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Enclosure 2.
53941/38
Enclosure 3.
6.
The items struck out of the estimates and a
statement on the general position were detailed in a speech
made by the Colonial Secretary when reporting to the Council
the work of the Select Committee and moving the approval of
the amended estimates. A copy of this speech is enclosed.
It will be seen that several important works foreshadowed in
the proposed programme of major public works, which was the
subject of correspondence ending with your despatch No.302
of 23rd September, 1938, have been postponed. I enclose in
this connection a revised copy of the memorandum on that
subject which was laid before Legislative Council together
with the original draft estimates for 1939 on 13th October.
7.
I am not without hope, however, that the
financial outlook in the early part of next year will warrant
some, at any rate, of these excised items being undertaken on the authority of supplementary votes. I propose to review
the situation with this in mind, as well as the alternative
possibility of having to make further cuts, shortly after
the commencement of the financial year.
8.
As already stated the estimated deficit now
shown is $1,659,898. While I agree that in ordinary times
a reserve of $10,000,000 is not high in view of the magnitude
of expenditure and revenue I submit that a surplus of
$11,867,025 is not unreasonable in the present difficult
circumstances. Apart from the justification of using part
of our reserves in such circumstances it must be borne in
mind that the surplus at the end of 1939 will be more fully
liquid than that shown in previous statements of account as
it will no longer include the value of unallocated stores and
outstanding loans, in respect of which it is proposed to charge approximately $980,000 to the existing surplus at the
end of 1938.
9.
I have accordingly to request your approval of
the