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7.
6.
The position of the dollar-paid officers has now to
be considered. In their case the arguments set out in paragraph
2 do not apply. There is nevertheless sone reason for calling
upon them to bear a heavier direct cut than the Sterling Staff
in that the Salaries Report (copy attached as Annexe ¤, see
paragraph 14) gave them a 20 increase in basic salaries while the Sterling Staff, (see paragraph 11 ibid), only received a
15 addition, the High Cost of Living Allowance (paragraph 12)
having never in fact been paid.
At the same time account must be taken of the fact
that for dollar officers as well as sterling officers the cost
of living will rise with the fall in the exchange value of the
Hong Kong dollar. It is therefore sugested that for dollar
officers the "Alternative Scheme" shewn at the foot of Annexe B
be adopted. It will be seen that taken over-all this scheme
inflicts a cut of 4.2 as against a cut of 4.16′ for sterling
officers.
8.
The combined effect of the schemes now proposed is estimated to produce a saving of $931,475 +$212,000 - $1,143.475
a sua rather less than the amount of the additional taxation
imposed through the "conventioml" dollar. A more or less
equal burden is therefore borne by the public and its servants,
With all these sacrifices however there will remain at the end
of 1936 a deficit of $1,612,828 of which $500,000 can be met
by a raid on the Trade Loan and the rest must come from surplus
balances which will thus be reduced at the end of 1936 to
$8,135,927.
It must be borne in mind, however, that by that time a
number of our most expensive Public forka will either be coa-
pleted or nearing completion and our commitments for 1937 will
therefore be comparatively small. At the same time, i.c. in
1937 we may hope to be in a position to realise some of the
な