After examining exhaustively every aspect of the Council's accounts and commitments, the sub-committee came to the unanimous conclusion that the Council must at the earliest possible moment produce a balanced budget and attain a position in which income balances expenditure. In their opinion, no financial assistance in the form of a loan can be expected from any source unless potential lenders are assured that there is every reasonable probability that the Coun-will produce a balanced budget and is effecting every practicable economy.
The Council's reserves, which have been drawn on for a number of years Dást in order to balance the budget, are now exhausted and cash requisite to enable the administration to be carried on can only be obtained by increased taxation or loans, If income was to balance expenditure for 1940 at the present rate of exchange it would be necessary to impose, as from July 1940, a 100 per cent. surcharge on general municipal rate, special rate and land tax. Such a course would have to be taken unless a loan was forthcoming. The sub-committee unanimously recommended to the Finance Committee, and the Finance Committee after full discussion adopted their recommendation, that the minimum that must be asked for from the ratepayers is a surcharge as from July 1, 1940, of 50 per cent. on general municipal rate, special rate and land tax, and in addition the rais. ing of the surcharge on licence fees, etc,, from 10 per cent. to 50 per cent.
During the course of the discussion in the Finance Committee, it was suggested that the imposition of a surcharge of 50 per cent. on existing rates might prove burdensome to persons in humble circumstances, In reply it was pointed out, while stressing the imperative necessity of the proposed surcharge which was regretted by everybody, that owing to the recent improvement in business conditions the public are in a better position than a year ago to bear increased civic burdens. The majority of employers have increased salaries and issued high cost of living or rice allowances. Inflation has come to Shanghai, and, although there is always a time lag, a balancing point must be reached.
Text read from the printed page and cleaned; old type leaves the occasional error.