Shanghai, Jan. 9. ATEPAYERS are entitled to know the reasons which have led the Shanghai Municipal Council to recommend a 40 per cent. surcharge on General Municipal Rate, Special Rate, and Land Tax and an increase in Licence Fees. The departmental estimates for 1941 have not yet been submitted to the appropriate Council Committees, but the financial needs of the year are already clear. the first place it should be re-alisod that, without.a risk to public safety and health which cannot be: taken, no further substantial economy can be looked for either reorganization or restriction of municipal activities or reduction of staff, states an SMC. communique issued "An independent Econo- been st Iny. Committee has been sitting throughout the present municipal year, and ratepayers are invited to study Its reports which have all been publistied in the public press and the "Municipal Gazette." Whether muntcipal expenditure rises or "falls in future will depend upon the general level of prices and exchange which, of course, directly affects the amount of the high cost of living allowances paid 1o: the municipal staff.
Frustration of Hopes When the budget for 1940 was being prepared, it. was apparent that expenditure was on an appreciably higher level than income, 'Taxes had accordingly to be raised, but the increase, which took the form of a '50 per cent. surcharge, did not come into effect until the second half of the, year, It was anticipated that, during' the second half-year revenue Would more or less balance expendi-lure, and there seemed a reasonable eet of the Council achieving a need budget in 1941. During the year, however, exchange depreciate the local price level has risen. and there has been a heavy increas In. the cost of living, As a ordinary expenditure for 1940 Is pected to be some $7,800,000 in excess of the total figure in the budget. On the other hand, ordinary income is approximately $4,000,000 greater than the amount antiefpated, so that the final deficit for 10 will be roughly $8,775,000, fas compared with the budget Agure of "$5,573,200, The communique strossea that these are estimated figures but it is Improbable that the Anal deflect for the year will be materially different from the gures quoted, Tt hag been stated that it was at one time hoped that during the soc~ and half of 1940 revenue would more or. less balance expenditure, October, however, the high cost of Aiving. allowance for the staff had been twice raised from the 40 per cent, level obtaining at the begin hing of the year and the rice allowance granted to the Chinese staff not serving under Letter of Appointment had. shown a steady increase; in April was $8.92; In October it was $10.73. Phere hind been substantial increases in the cost of all commodities ai services, and although revenue was coming in well, it had not risen the same proportion as had expendi tire, and during October and Novem-Ber the Counelt was working on a That this-defeat was not larger was duc to the fact that the high cos of living allowances granted to the staff wore still inadequate, 'As ratepayers are aware, the Council was compelled to re-agnize this position, "There was dis. content throughout' the Municipal Service, the number of foreign employed who had already lett the service In 1940, or whose resignations had been received, approximated 170, There was serious discontent among the Chinese members of the Police Force as regards their remuneration, particularly that of the lower paid men, The Council, as a result, gave consideration to the remuneration of the enure staff, both foreign and Chinese, and awarded increased Jowanees which, with rice at its pres~ tent price, will.cost approximately one million dollars a month. has perhaps not been sufficiently emphasized that the great majority of these Increased allowances benefit the lower pald staff, the communique continues, "Of the sum of one million @ollars' a month Just mentioned, $49,000 a month goes to Class foreign employees, $297,000 a month Class "B" and Class "L" employees, land 114,000 a: month to fiat of serving under letter of apointment. Whereas a coolie received December an increase of 2 per cent, over his November pay, offials of the top of the service (Heads bf Depertments) received in Decem-Ser an increase of approximately 7 per cent, It income and expenditure continaat present, there would be a deficit for 1941 of approximately 20) million dollars. Of this deficit, 12 million dollars is accounted for by, the Increased allowances just referred to, Even before these allowances were granted, the Council was, as has ted, working on a defeat. It /may be estimated that this deft re-Presented an annual sum of approximately two million dollars, a year. Restoration. of long leave on a modi-fled basis for the foreign staff represents an outlay of some three million dollars a year for which no provision was made in the 1940 bud-_ get, In 1041, a full year's allowance must be'made for interest and. redemption payments on the " 1940 Loan; this involves an outlay of one mall lion dollars more than the swin provided in the 1940 Budget.
Finally there is the question of exchange. The 190 budget was based, 'a3 regards sterling commitments, on a 44. dollar, and the Council was able to secure a slightly higher rate for most of its foreign currency commitments. The lower rate prevailing today make it necessary to allow not Local Britons to Buy Own Fighter Squadron Shanghai, Jan. 13, A message has been received by the British Embassy from the Foreign Office asking there is any likelihood of the Voluntary War Contribution Fund reaching £100,000 and saying that for that figure it will be possible to purchase a squadron of fighter "planes to be identified with the donors in China. A reply has been sent to the effect that it is hoped the Fund will reach £100,000 in the near future and suggesting that the name of the squadron should be British China Squadron and that the type of "plane to be purchased should be left to the decision of the Ministry of Air, loss than two million dollars for the higher cost of unavoidable foreign currency obligations, The anticipated. deficit of 20 million dollars for 1941 4s thus arrived at,
Text read from the printed page and cleaned; old type leaves the occasional error.