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The revised revenue figure is approximately
$68 million in excess of the approved estimate. When the
were prepared, the political horizon was dark, and, while due regard was paid to all foreseeable factors, it was recognised at the time that developments might occur which might seriously affect the totals either way. Fortunately the developments were favourable and trade so far from falling off, reached another record figure. It was also in better balance. Even where China was concerned, trade showed an upward movement, a slight drop in trade in South China being more than off-sot by increases with Central and North China. These results were of course largely due to the closure of Shanghai and the consequent diversion of cargoes here.
All the main Heads are expected to exceed the estimates. A number were automatically affected by the large influx of population resulting from the unsettled political conditions in China. For this reason receipts from such items as royalties from transport companies, entertainment tax, dance halls tax, liquor duties, bets and sweeps tax, restaurant meals tax, water, postal and railway services rose considerably.
Tobacco, however, was the main source of the large revenue surplus. As a result of the generally unsettled conditions in the surrounding areas and interrup- tions in the normal distribution of cigarettes from the Shanghai factories, exports of duty paid tobacco suddenly rose to quite unexpected levels. The revenue from tobacco dutios is now expected to exceed the approved estimate, based on receipts for the previous year, by nearly $17,000,000. This is rather more than double the original estimate and the excess is approximately equivalent to last year's total receipts. For somewhat similar reasons,
a considerable proportion of the exports of liquor and petroleum products, instead of passing through the Colony in bond, has paid local duty.
The revised expenditure figure exceeds the approved estimate by just over $52 million. This excess would have been much greater but for an appeal issued early in the year to Heads of Departments to exercise every possible economy. At that time revenue prospects did not appear to be very satisfactory, and expenditure on defence and internal security was obviously going to be considerable. The response was very satisfactory, as is shown by the fact that in spite of very heavy internal security expenditure which, including Police and Defence Force expenditure, is expected to reach $32 million, the original expenditure estimate was only exceeded by a comparatively small amount. Some millions of the defence and security expenditure would normally have been met by the Service Ministries, but under a proposal that expenditure carried out by the Public Works Department at the request of the Military Authorities should rest whe re. it lies, this was mot from Colonial funds as part of the Colony's contribution towards the cost of reinforcing the garrison.
The estimated general revenue balance to be carried forward is as follows:-