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of the retention of these items in the Estimates, and provision for this grant was included under the appropriate Revenue Head.

25. As you are aware, a Vegetable Marketing Scheme was inaugurated on the mainland in 1946. Hitherto, the vegetable auctions have been taking place in a disused tobacco factory, but the owner wishes to renovate the building and it is necessary for the Vegetable Marketing Scheme to find a new home. A site has been selected and estimates have been prepared for a market, but it has proved impossible to provide all that is required for a lower figure than $400,000. When the matter was discussed by the Estimates Committee, it was agreed that Government should either make a loan to the Vegetable Marketing Scheme of the sum required or that Government should itself build the market and charge an economic rent. The latter alternative was finally decided upon and provision for the sum of $400,000 was inserted under

the Public Works Extraordinary Head.

26.

The remaining changes recommended by Select Committee and adopted by the Legislature consisted of the inclusion of provision of $250,000 for the replacement of a conduit at Shing Mun which was considered a matter of urgency and the provision of $360,000 in order that a start might be made on a scheme for the provision of pavilions, with changing facilities, on the principal bathing beaches. Before the war, sites on such beaches were leased for the erection of huts and some of the structures erected were of a comparatively elaborate nature and tended to become permanencies.

The se were practically all destroyed as a result of the war and the wholesale looting which followed. The opportunity was taken to adopt a new policy which was designed to provide bathing pavilions on the more accessible beaches and possibly separate compartments which could be hired by the day. There is a strong feeling locally that this scheme should be proceeded with this year and the sum provided will enable a start to be made on the beach at Repulse Bay, which is the most popular of the bathing beaches. Until the pavilions can be erected, arrangements have been made for the erection of tents which can be hired by the hour or by the day at controlled prices.

27. As was stated in my telegram No. 242 of the 3rd March, a sum of $200,000 has been included to enable preliminary work to be started on the two reclamation schemes

at Hung Hom Bay and Connaught Road Central. I trust that you may find it possible to support my proposal that a loan free of interest, or at a very low rate of interest, may be granted from Colonial Development and Welfare Funds for the completion of these schemes. The reclamation of land suitable for building purposes is of increasing importance. It brings in a satisfactory return ultimately, but in this case, the initial outlay will be very heavy although no further funds will be required during the present financial year.

28. In addition to the funds voted in the Appropriation Ordinance to meet recurrent expenditure, the use of loan funds will of course be continued and the bulk of the expenditure on rehabilitation will continue to be met from this source. Up to the 31st March, 1947, expenditure from loan funds amounted to $30,360,747 and it was estimated that by the 31st March, 1948, this figure might have been increased to $73,000,000, though information received since the Estimates were approved by the Legislature indicates that the actual figure will be considerably lower as stores which were due for delivery by the end of March have been further delayed.

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