CO129-329 - Governor Nathan - 1905 [7-12] — Page 430

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probably, however, be necessary during the year to draw on

this anticipated balance for further preliminary expenses

or for interest on a loan on account of the Canton-Kowloon

Railway.

37980

024

9.

The excess of Estimates of Receipts

over those of Expenditure in 1906 would have been greater

had I not departed from the instructions contained in the

75th

7th. paragraph of your Despatch No. 338 dated the 25th.

(7th.

November, 1904, with regard to the assumed rate of the

dollar. In taking this serious step and maintaining the

same rate of 1 s. 8 d. on which the Estimates for 1905 was

based, I was guided by the opinions of the Chief Manager of

the Hongkong and Shanghai Bank and of the Treasurer that

this rate would be a safe one. It was anticipated that the

conclusion of peace between Russia and Japan would result

in a heavy fall in the gold-value of silver and though such

fall has not yet taken place it may follow the withdrawal

of the Armies now concentrated in Manchuria. If the

Treasury rate for the quarter in which the Estimates were

framed or the average value of the dollar in the local

market during the previous three months had been taken it

would have resulted in a much larger excess of estimated

receipts over estimated expenditure than is now shown

which