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He also recommended that until additional married quarters for 3 more Warders could be built, house allowances of $600 per annum should, if necessary, be granted to 3 Warders on condition that they resided within 5 minutes walk of the Gaol.

He subsequently recommended the addition of a Principal Warder to the Staff.

Mr. Harcourt approved these recommendations.

8.--Sanitary Inspectors.

The Governor did not consider an increase of salary necessary in the case of these officers to whom the free passage scheme has been recently applied, If his proposals with regard to the rates of exchange for payment of sterling salaries were sanctioned, but he considered that to place them on an equal footing with Inspectors of Police and Overseers in the Public Works Department they should be provided with free quarters.

9.—The Land Bailiff, New Territories.

Mr. Last, Land Bailiff, who had 9 years service on a salary of $1,500 with exchange compensation and free quarters had been recommended by the District Officer, Taipo, for an increase of £25 per annum. The Governor recommended this increase provided Mr. Last accepted a sterling salary of £250 per annum. The maximum salary of Land Bailiffs, Public Works Department, was £250 per annum and as these Officers were to be provided with free quarters the recommendation would place all Land Bailiffs on an equal footing.

10. Assistant Engineer and Station Officer, Fire Brigade.

The salary of this officer is £216-£240 with free married quarters, fuel and light and the privilege of the Free Passage Scheme. The Governor considered these emoluments sufficient and did not make any recommendation for increase of salary in view of the proposal to alter the rate of exchange for payment of the salary.

11.-Third Interpreter, Supreme Court.

Mr. A. J. Mackie's salary was £180-£225 by £15" which compared unfavourably with that of the Chinese Higher Grade Interpreter whose maximum $2,700 at 2s. equaled £270. The Governor therefore considered that the scale should be altered to £240-£270 by £10, and that Mr. Mackie might be allowed to draw £250 from 1st January, 1913.

Mr. Harcourt in his reply dated 8th February, 1913, approved the Governor's proposals with regard to Overseers, Wardmasters, Sanitary Inspectors and Laud Bailiff and agreed that Mr. Mackie should be given the increased salary recommended.

13.-European Police.

In a despatch under date 22nd November, 1912, (No. 3), the Governor dealt with the application of the European Members of the Police Force, whose salaries were fixed in sterling.

A careful calculation showed that in the case of European officers provided with free quarters the increase in cost of living since 1902 was 16%. In the case of the European Police it was somewhat less owing to the privilege they enjoyed of free passages. The rates of salary of the various ranks compared favourably with the rates of the corresponding ranks in the London, Edinburgh, Glasgow and Dublin Police Forces. The European Police in Hongkong had extraordinary opportunities of earning allowances in addition to their salary: in the month of September, 1912, out of an establishment of 153 Europeans there were only 39, of whom 13 were Water Police, who did not enjoy extra allowances. This system had in course of years grown to proportions which militated against efficiency owing to a natural tendency to appoint senior officers to comparatively unimportant posts which happened to be more lucrative by reason of the allowances attaching to them. A first step in reducing these allowances had been taken by an amendment to the conditions of service to the effect that Police in certain rural districts were required to perform, in addition to their own duties, duties for Sanitary Department, Harbour Master's Department and Land Office. The present offered a favourable opportunity for abolishing these allowances throughout the Force together with those for residence in Hill District, Postal Work, Supervising Boat Paint-

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