South China Morning Post:
13/10/3945
CONSERVING EXCHANGE
The Governor said:
"It had been my intention! to present a short address to you on this occasion more or less on the lines of that which last year endeavoured to review the salient facts of the preceding twelve months and the more important schemes under Government's consideration. I regret very much that the rush of work caused by Herr Hitler's intro- missions has prevented that intention from being fulfilled, and all the more because there has been good progress in many administrative activities and social services which is deserving of record.
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"I propose, accordingly, to confine my remarks on this occasion to the financial policy and intentions of the Government and I conceive that these will be more rightly appreciated if I first invite attention to the declared policy of His Majesty's Government in this regard. If one were to com- pare the manner in which this war is being faced by the Government of Great Britain with that of 1914 fundamental difference would at once be observed. Then, armies, ad- ministrative departments and war organizations and requirements of all kinds had to be hastily improvised and the national finances were left to be carried on along normal peace lines; to-day the situation at home presents entirely the contrary pic-' ture. The likelihood of the outbreak of a major war: between Great Britain and Germany had long been foreseen, plans had been laid to meet the emergency and the appropriate economic policy had been thought out! and made ready.
"It will be generally agreed, think, that the outstanding feature of the economic plans of His Majesty's Government, as disclosed in the speech of the Chancellor of the Exchequer on September 27 when he introduced his first war emergency budget, was his insistence upon the importance of paying for the war from revenue as far as that was possible. The inevitability of having also to raise war-loans was clearly recognized but the immediate step taken was the imposition of heavy additional taxation: at the same timel he urged most strongly that it was the duty of the private citizen and. of the public institution to avoid all unnecessary expenditure in order! that savings might accrue for sub-i sequent investment in war loan. It! is an inspiring fact that the Britishj taxpayer has readily, not to say cheerfully, accepted the unprecedent- ed burdens laid upon him.
What of Our Duty?
"So much for the way in which the taxpayer at home is facing his duty: what of the duty which lies before us in this small unit of the British Empire? I hope and believe that there will be universal acceptance here of the fundamental principle that our responsibilities in Hongkong towards Great Britain are in no way less than those of British subjects re- sident in the United Kingdom: and that just as they are prepared to bear whatever burden the successful conduct of the war may impose upon them, so we also must leave nothing undone that we can do towards that end. In other words, this is every whit as much
our war as it is
Britain's.
ANTR
"it is in accordance with that prin- ciple that the financial proposals that will be placed before you at this session have been framed and I take this early opportunity of saying that! they are not to be looked upon as the maximum demand that may be made on the local taxpayer before victory crowns our arms: They are, how- ever, all that we can wisely do at the moment,
Separate Budgets
"With this object in view it is Government's intention to replace the budget which is formally before you to-day by two separate budgets: the former will provide for the formal expenditure of Government depart- ments, the latter is designed to fulfil our obligations as a member of the British Empire while engaged in a major war.
"It may surprise you that what I will describe as the ordinary budget does not shew greater reductions in expenditure. The estimates, of course, were fairly well advanced when war broke out and early in September we were in the act of con- sidering the extent of which they should be cut down when I received from the Secretary of State some very valuable guidance.
"In effect Mr. MacDonald's counsel was that, subject to two provisos of which I will make mention later, there should be as dittle disturbance as possible with the Colony's current activities and developmental schemes, so long as revenue to finance them would be forthcoming. In particular the desire was expressed that exist- ing social services and approved plans for their extension should continue as far as was possible; furthermore any marked retrenchment in the Civil Service was deprecated unless and until we were advised by him so to act.
"It will be agreed, I think, that this confident policy, which un- questionably reflects that of His Majesty's Government, is very en-
time heartening at such a present.
Two Provisos
as the
ex-
"The Secretary of State's two pro- visos, which I mentioned just now as being conditions to be observed in framing the estimates, dealt with the following points. Firstly, the great
the importance of conserving
Great change resources of
Britain through control over the purchase and export of foreign currencies and of those British currencies which are not on a sterling footing.
"Hongkong's procedure in this re- be spect, it was found, could not quite "on all fours" with that of other British Colonies because of the predominating importance of our entrepot trade, and special treatment of the problem was therefore per- mitted to us. I have asked the Honourable the Financial Secretary to give the Council a connected ac- count of the measures taken by Gov- ernment with this end in view, and I myself shall have a further word to say on this subject when speaking of the revenue estimates.
the
men,
"The second point on which Secretary of State expressed a pro- viso was the avoidance of expenditure which, by creating a demand for un- essential goods would deflect materials and shipping from war purposes. In this connection I may say that I had already given orders that work on my successor's new house should be stopped before this wise advice was received!