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and rate of development expenditure over the next few years, will be appreciably reduced, and the financing of such schemes will thereby be greatly facilitated, I also propose that future profits on the trading accounts, after deduction of interest charges, should be transferred to the Development Fund and not to general revenue.
10. I have mentioned in respect of the period ended 31st March, 1950, that no interest has been charged in the trading accounts on advances made to finance purchases of stocks. Assuming that approval for the proposed appropriations of the accrued profits is given, the position will be that Government will have committed a sum approaching $90 million in the acquisition of these stocks of commodities, and but for these trading activities, Government would have that sum available either for investment, for the redemption of outstanding loans or for the financing of other Government expenditure, In fact, the stage may be reached where the scale of investment required to implement the stockpiling programme may so deplete Government's current working cash balances that it may be necessary to realise sterling investments, and so deny to general revenue the income which at present is accruing to it, and which will not be offset by the transfer of trading profits as these will accrue to the Development Fund. I am also concerned that if interest is not charged in the trading accounts a misleading impression is given as to the margin of profit which is being taken by Government, which may lead to a good deal of ill-informed criticism, I therefore propose that as from the 1st April, 1950, interest at 3% per annum should be charged in the trading accounts on the maximum monthly balance on the combined Suspense Accounts as part of the expenses of the Department, and that this interest should be credited to general revenue.
11. I regret the delay in submitting these Accounts and proposals to you, but the clarification of a complicated mass of detail had to be completed before it was possible to get a clear picture upon which to base the proposals dealt with in this despatch. I should be grateful, however, in view of the bearing of the se proposals on statements to be made at the time of the presentation of the Estimates, if you would be good enough to let me know as soon as possible whether you agree to the adoption of the Accounts as presented by Messrs. Lowe, Bingham and Matthews and to the charging of interest on advances to the trading Suspense Accounts, and agree in principle to the setting up of the Development and Essential Commodities Equalization Funds.
I have the honour to be,
Sir,
Your most obedient, humble servant,
GOVERNOR.