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Enclosure 2.

RECO

CO 35339

TREF 5 OCT 07

Government House,

309

Hongkong, 16th August, 1907.

Sir,

I have the honour to acknowledge receipt of your letter of 14th instant which you request me to forward to the Secretary of State.

2. Before doing so it appears to me that I might usefully point out to Your Honour what seems to me to be a misapprehension of the meaning intended to be conveyed by the words quoted from Lord Elgin's despatch of August 24th, 1906.

3. His Lordship observes that "the scale of pay of Government Servants in Hongkong compares favourably with that obtaining in most other parts of the Empire", and if in Your Honour's opinion this statement is not fully borne out in the case of the salaries of the Judges, it would be necessary to quote cases in other Colonies in which the salaries contrasted unfavourably with those of the Judges in this Colony. Shanghai I need hardly remind Your Honour is not in the Empire to which alone His Lordship's comparison referred and the salaries paid by one Department of State are not necessarily the same as those paid for more or less similar services under another Department of State and a similar discrepancy may in many cases be observed with regard to the scale of pensions.

4. If after considering this point Your Honour still desires that I should forward your letter to the Secretary of State, I shall of course be glad to do so together with a copy of my reply.

I have etc.,

(Sd.) F. D. Lugard,

Governor, &c.

The Chief Justice.

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