CO129-443 - Governor Sir May - 1917 [7-9] — Page 37

Apart from this serious difficulty with which the Company is confronted, it has to face a heavy loss monthly, owing to the wide disparity between the running expenses which have to be borne by the Company, and the rate of 10/-

per gross ton allowed by the Government for the use of the

vessels. The enclosed statement of account will give a

clear conception of our present financial position.

While the Government allowance is in sterling, we have to pay in Hongkong Currency the wages of the native

crew, the premium on marine insurance on the hull,

repairs and all other expenses. The officers and

Engineers are paid in sterling, but they are so paid at

an agreed rate of exchange: half the salary at 1/9, and half at 2/- to the dollar (the present rate of exchange being 2/6 per dollar). These factors, together with the

advancing cost of stores, are steadily increasing our loss

as time goes on.

It will be seen that an item for interest on our

capital is included in the statement, because a great

part of the capital still remains unliquidated as

mentioned in my letter of the 16th March to the Governor;

and the interest has consequently to come out of the

Company's only source of income the Government allowance.

However, even were this item eliminated from the statement,

there would still be a deficit of about $7,400 per mensen,

which is likely to increase from month to month, and

which the Company has absolutely no means of meeting.

It should also be noted that we have not taken into

account in the statement the depreciation of these three

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