CO129-544-8 Adjustment of exchange account 1-6-1933 - 31-7-1933 — Page 11

02

to criticise it, even if we could, and to criticise it when

the accounts come under audit would be so long after the

transaction as to render criticism of little service. I

therefore submit that in the unusual circumstances holding

in Hong Kong we must accept without criticism Government

decisions of this nature as a matter of Government policy.

6 •

B•

The next point is more complicated and can be

summarised in the question "When does the loss, if any,

actually fall upon the Government funds and at what stage

should it be shown in the a ccounts?"

7.

If the purchase in these circumstandes of a

remittance, which will probably

-

as was the case in this

instance -be placed in the Joint Colonial Fund and o nly

withdrawn as required, is to be regarded as a final transact-

ion then any loss or gain must at once be debited or credited

to the "Exchange Account" which ultimately affects revenue

or expenditure, and if the latter a Vote of Council will be

required. This is clearly laid down in paragraph 2 of

X

Secretary of State's 431 of 26th November,1925, forwarded with

your 375/544 of 7th December,1925.

8.

But the view can be taken that the purchase of

such a remittance is merely transferring some portion of the

cash balance from Hong Kong to England; dollars, and dollars

only, appear in the Treasurer's accounts and such a transfer

only means an alteration in the distribution of the cash

balance.

9.

Under this view it is not until the money is

withdrawn from the Joint Colonial Fund and used by the

Crown

*47171207/25