CO129-558-3 Levy on Salaries- petition from Chinese Civil Servants 3-1-1936 - 19-12-1936 — Page 54

54

See Moguntir My Caine's minutes

under (7) in

53552/35

* Financial Report for 1935, para 12 (cops annexed.

para. 7.

consequent fall of the sterling value of the

Hong Kong dollar to about 1/4, which involved a very

considerable rise in the cost to Hong Kong of the

sterling remittances and salaries.

Even then it was felt that though the

position was serious, it was not really hopeless, though justifying the imposition of the salary levy

on the assumption that the above Estimates were

correct. The actual outturn of the financial year

1936 has, however, been materially different, as is

shown by the following facts:-

(i) Surplus balances at the end of 1935 amounted

x

in fact to $12,387,669, the year 1935 having, against

expectations, resulted in a small surplus of

$138,914.

x

(ii) It is reported in this despatch that the

surplus balances at the end of 1936 will probably

amount to $11,250,000 this in a despatch not

-

distinguished by optimism

-

a sum considerably in

excess of the estimate when the levy was sanctioned.

I do not find it clear from this despatch

on what grounds the Hong Kong authorities base their

contention that 1937 will result in a deficit of

£33 million; and in view of the way in which the

gloomy prognostications for 1936 have been falsified,

I