurances of secured prosperity for next
year. At the moment the Colony has to some
extent gained from the situation by the
inevitable economic stimulus of war and from the
increased traffic in e.g. munitions. It has
also handled imports which in the normal course
of events would have reached China through
mone
Shanghai or other (northern ports. I suggest,
however,