CO129-463 - Governor Sir Stubbs - 1920 [10-12] — Page 37

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Fund would be subject to the Military Contribution of 20%. Apart from these considerations of exchange,

4.

I venture to suggest that there are other objections to the proposed system. I realise that, when money has been invested with the intention that a certain sum shall be available at some fixed date in the future, or at any date when it is required, provision for depreciation is in the first instance essential, and in the second, advantageous: but I submit that this is not the case with regard to the ordinary investments of surplus funds. These investments are made not with any view of providing a reserve fund but merely because the Colony has money for which it has no immediate need and which therefore in normal times it is advantageous to invest in interest-bearing securities. (I say "in normal times" because, as things are, it is certain that we should have done better to keep our money in deposit account here or even to have locked it up in the Treasury vaults). These securities will be parted with from time to time when more money is needed than the revenue for the year provides to the extent of such need; and the actual

amount at which the investments stand in the meantime is immaterial. In the case of this Colony I anticipate that for the next few years it will almost certainly be necessary to draw on the accumulated balances of the past to meet the annual expenditure. We have many large projects on hand, much valuable work which has had to be postponed during the war must now be taken up and the ordinary expenses of administration are increasing considerably, while it will take some time to make up from other sources the loss of revenue resulting from diminished sales of opium. In these circumstances it would not be sound policy to devote any

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part of the revenue to the purchase of additional securities,

which would almost certainly have to be realised at a loss.

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