CO129-561-1 Tung Wah and associated hospitals- financial problems 9-9-1937 - 2-10-1937 — Page 10

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derived from house rents and mortgage interest the return

from which has during recent years shown a serious decline.

The demands on the public from the Colony's numerous

charitable organizations have at the same time increased

to such an extent that it has become more and more difficult

to supplement funds by any general appeal.

4.

The 1937 Board of Directors on taking office

early this year found themselves faced by a serious deficit

carried forward from the previous year, this, coupled with

additional running expenses due to an increase in the number

of patients and a further serious decline in revenue has

rendered the hospitals insolvent. A preliminary investigation

conducted by the Secretary for Chinese Affairs with the

voluntary help of an officer from the Audit Department

discloses an estimated deficit for the year of approximately

$250,000.

5.

I have appointed a small Committee consisting of

the manager of one of the principal Chinese Banks in the

Colony and of two Chinese auditors one of whom is a qualified

accountant to investigate the books and to draw up a statement

showing more completely the actual financial position of the

Corporation; meanwhile some assistance is necessary in order

that the hospitals may not be forced to default, and I propose,

subject to your concurrence, and to that of the Finance

Committee which is now being sought, to provide this in the

form of a guarantee of an overdraft to the extent of $60,000,

the sum considered necessary to carry the hospitals to the

end of September when the Committee's report is expected.

6.

I put forward this proposal on the advice of the

Financial Secretary rather than a proposal for a grant from

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