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when new money will actually be required.
It is for these
reasons that I advocate an Ordinance empowering Government
to raise up to $25,000,000 at varying rates of interest from
time to time.
b.
My proposal to finance these loan works is, there-
fore, to carry on as at present after converting the present
Public Works Loan of 1927 of 6% to 5% or less. I do not
advocate the raising of any fresh money this year because
it will not be required or next year because it would be uneconomical to place $5,000,000nwhen the greater part is
not required and I cannot recommend that so small an amount
as, say, one or two million be issued as a Government loan.
Should it be required, an overdraft at the Bank can easily be obtained at a reasonable rate of interest reckoned only
on the daily balance. This to my mind is the most economical plan the Government can employ and will save interest.
า.
Government is at present setting aside $300,000 in interest and $333,000 in Sinking Fund on account of the
Public Works Loan. In future with a 5% loan the interest would be reduced to $250,000 p.a. and the obligation of placing $333,000 p.a. towards a sinking fund would cease.
I suggest, however, that although there would be no statutory obligation to set aside monies, yet in anticipation of
borrowings a sum should each year be voted towards this further/repayment and placed on deposit with the Bank, $250,000 p.a. would suffice. In two years this would only amount to $500,000 and before that time the overdraft at the Bank
would be greater. The Manager of the Hong Kong and Shanghai Banking Corporation informs me that he will set off deposits against overdraft charging interest only on the excess. When the overdraft has reached some three to four million a
further loan for five million should be issued.
To my
mind
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