CO129-541-2 Estimates 1931 14-10-1932 - 19-7-1934 — Page 4

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* I put up herewith a copy of the Circular 57 16.7.32 which laid down

that budgets mush, if possible, be balanced

placed by an anticipated surplus of nearly $500,000

in the revised estimate.

In budgetting for a deficit of $1,116,672 for 1933 (including $500,000 for the Naval Arsenal,

as almeady approved

x

to be taken from surplus balances) consideration has been given to the fact that it is not usually possible to spend upon Public Works all the money that es is

bees voted for that purpose. It is not, in fact, expected that at the end of 1933 there will be any deficit, apart from that represented by the $500,000

which is to be drawn from surplus balances to pay the

final instalment due on the taking over of the Naval

Arsenal Yard and Kellet Island from the Admiralty.

This will be the final payment to the Admiralty, and may yet be subject to some adjustment in connection with the aerial ropeway, correspondence about which is still proceeding with the War Office (on 92608/32.

The whole cost of taking over the Naval Arsenal Yard, amounting to $2,500,000, is expected to be recovered by the eventual sale of the land taken.

over, and it is for this reason that all the expendi-

ture has been or will be charged to surplus balances.

I think that Hong Kong is justified in

budgetting for the small deficit indicated above,

especially in view of the fact that past experience

tends to show that it may become a surplus. It must

be borne in mind, however, that recent statistics

have shown a considerable decline in trade which may

be reflected in future revenue returns.

It has recently been suggested to Hong

Kong (on 92701/32) that further consideration should

be given to the question of reducing light dues,

which were increased when the rate of exchange fell.

These dues are estimated to yield $640,000 on the

present