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Commissioners of His Majesty's Treasury that those of the staff who were in the Hong Kong Civil Service on the 31st of December 1910 should be regarded as still members of that service although employed on duties connected with the Imperial Service. In accordance with this suggestion I am to submit, for communication to the Hong Kong Government if the Secretary of State for the Colonies concurs, a proposal that those members of the staff who were taken over with the Agencies should be regarded as members of the Hong Kong

Civil Service whose services have been lent to the Imperial

Government, that their salaries should be paid by the Hong

Kong Government, subject to reimbursement by the Imperial

Government, and consequently should be provided for in the

Hong Kong estimates and that if the Hong Kong Goverment

would undertake to grant them any pensions or gratuities for

which they may have become qualified under Colonial Regulations, the Lords Commissioners of His Majesty's Treasury would (in respect of the period since the 1st of January 1911) be prepared to contribute to the Colony a reasonable percentage of the salaries upon which pension or gratuity would be calculated to cover the cost of the pensions eared by their service during that period. If this proposal is accepted Their Lordships agree to exclude from the revenue of the Hong Kong Government as calculated for the purpose of assessing the military contribution of the Colony, the payments which will be made by the Imperial Government in respect of salaries or pensions.

I am to point out that a contribution from Colonial funds would seen in any case to be due towards the cost of

the

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