£21,875
€ 15,625
₤30:
3
Ines
mests
Dr. Buchanan
Mr. W.I.J. Wallace
1. The despatch at (2) in reply to (75) on 54147/48 gives details of how it is proposed to use the Hong Kong Government Grant of $4,000,000, and H.M.G. grant of £250,000 in order to justify requests for assistance from the C.D. & W. Fund.
20
The University has to find from its own resources $351,000 to supplement the Hong Kong Government grant for completing its programme of rehabilitation. To do this it expects to have $250,000 from savings an salaries and to be able to. scrape together the balance during the next two years, but the University has no solution to the problem of how it is to repay the interest free loan of $480,000 made through the Colonial Office in 1946.
3. By investing the H.M.G. grant the University hopes to derive by annual drawings of capital and interest an income of $347,300yNot only is this sum insufficient to meet the cost of the development, which is about $510,000, an amount that the University
year thinks necessary for its healthy continuance, but the H.M.G. grant will be exhausted at the end of 15 years.
4. In paragraph 5 there is a proposal, which appears to me to be justified, to increase the University's income by raising the fees 50 above the 1941 rate. The University also hopes that the end or the reduction of the high cost of living allowance will occur during the not too distant future, but up to 1951 the University expects to meet the high cost of living allowance from savings of salaries and increased fees from students.
5.. It would appear, therefore, that the Univers- ity is relying upon two very uncertain factors, a drastic reduction in the cost of living in Hong Kong and a rise in income from fees, in order to balance their present budget. All the estimates according to annexure B have been based upon the assumption that the present high cost of living is transitory but if this assumption is proved to be incorrect, and nowhere in the despatch is there any indication that cost of living is showing signs of falling, all the estimates are invalidated.
6. As it is proposed in paragraph 10 to increase the number of Junior lecturers, demonstrators and tutors to deal with an anticipated increase in the total number of students, the University is evidently confident that the estimated number of students in 1951-1952 will not be affected by the raising of fees; yet accoruing to paragraph 9 any proposal to create from fees a fund for use when H.M.G. grant is exhausted would be very strongly resisted. The shaky financial position of the University does not in my opinion justify the increase of staff proposed in paragraph 10, at least not until it is certain that the annual increase of students justifies these appointments, especially as $340,000 which means the greater portion of their annual cost comes to an end in 15 years. At the
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