CO129-623-8 Estimates of Expenditure- includes a report for the year ending March 1951 1-12-1949 - 31-3-1951 — Page 42

SAVINGRAM

To the Secretary of State for the Colonies.

From the Governor, Hong Kong.

Date..........

No.

42

3.

-

indeed a deficit is in fact avoided.

5. Owing to the very considerable difficulties involved, there has been much delay in the preparation of the accounts of the department which has been dealing with Government trading activities in respect of essential commodities. Accounts for the period beginning with the re-occupation of the Colony up until the 31st of March, 1950, have recently been received from the Accountants, and a summary of Government 's observations is now being prepared for reference to you with the se accounts. The accounts disclose a substantial surplus, and I am considering proposals for reference to you, involving the application of this surplus towards the setting up of a Development Fund.

6. It is of interest to note that at the present time, upwards of $70,000,000 of Government's surplus. balances is invested in stocks of essential commodities, and this figure is likely to rise as security measures to increase stocks are implemented. In connection with the proposals for the allocation of the trading surplus earned so far, I shall be suggesting that a proportion should be earmarked against the possibility that in holding, for strategic reasons, over-large commodity stocks, losses may be incurred eventually in liquidating these stocks. It will therefore, in my view, be desirable to establish a Contingencies or Equalisation Fund.

CGFFM/V

Eni.

HYR & PARISH 11 DEC 199

REGISTR

A