CO129-555-2 Estimates 1936 30-8-1935 - 29-1-1937 — Page 81

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expenditure of $29,598,148, and a deficit of $830,514, i.e.

surplus balances will be reduced by that amount below

$10 million by the end of 1936.

7.

s.d.

This situation has been made clear to you in Sir W. T. Southorn's telegram No.211 of 30th August

which drew attention to the fact that the estimates for

1936 have as stated above been framed on a 1/8d. dollar,

but that it is impossible to predict what the rate will

actually be next year. The average rate for the first nine months of the current year was slightly over 2/. and if it remains at this level throughout 1936 the deficit

of $830,000 will be turned into a surplus. If Revenue

and Expenditure are otherwise as estimated the critical

exchange point below which the Budget will not balance is

about 1/10 d., which gives a margin of nearly 2d. on the

present exchange rate. Should exchange drop below this

point it is proposed first of all to appropriate the sum

of half a million dollars from the profits on the Trade

Loan, the transference of which to general revenue you have

2 authorised in your telegram No.142 of 2nd September. Should

there be a further fall in exchange it will be necessary

to consider the imposition of a levy on salaries and of

additional taxation. Meanwhile a scheme for a levy on

salaries (which would be submitted to you for prior approval)

and methods of raising more revenue by additional taxation

are being considered.

8.

Taking a longer view there are two more hopeful

features, of which the first is that most of the major works

of Public Works Extraordinary at present in hand will have

been completed by 1936 and all by 1937, so that the

expenditure on Public Works Extraordinary in subsequent years

can be very materially reduced should the financial position

of the Colony necessitate such a course. The second point