―
A 40
GENERAL.
22. The Estimates for the year 1936 were based on an exchange rate of $1-1/8d. A commencement is made in preparing the estimates for the following year as early as May each year and at that time in 1935 exchange stood at over 2/-. The 1935 Estimates had been based on a figure of 1/4d. and it was considered sufficiently prudent to base those for 1936 on a rate of 1/8d. Subsequent events, culminating in the passing on 5th December, 1935, of a Currency Ordinance setting up the machinery which now controls the exchange value of the Hong Kong dollar, completely altered the situation. Before the year began exchange had fallen to 1/3 and throughout the year it remained somewhat below that figure.
In preparing the budget for 1936 a deficit of $2,926,303 was estimated for and it is clear that if that figure was expected at an exchange rate of 1/8d., a very much greater figure was certain to emerge with exchange round about 1/3d. In fact, however, final figures for the year showed a surplus of $529,464. Revenue increased by as much as $3,871,139 and Expenditure was less than the original estimate by $84,628. This was in part due to a drastic cut in the salaries of all Government officers. Under the Hong Kong Government Service (Levy on Salaries) Ordinance No. 17 of 1936, a levy of varying percentage was imposed on all sterling salaries exceeding £240 per annum and on all dollar salaries exceeding $240 per annum. In addition, all sterling salaries were converted into dollars at fictitious rates of exchange which were 1/6d. for the first quarter of the year, and 1/51, 1/43 and 1/34 for the subsequent quarters. The saving effected by these three methods was approximately as follows:--
Percentage Levy on Sterling Salaries $308,800 Exchange Saving on $651,700 Percentage Levy on Dollar Salaries $207,600 Total Saving $1,168,100The severity of the exchange levy was later modified in respect of married officers with one or more dependents in a sterling country which reduced the saving to about $1,140,000.
23. Under "Other Charges", though many sterling items were higher on account of lower exchange, considerable savings were effected by the exercise of rigid economy, the total provision being $4,103,941 while $3,742,653 was expended—a reduction of $361,288.
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A 40
GENERAL.
22. The Estimates for the year 1936 were based
based on an exchange rate of $1-1/8d. A commencement is made in pre- paring the estimates for the following year as early as May each year and at that time in 1935 exchange stood at over 2/-. The 1935 Estimates had been based on a figure of 1/4d. and it was considered sufficiently prudent to base those for 1936 on a rate of 1/8d. Subsequent events, culminating in the passing on 5th December, 1935, of a Currency Ordinance setting up the machinery which now controls the exchange value of the Hong Kong dollar, completely altered the situation. Before the year began exchange had fallen to 1/3 and throughout the year it remained somewhat below that figure.
In preparing the budget for 1936 a deficit of $2,926,303 was estimated for and it is clear that if that figure was expected at an exchange rate of 1/8d., a very much greater figure was certain to emerge with exchange round about 1/3d. In fact, however, final figures for the year showed a surplus of $529,464. Revenue increased by as much as $3,871,139 and Expenditure was less than the original estimate by $84,628. This was in part due to a drastic cut in the salaries of all Government officers. Under the Hong Kong Government Service (Levy on Salaries) Ordinance No. 17 of 1936, a levy of varying percentage was imposed on all sterling salaries exceeding £240 per annum and on all dollar salaries exceeding $240 per annum. In addition, all sterling salaries were converted into dollars at fictitious rates of exchange which were 1/6d. for the first quarter of the year, and 1/51, 1/43 and 1/34 for the subsequent quarters. The saving effected by these three inethods was approximately as follows:--
Percentage Levy on Sterling Salaries ...$308,800 Exchange Saving on
71
Percentage Levy on Dollar Salaries
Total Saving
651,700
$960,500
207,600
$1,168,100
The severity of the exchange levy was later modified in respect of married officers with one or more dependents in a sterling country which reduced the saving to about $1,140,000.
23. Under "Other Charges", though many sterling items were higher on account of lower exchange, considerable savings were effected by the exercise of rigid economy, the total pro- vision being $4,103,941 while $3,742,653 was expended-a reduction of $361,288.
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