The municipal Budget to be submitted for the approval of ratepayers at their annual general meeting next Wednesday has been drawn up with a keen eye to the realities of the situation in which the International Settlement finds itself, It provides for an ordinary income of $22,166,680 and an ordinary expenditure, inclusive of education, estimated at $24,809,620, leaving an.estimated deficit of $2,642,940. The extraordinary budget shows extraordinary income for the year placed at $14,591,300, and an extraordinary expenditure, after including the deficit of $6,613,400 brought forward from the extraordinary budget of 1937, and providing for capital outlay and emergency requirements amounting to $2,148,570 for the deficit on the ordinary budget for 1938 of $2,642,940 and for loan Redemption Sinking Fund and Pension Fund allocations totalling $3,002,560 amounting to $14,497,370, from which it will be seen that the Council anticipates a surplus to be carried forward to the following year of $93,930. Thus while the ordinary income and expenditure for the financial year will be greater than last, the extraordinary expenditure will have been reduced by some $10,000,000 while income will be approximately $3,000,000 less. It is a far cry from those days when the ratepayers of Shanghai solely debated the passing of a budget of less than half a lakh-of taels, and, in comparison, the figures of nowadays present almost astronomical proportions. But then so does a comparison of the size of the International Settlement, its population and the enormous energy it now displays. Nevertheless it is an astonishing fact that this great city during the coming twelve months will be administered for no greater a sum than £1,200,000 approximately. It speaks well for those in control of the municipal purse strings that they contemplate being able to manage on so comparatively small a sum, and if the expectations which have dictated the formulation of the present budget are fulfilled the city's finances should be in a healthy state at the end of the year. That, it is to be hoped, will eventuate, though it would be folly to assume that there is now no more danger of untoward developments which might have an adverse effect upon the situation.
A review of the decreases which have been made in this Budget show that some very drastic cutting has been indulged in. There is much to be said for the doctrine of cutting one's coat to suit one's cloth, but the dimensions of the reductions which have been made, in some cases, convey the unhappy impression that, perhaps, it has been done too drastically. Thus with regard to the police force, the appropriation under the heading of Foreign Pa and Allowances is no less than $325,000 below the figure of last year; a decrease of $1,061,- 930 in the appropriation for the Public Works Department, and a decrease for the Health Department of almost a lakh. There hav it is true been some increases in other d partments, but the net result is that ordinary expenditure has been reduced by approximately fourteen lakhs. With regard to the Police so substantial a slash must of necessity be regarded with some misgiving. Shortly after pay cuts had been introduced last year the Police Force responded to calls arising out of the outbreak of hostilities in a manner which earned the admiration of the whole community. It was irenic that the men should have had their pay reduced just prior to a period of hard work and much personal danger, and there can be little doubt about it that if it were possible to restore their salaries to the former level such a proposition would. receive much enthusiastic support.
The Police, the public health and the public works are services essential to the well-being of any large community such as Shanghai, and practically the whole of the net reduction in expenditure is covered by the reductions effected in connection with those departments. Increases and decreases with regard to the cther departments practically balance out, and the impression is unavoidable that the essential services may have been called upon to.make sacrifices which may prove to be too great when all the circumstances come to be considered. It is hoped that this will not be the case, and that as times return to normal the customary provisions will again be made for these departments.
