CO129-555-2 Estimates 1936 30-8-1935 - 29-1-1937 — Page 20

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There is an element of unreality at this

date in the Hong Kong despatch of the 4th of October,

(No. 6 on this file), and many of the important

figures appearing in the despatch have lost their

significance in view of more recent occurrences.

The Hong Kong financial position is at

present affected by two major developments, (i) the

trade depression, (ii) the sterling exchange. These

are from an economic point of view to a considerable

extent related, but I think it is necessary to

distinguish them in considering the present budget

for 1936. The downward tendency of revenue latterly,

appears as follows:-

Revenue

Estimated

Revised

Actual

1934

$31,731,000 $29,670,000 $29,574,000

1935

$30,585,000 $28,328,000

1936

$26,672,000

To meet this position, expenditure has been

progressively cut:-

1934

Estimated

$33,442,000

Revised

Actual

$31,149,000

1935

$32,556,000 $28,481,000

1936

$29,598,000 (including $3,207,000

Extraordinary expendi-

ture).

We have, however, just learnt that the

deficit on the actual figures of revenue and expendi-

ture for 1935 is likely to be approximately $1,000,000.

The O.A.G. states, in paragraph 6 of his despatch,

that it has been recognised that in framing the

estimates of expenditure for 1936 it is essential that

the utmost economy should be exercised. The provision

for Public Works Recurrent has been cut down, and no

new

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new Geneal Hospital, a the new Prison, 8 the major section of