CO129-576-10 Estimates 1940 6-10-1939 - 22-10-1940 — Page 18

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from $346,000 to $440,000 and the Government have

at the same time given an assurance that if the

revenue position seriously deteriorates, certain

Public Works Extraordinary and other special

expenditure can be deferred. The provision for

special and Public Works Extraordinary expenditure

in the budget reaches the total of nearly 5 million

dollars.

The financial result of 1939 was expected

to show a small surplus and, as revenue has been

well maintained up to the end of the year, a surplus

could ordinarily have been relied on, but on a small

margin the extra defence outlay may have interfered

with the balance.

It was estimated that at the end of 1939,

surplus assets would amount to a total of 13 million

dollars, the whole of which would have then been

advanced against loan account. In the year 1940-41

it is proposed to advance a further sum of

approximately 1 million dollars from surplus funds

for expenditure on loan works. In this situation

the Governor early in December consulted the

Secretary of State by telegraph as to the possibility

of raising the unissued balance (approximately

11 million dollars) of the 1934 dollar loan, in order

to restore a degree of liquidity to surplus balances.

It seems likely as a result of consultation with the

Treasury that there will be no objection to the

balance of this loan being raised in Hong Kong and

there is no cause for apprehension that local money

would not be available there for the purpose.

At

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the Governor's suggestion, we are discussing the

matter with Mr. Caine in the light of the views which

have been extracted from the Treasury. The upshot

is that there is no real cause for anxiety over a

situation