3.
12
the initial expense could be met. A case could be made
out for the raising of a loan with this object. On the other hand it might well be desired to undertake some schemes which would be definitely worthwhile from the
social point of view but which might not show a financial
return sufficient to cover the charges on a loan; and I should be reluctant to confine the operation of such a
fund to schemes which could be shown to be self-supporting.
6.
I venture to suggest, therefore, that the
Colony would be amply justified in utilizing for the
purposes of such a fund part of the income and possibly
part of the existing surplus of the Exchange Fund. Taking
the recently published figures of the position at 30th
June, 1938, the Fund's assets exceeded its liabilities by
approximately £1,100,000. After allowing a depreciation
reserve of ten percent on that part of the liabilities which was not covered by assets in cash or deposits, there was an "excess" surplus of over £250,000, approximately $4,000,000. The position of the Fund to-day is stronger
still and its current net income exceeds $4,000,000 per
annum. It will, I think, be agreed, therefore, that the
surplus is already more than sufficient to cover any
contingency against which it is reasonable to provide and
that there is no necessity from the currency point of view
to accumulate any further surplus. On the other hand I am
definitely of the opinion that it is at present, at least, undesirable that either the excess cover or any part of
the income should be treated as available for the purposes
of general revenue except as a last resource if the Colony
should experience acute financial difficulties. The
income derived from that Fund is to a very large extent
a windfall and I think it should be used for some major
purpose of long-term benefit to the community at large.