GOVERNOR'S ADDRESS TO THE LEGISLATIVE COUNCIL
HONOURABLE MEMBERS,
OCTOBER, 1939.
It had been my intention to present a short address to you on this occasion more or less on the lines of that which last year endeavoured to review the salient facts of the preceding twelve months and the more important schemes under Government's consideration. I regret very much that the rush of work caused by Herr Hitler's intromissions has prevented that intention from being fulfilled, and all the more because there has been good progress in many administrative activities and social services which is deserving of record.
I propose, accordingly, to confine my remarks on this occasion to the financial policy and intentions of the Government and I conceive that these will be more rightly appreciated if I first invite attention to the declared policy of His Majesty's Government in this regard. If one were to compare the manner in which this war is being faced by the Government of Great Britain with that of 1914 a fundamental difference would at once be observed. Then, armies, administrative departments and war organizations and requirements of all kinds had to be hastily improvised and the national finances were left to be carried on along normal peace lines; today the situa- tion at home presents entirely the contrary picture. The likelihood of the outbreak of a major war between Great Britain and Germany had long been foreseen, plans had been laid to meet the emergency and the appropriate economic policy had been thought out and made ready.
It will be generally agreed, I think, that the outstanding feature of the economic plans of His Majesty's Government, as disclosed in the speech of the Chancellor of the Exchequer on September 27th when he introduced his first war emergency budget, was his insistence upon the importance of paying for the war from revenue as far as that was possible. The inevitability of having also to raise war-loans was clearly recognized but the immediate step taken was the imposition of heavy additional taxation: at the same time he urged most strongly that it was the duty of the private citizen and of the public institution to avoid all unnecessary expenditure in order that savings might accrue for subsequent investment in war loan. It is an inspiring fact that the British taxpayer has readily, not to say cheer- fully, accepted the unprecedented burdens laid upon him.
So much for the way in which the taxpayer at home is facing his duty what of the duty which lies before us in this small unit of the British Empire? I hope and believe that there will be universal acceptance here of the fundamental principle that our responsibilities in Hong Kong towards Great Britain are in no way less than those of British subjects resident in the United Kingdom · and that just as they are prepared to hear whatever burden the successful conduct of the war may impose upon them, so we also must leave nothing undone that we can do towards that end. In other words, this is every whit as much our war as it is Britain's.
It is in accordance with that principle that the financial proposals that will be placed before you at this session have been framed and I take this early oppor- tunity of saying that they are not to be looked upon as the maximum demand that may be made on the local taxpayer before victory crowns our arms: They are, however, all that we can wisely do at the moment. With this object in view it is Government's intention to replace the budget which is formally before you today by two separate budgets: the former will provide for the normal expenditure of Govern- ment departments, the latter is designed to fulfil our obligations as a member of the British Empire while engaged in a major war.
It may surprise you that what I will describe as the ordinary budget does not show greater reductions in expenditure. The estimates, of course, were fairly well advanced when war broke out and early in September we were in the act of con- sidering the extent to which they should be cut down when I received from the Secretary of State some very valuable guidance.
some very valuable guidance. In effect Mr. MacDonald's
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