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against an estimated expenditure of thirty-two and one quarter, i.e. a deficit of three and one-half millions; and this moreo ver
16/3d. It is on a reckonin: of sterling commitments at 1 estimated that the Colony's surplus funds on the 1st January will total approximately eleven and one-quarter million and, while I am not blind to the fact that the main utility of a surplus is to carry an Adainistration through lean years, I do not deem it prudent (and my advisers are at one with ne in this view) to let the level down to below eight millions on the next year's working. I have therefore had under critical review various items of personal emoluments with a view to cutting down rent, language and other allowances which appear to have been somewhat promiscuously and lavishly granted in the past. As regards the future I am recommending in a separate despatch an adaptation of the African basis of remuneration to Hong Kon: appointments but the present necessity is to secure an immediate economy in the cost of personnel. ith this end in view the Colonial Treasurer prepared a programme of curtailments in allowances which on the 31st July I discussed with all leads of Departments.
0.
At this meeting it was impressed very strongly upon me that the "ervice would prefer the continued imposition of a salary levy to any interference with allowances. Many arguments were adduced but the two principal ones were:-
(a) that there should be equality of sacrifice on the basis of pre-slump emoluments; this would be effected by a salary levy but not by docking allowances which some were drawing
and others mot; and
(b) that the public should know that Goverment servants were "doing their bit" in the depression, and a salary levy would command popular appreciation whereas a reduction of allowances would pass either unnoticed or insufficiently comprehended. The force of both these arguments must be admitted and, in view of