CO129-388 - Governor Sir Lugard - 1912 [1-2] — Page 13

Conclosure

eetract.

from HK. Daily Press

I have spoken on more than one occasion with regard to the man- ner in which the accounts are presented to the ratepayers. I think on one occasion the reply given was that the form in which the accounts were rendered was in accordance with a certain dispatch from a certain Secretary of State. However, be that as it may, it does not seem reasonable that the accounts of an important colony like this should be put before us in such a form that it is neces- sary for the ordinary business man with some knowledge of accounts to spend hours and days wading through books before he can find what the proper financial position of the Colony is. Now take this paper, the financi statement in connection with the estimates for 1912. The heading is "Statement of assets and liabilities on the 31st December 1910." That is, I take it, of the assets of the Colony, and that is in effect the balance sheet laid before the ratepayers of the Colony. If it is, I do not understand it in the least. Amongst the assets there is the sum of $6,144,111,41 for railway construction. This appears to be the amount spent out of the £550,000 repaid by the Viceroy of Wachang, hat it is not at all clear. The total amount spent on the railway down to last year was $11,884,427 Of this, £550,000 was toovey refunded by the Viceroy of Wuchang; 1 million dollars came from current revenue, and the balance was borrowed from the Crown Agents. These entries are on page 2 They show OR £550,000 at & rato of 19 an equivalent of 85,740.316, Well. I make £550,000 at 1:9 $6,285 714, a difference of about half a million. The next entry is put in aterling at two different rates of exchange but I bare not even attempted to check those Figure star 3 represen's a sum of £660,000 which remains to be refunded by the Vi. ceroy. There again the exchange is wrong, and the amount in dollars should be $7,542 852, a difference of about six lakhs. Figure star 4 is again worked out at 1/9, and that also is incorrect. There are two entries which on the face of them I do not altogether understand. The first entry is under the head of liabilities, deposits not avail. able, $234,356 01. I should be pleased if the hon. member ou my loft informed me what that amount is. I should also like to be informed whether the sinking fund is on page 2. The sinking fund appears as written off against the loan of the Crown Agents. Sinking fund investment is shown as £97,759 6s. 100, but I cannot see in the so-called balance sheet any entry, nor can I find any place where this money is invested. That, I think, ought to be explain- ed. Your Excellency spoke with satisfaction of the point that the credit balance of the Colony stood at $1,452 379, which gave us funds in band towards our public works. *That, of course, is based on this statement, and your Excellency presumably when you made that re- mark was under the impression that that was actually the credit balance of the Colony, but as far as I can make out it is nothing of the sort. I make out instead of a credit of 1 millions a debit balance of 23 millions, a difference of 4 millions. I may

be wrong, but I have taken a great deal of trouble over the matter, and only this morning complet ed the estimate of what I thought ile balance account should be. I find on the liability side no entry made at all for the lean to the Viceroy of Wuobang. We still owe that £1,100,000. That clearly ought to stand on the liability side of the account, together with the Crown Agents' advances. On the other side, instead of crediting the Colony with 6 million odd, little more than half the actual cost of railway construction, the whole of the amount paid for railway construction at the end of 1910, $11.884,227, should be entered as an asset, au not this six million odd. Then, again, another entry as an asset ought to be the amount still due by the Viceroy, £660,000, which does not appear. Avain, the sinking fund

of 10tutio

2728

12

ought to appear. If those figures the JAN 12

we would tid a deficit of $3 429,599.18 88 against a credit of $1,406,924.96. If this is not meant to be a balance sheet of the Colony I do not know what it is meant to be. We are entitled to have a balance sheet before us once a year, and this document must be the balance sheet, but no ratepayer would expect such a thing as this. Not a single auditor in the Colony dare put his rame to such a document and say. This is the balance sheet of the Company I represent." If there were such an auditor all I can say is that he would be very shor ly starving. I have done my best to find out the trne position of the Colony, and I am satisfied in my own mind that we have not this big credit balance you think we hare, but a deficit. That being so, the accounts ought to be made plain.

! I do not say that my accounts are correct, but they are as correct as I can make them from the figures supplied by the Government.