CO129-597-2 Estimates 1949 1-3-1948 - 14-7-1949 — Page 10

10

The minutes immediately above have been

circulated on a temporary file and I delayed action on them until the Secretary of State had considered the earlier minutes with particular reference to the question of a State lottery - see now his minute of the 5th in which he expresses full agreement with my views in the minute of the 30th June.

I see two difficulties about the line proposed in the draft telegram. First is the merely tactical difficulty ir, on the State lottery point, we are going to take the line that the need for extra revenue is not so urgent as to justify resort to desperate expedients, it may be a little awkward to press the Governor quite so strongly on the revenue aspect. Secondly, and much more fundamental, I do doubt the whole basis of the draft telegram. For the reasons explained in my earlier minute, I think that the likelihood is that there will be another surplus of revenue this year, but if I am wrong and the local expectations are more accurate, the line of argument underlying the draft telegram still seems to me to be

In effect that argument is that Hong Kong is very prosperous and ought to be getting more revenue than is budgeted for in 1948-49. The true position of the estimates is however that they have estimated, as I think erroneously, that the Colony is not going to be so prosperous this year as last. If, in fact, trade and prosperity are maintained, there is no doubt whatever that actual revenue will be substantially higher than the estimates and the objective which we and the Treasury áre urging on them, that is a revenue surplus, would, in fact, be obtained. In other words, if the assumption of prosperity is correct, the financial policy being pursued would produce a surplus even though the estimates do not show it. If, on the other hand, the estimates prove to be correct, it will only be because the prosperity has vanished.

I should, therefore, prefer a different approach as in the re-drafted telegram. I have rscussed this will th. Pitblado, I who agues to it.

7. Timberlan has no comment, perhaps he will "at once" it.

Y

Reiniken for Junker discusion of the

Nu metus

иптиз

usin du Follows

6. 7. 48.

I do nd dissent. Than wwn liked the state lottery

idea.

Ins

Reevic in Rad. H. aflistet has

'

Issued.

lef Tel to Hong Koma 751

15 Bancroft, Treasury

ملة وو

7-7-~8

NAG

a

HK Estimatér 1948-9

306-48

Page 10Page 11