Rehabilitation Loan expenditure in excess of $50 million which has so far been met tempor- arily from the general revenue balance were charged against this balance, the uncommitted portion of the balance would remain at, or even increase slightly beyond the estimated figure for 31st March, 1950 of about 50 million. This is roughly equivalent to the six monthe' revenue which I indicated in my telegram No. 326 as the minimum reserve which seems to be desirable. I note from your savingram No. 853 that I may expect a despatch shortly on the question of charging loen expenditure against general revenue balances.
3. In view of your estimated necessary development expenditure of $400 million, I appreciate that it will probably be necessary for Hong Kong to be able to raise a great part of that sum in the form of a loan; and I will address a further communication to you as soon as possible on this question.
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