Government House, Hong Kong, 25th June, 1885.

I have the honour to acknowledge the receipt of Your Lordship's despatch No. 78 of the 10th May ultimo - in reply to Mr. Marsh's despatches respecting certain proposed increases.

The proposed increases are twice as large as are necessary to make up for the change in Remittances, yet, if the Government is persuaded that larger salaries will secure an office that is offered in future, the present staff should also receive the increase, that Lord Derby is prepared to allow the increases proposed.

But it does not suggest that the increases would more than make up the difference in Remittances, it seems to offer hardly necessary to test the alternative to the men of continuing the high rate of remittance, or of receiving a higher rate of salary.

I should give the higher rate of wages &c. and convey the remittances from all, of course not including where allowances &c. have increased pay.

Add that in regard to the particular statements of the last Engagement, His Lordship awaits Mr. Hodges' report from the Straits before replying. "H.W.J. 16 Aug. 4."

"I hope they will make the men contented. D.A.24. El 22"

My Lord,

132 C.O. 13420 RECO REGO 4 AUG 33/

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The Earl of Derby, Her Majesty's Principal Secretary of State for the Colonies,

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