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Surplus

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those of a scheme where the Colonial Treasury assumes entire liability for pensions but benefits by favourable mortality results. 1 had intended to address Your Lordship on the subject at a later date but adjustment appears to present difficulties in a time of financial depression,

D

if it can in the

8. The moneys of the Widows' and Orphans' "' Fund be strictly so called, are therefore regarded as invested various assets of the Colony, including a variety of advances '' the repayment of which is in some cases unfortunately proble- matical. Amongst these advances are the balance due by the Rail- way Department in respect to stores taken over on the separation of the Railway Accounts from those of the Colony (Rs.2,020,001) and Rs.2,650,000 advanced to the General Manager of Railways for general purposes. As the Railway is unable at present to pay its working expenses these: advances must, I fear, be regarded as assets of doubtful value. If on final adjustment they have to be written off, or the liability of the Railway in respect to them largely reduced in amount, the nominal surplus of the Colonial Treasury would be reduced to a very low figure. Before this can be decided, however, it seems to me that some settlement must be arrived at as to the future working of the Railway, a subject which has been separately referred for Your Lordship's consideration.

9. In addition to the advance referred to above, there also appear among the assets miscellaneous advances amounting to Rs.2,145,000 which include Rs.495,592 advanced to the Munici- pality of Port Louis for electric light, markets and other Municipal works, Rs.657,039 advanced for installation of household sewerage apparatus, and approximately Rs.300,000 advanced to various Dis- trict Boards, all of which are recoverable by annual instalments over varying periods of years. Of these advances, therefore, ap- proximately Rs.1,450,000 cannot be regarded as liquid assets. Taking these and other advances into account, as well as the amount locked up in stores, it will appear that the nominal surplus is swallowed up in advances of doubtful value or not immediately realizable. This is an unsatisfactory position, but I regret that I am not yet in a position to make final proposals in regard to it. In the meantime, the situation appears to me to depend on the view taken as to the liability appearing under Widows' and Orphans' Fund. If it be held that this liability must be covered by realiz able investments, then I fear that "surplus must at the moment be regarded as nominal only. I submit, however, that the position in respect of this Fund does not differ in its essence from that existing in Colonies where there are Widows' and Orphans' Pension Schemes in force under which the Colonial Treasury accepts liability for these pensions and no provision for the ultimate total contingent liability appears in the Balance Sheet of the Colony. In these circumstances, the potential liability on account of this Fund standing in the Balance Sheet might be disregarded in the

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present circumstances and investments standing against Funds" in the Balance Sheet realized as proposed to finance the Treasury. I can suggest no other way of meeting the immediate emergency.

10. The position cannot be regarded as satisfactory, but I hope that it will not be found incapable of adjustment. It is difficult to form a clear picture as to the outlook until the draft Estimates for 1931-32 have been formulated: material for these is now being prepared. The immediate situation of the Treasury is prinicipally Jue to-

(a) Remission of Export Duties on sugar, which in the circumstances was unavoidable;

(b) Cash Advances to La Nicolière Works and the Railway. Correspondence is now proceeding regarding the conditions arising under (b) and I hope to be in a position to address Your Lordship before long on the position under (a). Meanwhile, I suggest that there is no alternative but to allow the proposed sales of securities to proceed. 1 should add, however, that when I despatched iny telegram No. 140 I was under the impression that the sum of £75,000 which it was proposed to realize would be sufficient to meet the needs of the Colony in London and also the requirements of the local Treasury. The Acting Receiver-General has, however, since informed me that this is not the case and that the whole of this sum will be needed in London. It has accordingly been necessary to sell locally Rs.500,000 in 6 per ceut. Bonds of the Sugar Industry Loan, 1926, held on behalf of the Improvement and Development Fund to recoup advances made by the Treasury on behalf of that Fund.

P.S.-I may

I have, etc.,

W. E. F. JACKSON,

Governor.

add that the actual cash balance in the local Treasury on the 8th January was Rs.468,300 as compared with the estimated amount of Rs.336,586. The above despatch, however, was drafted before the actual results of the transactions on that day were available.

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