CO129-568-4 Estimates 1939 8-10-1938 - 6-7-1939 — Page 10

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*$11,000,000 of which still remains to be issued.

(see 15 on /37)

(See Table II of Financial Secretary's Memorandum. Enc. to 1).

circumstances for a Colony dependent upon commerce

rather than upon the fortunes of one particular crop.

Jerhaps

The present surplus is, as the Governor submits, not

unreasonable in the present difficult circumstances

parisma. It is estimated, however, that $12,357,783

will have been advanced from surplus funds by the end

of 1938 towards the construction of Public Works

which will eventually be met by Loan funds. So far

this has been possible without reducing the Colony's

necessary minimum cash reserves, though I cannot

quite understand how. It seems clearly, however, to

be a process which cannot be continued much longer

and a further issue of the 1934* loan will then be

I would suggest that it may be difficult

for Hong Kong to borrow at low rates of interest in

the present circumstances. Moreover, with the

prospect of Japanese occupation, or at least control,

of Kuangtung continuing for some considerable time,

and in the existing disturbed circumstances in the

Far East generally it seems desirable that Hong Kong's

normal reserve of liquid assets should be increased

to a higher figure. This suggestion has, in fact,

already been put to Hong Kong and events since then

have increased the desirability of maintaining a

higher reserve.

necessary.

The financial results of the current year

appear likely to be satisfactory in spite of the

dislocation resulting from the conflict in China and

other abnormal circumstances. On the Revenue side

nearly all Heads of the Revised Estimates show an

increase over the approved Estimates. The Revised

Estimates for Customs Duties show an increase of

$1,580,000

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