3
"excess" surplus of $4,000,000.
The current net
income from the Fund is between $4,000,000 and
$5,000,000 annually.
The proposal outlined by the Governor is
that an initial sum of, say, $5,000,000 should be transferred from the Exchange Fund to a new
Improvement Fund, which would receive annually a half
of the net addition to the surplus of the Exchange
Fund. If necessary, the Improvement Fund could
borrow further sums (though probably this would not
be necessary), the charges being met by the annual
payment from the Exchange Fund. As it would also
receive the proceeds of land sales from schemes
undertaken from it, these additional payments might
in time prove unnecessary.
The Fund thus constituted would be used for
rehousing schemes and germane matters, i.e.
ordinary governmental construction schemes.
not for mabeg
The possibility of utilising part of this
surplus of the Exchange Fund had already been raised
in a letter from Mr. Caine to Mr. Clauson at 21 on
15117/18/38 Economică. It was then stated that it
was not contemplated that any of the surplus should
be used in relief of ordinary revenue; and this is
restated by the Governor in paragraph 6 of his
despatch. At 22 on that file, it was agreed that the
currency is already over-secured; and it was diterofore
suggested that one way of using the surplus would be to
convert it into a capital fund, the interest of which,
together with the interest on the main fund itself,
should be used in relief of the public revenues.
The present scheme seems to me to provide
an