No.84.
Sir,
53652/38 58
GOVERNMENT HOUSE,
HONG KONG.
21st November, 1938.
Enclosure 1.
1.
I have the honour to refer to my despatch
No.754 of 8th October, 1938, with which I transmitted copies
of the draft estimates of revenue and expenditure for 1939
as introduced into Legislative Council on 13th October and
to transmit copies of revised draft estimates which were
approved by the Legislature on 10th November.
2.
The original draft estimates were framed, as
explained in the memorandum by the Financial Secretary which
accompanied them, on the basis of a continuance in 1939 of
substantially the same financial conditions in the Colony as
in 1938. In particular it had been assumed that there would
be no serious decline in revenue. On the day previous to
their formal introduction into Council, however, the Japanese
invasion of Kuangtung commenced and it was necessary when
the estimates came to be discussed in Select Committee under
the new procedure to consider whether they should be amended.
in view of the possible repercussions of that invasion.
3.
With the approval of the Select Committee it
was decided to make no changes in the estimates of revenue,
not so much because it is still regarded as equally likely
that the estimated revenue will be obtained as because of
the absence of any firm foundation for any alternative estimate.
In actual fact the revenue so far has shown no sign whatever
THE RIGHT HONOURABLE
MALCOLM MACDONALD, M.P.,
&c.,
&c.,
&c.
of