So long that this Budget is accepted as an expedient necessitated by all that has happened during the last eight months, it is wholly acceptable, but if it is desired to establish it as a precedent for the future it most certainly is not. This journal, while thoroughly sympathizing with the reasons for reorganization of the Public Works Department, for example and readily accepting the assurance of the Commissioner that it will not impair the standard of any essential service, cannot but regret that it has been found necessary to reduce the staff in the way it fol has. Prudence has undoubtedly dictated Such a course, but there is such a thing as being too cautious. The real test of any reorganization within the municipal service is not whether it is capable of performing its functions under present conditions, but whether it is being maintained in such a state as to be easily capable of meeting the demands which will be made upon it when Shanghai is permitted to set about its own rehabilitation. That is the main consideration which has to be borne in mind. If the municipal service is reduced to such an extent that when that time comes it is inadequate to handle the situation, if the return to normality is thereby delayed, then present prudence may be completely negative. It is not suggested that the framers of the Budget did not have this in mind, It is, however, necessary for the ratepayers themselves to realize that there is a minimum below which the service should not be reduced. That, it believed, is being approached now, and it is eminently desirable that any plans for further retrenchment should be scrutinized with the greatest c That is no criticism of the present proposals; as has already been remarked the Budget has been framed with a full view of the realities, and as such must be welcomed. Shanghai has, however, to be concerned with future possibilities and it would be unwise if too great a caution now stultified its development in the future. That may be believed to be by some a counsel of hope. That is what is intended, for this journal has consistently contended that the future of this port cannot be denied it, and that coming growth will need an efficient machine to care for i Expert Reassurance Coming from an expert of the standing of Mr. E. Kann the letter appearing in today's correspondence columns on the subject of currencies is of singular importance and interest. The presentation of the case which he puts forward amply supports the view taken of the matter by this journal which refused to regard the developments arising out of Chinese exchange control with any degree of pessimism, "Mr. Kann makes it perfectly clear that the exchange which is being liberated by the Chinese Government is ample to meet the demands of trade as it is to be found in China today, and it would have been absurd to have expected the Chinese Government to have done anything towards making the flight of capital easier by providing all the exchange that the market could absorb. It is just as well, too, that Mr. Kann should set at rest rumours to the effect that the banks were making stupendous profits in exchange. The facts prove this not to ye the case, and that they have been just as much victims of circumstances as have their clients.
There are few cities in the world in which rumour breeds and spreads so rapidly as in Shanghai. "The Bunder" Shanghai has had always with it, but in precarious times as these the local confection gains extra currency. Fortunately the excitement of fortnight or so ago is subsiding.and Shanghai is beginning-to see things in their proper perspective, and the mild panic of a few days ago i" being followed, as Mr. Kann so well puts it calm. The Chinese Governme providing proof of its willingness and ability to maintain the value of the national dollar to the tune of approximately £2,000,000 a month and if greater proof than that were needed, it is difficult io know where it could be found A Foolish Canard There is very little over which to laugh in this tragedy which has befallen China, but every now and again it is impossible not to smile. It has been remarked time and again tat the Japanese are poor propagandists, but even they have outdone themselves with the story from Peiping alleging that British missionaries have been exploiting Chinese -refugees and making "unreasonable profits" from fees charged them for board and rent, The report carried by Domei states that when the Chinese troops withdrew from Linfen the church "inspired the Chinese populace in the city with fear of the Japanese forces wud established a refugee camp on the church premises. Three hundred destitute Chinese men, women and children entered the camp to live." When the Japanese arrived they also set up a camp, to which it is stated 150 Chinese who up to that time had been in the church camp immediately transferred. The story goes on to say that the Missionaries had been charging the refugees 30 cents per capita for rent and 25 cents a month for board. Domei goes on to say that the only church at Linfen is the China Inlard Mission. That body is quite capable of taking care of itself in the face of such a ridiculous charge as this. It appears to be accused of extracting the whole of fifty-five cents from the refugees each month, and out of that sum making unreasonable profits. If it is pos: sible to care for and feed a refugee for a little under two cents a day and still make a profit out of it, there is no doubt that Father Jacqui not and the committee working with him would dearly like to know how it is done, The report is obviously nonsense, and it is to be doubted whether the China Inland Mission will even take the trouble to reply to such puerili; y. Nevertheless it has been stated that the cost of maintaining a refugee for a month is approximately $3. It may, of course, be a little less in the north, so that if the mission has been receiving 55 cents a month from each of the people they have been caring for, instead of the unreasonable profits alleged, they with undoubtedly be out of pocket over the whole matter.
Text read from the printed page and cleaned; old type leaves the occasional error.