CO129-536-1 Estimates- 1932 3-9-1931 - 16-6-1933 — Page 4

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the effect.

largely land

Le

aining chaas

Lo

over 9 million dollars surplus at the beginning

of 1932.

In these circumstances, I think they

are justified in budgeting for a deficit of over

a million dollars in 1952.

This is more than

accounted for by the estimate for Public Works

Extraordinary, which amounts to $2,173,000.

Whether the 1952 estimates are

realised

d is thought be

dependent largely on exchange movements.

I am

not sure, however, that it matters very much to

the Hong Kong Government balance which way the

exchange moves. If the dollar appreciates the

sterling expenditure of the Government is less

burdensome. If it depreciates it acts as a

stimulus to the export trade both of China in

to the munal general and of Hong Kong itself.

Rhines

H 24/1/32

}

The reason

why Hong Long is comparatively, doing so well

Auring the present depression is that it is a

trading, not a producing centre, and so long as

the volume of trade does not decline seriously

it is of less importance to Hong Kong what

prices are being received by the

producers.

original

The details of the estimates are very

adequately explained in the various memoranda

enclosed in the despatch.

I am glad to see

the increased expenditure on education, particularly

grants-in-aid. I suggested recently on a General

file that Hong Kong might well increase its

expen diture on education.

General Division may like to see the

reference to increased expenditure on the

Imperial Institute (p.24).

As regards "loan works", the Colonial

Government