CO129-489 - Governor Sir Stubbs & Sir Clementi - 1925 [8-12] — Page 385

19.

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the community have been hard hit by the troubles of the

past four months and if there is any considerable number

of persons who have more money than is required for their

immediate needs it will, I think, be more in the interests

of the community that they should employ it in facilitating the resumption of trade by financing commercial operations.

The more loose monoy there is available in the Colony the easier and quicker will be the return to normal trade

conditions and I submit that the Government will within

a measurable period of time gain more by the normal income which it will derive from a rapid return to prosperity

and increased business than by the more direct process of

additional taxation. Therefore so long as we can pay our way by the exercise of a wise economy I advise that the existing basis of taxation should not bo disturbed.

There romains the question of whether it would

be wise to raise money by loan.

For the prosont I advise against any attempt to

do so.

Owing to the shortness of money, which I have already quoted as a reason against additional taxation, a loan floated locally would not be likely to meet with success and the prosent is not a favourable time at which to appeal to the London Market. It is apparent from

communications received from England that the general

public is under the impression that conditions here are much worse than they really are and the small investor, who is the person to whom the loans of Crown Colonics scen to appoal most, would certainly hesitate to risk his money in a Hongkong loan unless the torms offered wore much moro

gonorous than is really necessary.

It would, I think, bo far wiser to wait until conditions approach the normal and not to endeavour to