CO129-576-10 Estimates 1940 6-10-1939 - 22-10-1940 — Page 17

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expenditure resolution seems to be unexceptionable.

? It would be useful to have the duplicate

of enclosure 3 filed on the Loan file (53593/39)

with a copy of our reply, as it is awkward having to deal with Ests.file when subsequent Loan resolutions come

in.

? S.S.D. should in due course see the Prisons and Labor Office proposals in these Estimates, Dr. O'Brien the Medical ones and Mr. Cox the

Educational ones.

NISAndrews

1.1.40

These estimates cover a fifteen month

period from 1st January, 1940 to 31st March, 1941.

They were prepared in the Autumn before the

outbreak of war and were reviewed in October when

the Governor intended to recast them in the form

of a double budget (a) dealing with revenue and

expenditure of a normal character (b) a supplementary

war budget which would include all expenditure of

a defence character together with a substantial

contribution to H.M.G. for war expenses, for all

of which revenue would be provided by emergency

taxation and in particular, income tax. Local

unofficial opinion has, however, shown itself so

strongly against the suitability of a tax on

incomes in the circumstances of Hong Kong, that the

Governor's project had to be dropped and the

original Estimates have now been passed after

relatively minor adjustments, the effect of which

has been to increase the deficit in the budget

from