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salary of certain offices e.g. that of the Registrar General, Registrar and Deputy Registrar of the Supreme Court, and Colonial Surgeon. In those cases also where an office has been created since 1875 and yet the proposed increase does not fall short of 35 per cent., I consider that further consideration and explanation are needed. I refer to such cases as those of the Assistant Colonial Secretary, the Inspector of Schools and the Superintendent of the Sanitary Department. It does not appear on what ground such large increases have been proposed in these and some other cases; but I have no doubt that there were reasons which influenced Sir W. DES Vaux's proposal, and I leave it to your discretion, after giving full weight to my criticisms, to insert what rates of salary you may see fit for these offices in next year's Estimates.
5. In accordance with the recommendation of the Committee, the general increase in salaries should be accompanied by a withdrawal of the privilege now enjoyed by a few officers of making family remittances at the rate of 4/2d. to the dollar, and in future such remittances cannot be allowed in any case at a higher rate than that of the market. In regard also to the issue of leave pay and pension, the officers must, as I have intimated, submit, in consideration of the large increase now granted, to some curtailment of the privileges which they have hitherto enjoyed.
6. The present additions to the emoluments of public officers are sanctioned mainly in consequence of the increased cost of living in the Colony. There is not therefore the same necessity for increasing the rates of pension and leave salary to be drawn in this country, where the cost of living is actually less and not more than it was some years ago. These considerations have already received their due weight in the two other Eastern Colonies of Ceylon and the Straits Settlements, and it is obviously equitable that the principles applied in these Colonies should also be applied to Hongkong. When twenty per cent. was added in Ceylon to the salaries of certain offices, the benefit was accompanied by the condition that the recipients should in future, receive their leave salaries and pensions at 1/10 d. the Rupee instead of 2/-. Similarly the Straits Settlements rate of the Dollar was reduced from 4/3d. to 4/- in the case of all officers newly appointed or receiving sub- stantial promotion subsequent to 1876, and again within the last few months, on the occasion of the salaries of certain classes of offices being still further increased, it was decided that where the increases amounted to 10 per cent. at least, those who benefited should only be entitled to receive their pensions eventually at 3/8 the dollar instead of 4/-; but I allowed the 4/-rate to remain in force for purposes of leave salaries, as I considered that to fix leave pay at 3/8 to the dollar, would have put an undue strain on the resources of civil servants requiring to take leave on half salary, the consequence being perhaps to make it difficult for them to avail themselves of the proper amount of leave, when necessary for their health and efficiency.
7. The present opportunity should be taken to bring the two dollar-using Colonies into line in this respect. The holders therefore of those offices, to which an increase of at least 14 per cent. is now given, will in future draw their leave salaries in this Country at 4/- instead of 4/2d. the dollar, and their ultimate pen- sions at 3/8d. the dollar. I have adopted 14 per cent. because $114 at 3/8d. is rather more than $100 at 4/2d. This change will apply to those cases where increases were sanctioned in my despatch No. 67 of 18th April last, in which I dealt with the Estimates for 1890. I may remind you that the probability of this decision was intimated in the Postcript to that despatch. It will also be the rule for all new appointments to the service, and for all future promotions to any of the offices now receiving at least 14 % increase. Such officers on the other hand as now receive no increase, or an increase of less than 14 % to their present emoluments, will continue to be entitled to the 4/2d. rate of exchange for leave salaries and pensions, so long as they hold their present appointments on the same salaries,