CO129-539-12 Loans for public works- military finances 26-2-1932 - 7-3-1933 — Page 100

- 2 -

Brought forward

$11,850,000

If, however, an extended programme of

Public Works is embarked on during 1932 the surplus will be reduced by the amount spent, For this I am allowing

500,000

Giving a net surplus as at 31.12.32 of $11,350,000.

2.

X

Includes $1,000,000 on account of the Naval

Arsenal, payment of which from surplus balances

has been approved - vide Colonial Office despatch No. 145 of 4th December, 1931.

It

This means that the cash balances of the Colony will not be reduced during the year. As the balance held

locally on the 1st January, 1932, on current account and deposit amounted to $3,670,440 and as a further sum of £159,000 stood to the credit of the Joint Colonial Fund in London the liquid resources of the Colony should be able to withstand the advance of $1,500,000 for Loan Works. speaks well for the strength of Hong Kong's finances that up to 31st December, 1931, no less a sum than $3,483,000 had been advanced without borrowing and that the cash balance at that date was as great as it was. I am, therefore, of the opinion that provided nothing abnormal occurs, the Colony, can quite easily advance a further $1,500,000 without resorting to borrowing during 1932. The Public Works Loan 1927 of $5,000,000 should, however, be converted bearing a lower rate of interest than 6%. This can be done locally

next October, and I would suggest that an Ordinance be passed authorising the Government to borrow up to $25,000,000 during the next 10 years in varying sums as and when required. Such an Ordinance would be comprehensive including $5,000,000 for the Public Works Loan and $20,000,000 for the various loan works financed in the first place from surplus balances. The first issue would be for $5,000,000 and would be in the

nature

96

Page 100Page 101