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violent, the recent rise in the dollar has been to cuddon, that there is no security against an equally sudden fall, and tradesmen would be bound, in order to protect themselves against a fall, to fix their prices for new goods on the low dollar basis.
The uncertainty of commercial dealings caused by the rapid fluctuations of the dollar, can best be tested by a simple illustration.
Case 1. If a tradesman orders £100 worth of goods when the exchange is at 3/6, if he sends a draft with the order he will pay $800.
If he pays by Bill of Exchange drawn on him at sight and the dollar has meanwhile fallen to 5/-, he will pay $1000.
Case B. If for the same goods the rate is 2/8 at the date of payment he will pay $600. If he proposes to make 20% profit he will ultimately receive $1000. But if before he sells the goods the rate has fallen to 2/-, if he maintains his prices, the $1000 will only represent £100, and his intended profit will be lost.
Experience shows that although the dollar has risen, in 6 months, the utmost concession that a few tradesmen have made is a reduction of 5% on their prices, more than ...
The Government itself acts on this principle in the matter of advances to Civil Servants made by the Secretary of State. Repayment is made by monthly instalments calculated at the rate the advance is made current at the time, irrespective of any subsequent rise in exchange.
Your Excellency has said that "house rent is the chief if not the only expense of living which is not lower in this Colony than in most others, where customs duties are levied and where wages are higher" and the Secretary of State has said that "the rate of pay of Government Servants in Hongkong compares favourably with that obtaining in most other parts of the Empire".
With great respect we submit that it is not ...
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