156
6
Recurrent and loan expenditure during the next two or three years will be heavy, as rehabilitation, to be effective, must be carried out rapidly and cannot be spread over a long period. Relatively heavy borrowings are, therefore, inevitable and if the Colony has, from its own resources,
to make good war damage, even though only in part, our borrowings will be increased beyond the bounds of prudence. Hong Kong has no surplus balances to fall back upon and even the Exchange Fund has been seriously weakened by the duress note settlement. During the years of Japanese occupation, while no revenue was accruing, it still had to meet loan charges and the salaries of its officials in internment. The future therefore holds out small hopes for the re-establishment, far less the expansion of hard-hit social services and for development generally (repeat generally).