CO129-425 - Governor Sir May - 1915 [10-12] — Page 716

expenditure on subsidiary coinage.

3. I greatly appreciate the

effort which has been made to reduce

expenditure, particularly in the Public

Works Department, but in spite of these

efforts I consider the financial position

of the Colony to be most unsatisfactory

at the present time.

I

4. You informed me in your telegram

of the 22nd December that the Colony had

no liquid assets; its overdraft at the

Hong Kong and Shanghai Bank amounts to

about $2,000,000; and it has no

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opportunity of borrowing in the open

market here. The Government is

therefore in the undesirable position

dependent oy

of being at the meray-of the Bank,

which can, I suppose, demand payment of

the overdraft at short notice. I shall

be glad to learn what rate of interest

is charged on the overdraft.

It is

possible

707

possible that the overdraft might be paid

off from the proceeds of the issue of a

loan locally, and I shall be glad to

learn whether you think that a local loan

of $2,000,000 could be raised successfully,

and if so on what terms. Any such loan would

no doubt take the form of short-dated bone,

redeemable in say 5 years.

5.

In any case it is evident that

further effort must be made to place the

finances of the Colony on a sound footing

both to balance revenue and expenditure

and to provide for a speedy reduction of the

overdraft or for the debt charges and

eventual redemption of the bonds anould

such bonds be issued.

6. So far as further savings are

concerned the expenditure on subsidiary

coinage appears to me to provide the only

opportunity of effecting any considerable

economy, and I have withheld my sanction

of the proposed expenditure on this account.

When