CO129-534-6 Loans for public works 24-2-1931 - 11-8-1932 — Page 4

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Totiller

7.5.31

This despatch and enclosure paint a

picture of the financial position of Hong Kong

which appears to me utterly unreal. When they

prepared their estimates on the basis of the

dollar equals 1/4a they anticipated a deficit of

$2,299,096 and I pointed out that the Revenue

estimates appeared to be optimistic. The fall

in the dollar to 1/- increased the estirated

deficit to $4,000,000. On 12th January the

Governor telegraphed :-

"The further heavy fall in the dollar to

una er 1/- renders the financial prospect very

serious, and there will be a very heavy deficit

on the year unless there is a considerable rise in silver! (No. 18 on 72821).

The position was so serious that a cut in

officers' salaries to effect a saving of one and

a half million dollars was sanctioned, although

aumittedly, it might be challenged as a breach of

faith. It now appears (see page 9 of enclosure)

that that is practically the only saving that has

been effected, although the excisión

off

or

86 outstanding

or fost fonement

certain unspecified works, may effect a further

reduction of $1,000,000. The Retrenchment

Committee has not yet accomplished anything.

I hear unofficially that its Report on the Public

future Works Department is practically completed,

but we do not know whether any substantial

economies have been suggested, Additional

taxation has been imposed which is estimated to

bring in $1,594,000 (Page 10 of enclosure)

leaving