CO129-561-10 Estimates 1938 2-9-1937 - 23-9-1938 — Page 26

See 9.

10.

gou.

166

Submits obsons. on 9

1.5.38.

26

At the time the Estimates for 1938 were

received, it was anticipated that the financial

year 1937 would end with a deficit of $862,000,

leaving a surplus of assets at the end of the year

of roughly $12 million. As, at that time, over

$10 million would have been advanced from surplus

funds against a further issue of the 1934 Loan and

as it was estimated that the year 1938 would show a

deficit of over $3 million, it seemed clear that the

Colonial Government's margin of available surplus

funds was very narrow, and we accordingly asked the

Governor to consider the possibility of making a

further issue of the Loan.

The Governor now reports that the Sino-

Japanese hostilities have resulted in a temporary

boom in the Colony's finances. The year 1937

yielded a surplus of over $1 million, and the

surplus of assets at the end of the year was over

$ 14 million, instead of the $12 million which had

been anticipated at the time the revised Estimate

was made. Of this sun over $10 million was

advanced against Loan Account, leaving an apparent

free surplus of $3,682,000; but the available

liquid resources amounted to approximately

$ 5 million, owing to the inclusion of sums held on

behalf of special funds which are not at present

likely to be called upon. Further, the Governor

now states that it is unlikely that there will be a

deficit for 1938.

The Colony is, therefore, not in need of

any more actual cash and if the balance of the 1934

Loan were to be raised the proceeds would have to be

re-invested, at least temporarily. In these

circumstances