Tel. No.: Whitehall 1234
KUN TO
SCHEM
Your Reference.
Treasury Reference..
292
TREASURY CHAMBERS,
174.
GREAT GEORGE STREET,
LONDON, S.W.1.
31st December, 1947.
Dear Wallace,
I promised to let you have my idea of what you should send to the Governor of Hong Kong in the separate telegram which you have promised him about cost of living allowances above $1499 per month. I suggest the following.
"Cost of living allowances are, I think it must be accepted, designed mainly to prevent officers from suffering undue hardship through a temporary rise in cost of essential commodities and services. Where an officer's other emoluments are clearly sufficient to protect him from such hardship a cost of living allowance is difficult to justify and I therefore suggest that cost of living allowances in Hong Kong above $1499 per mensem should be tapered off so as to disappear altogether at the figure of (?) about £1700 per annum. Before expressing a final view on this matter I should be glad of your observations in particular as to the figure at which the taper off should become finally effective.
I have emphasised in my previous telegrams the temporary nature of the cost of living allowance and the importance I attach to its future regulation. I should here explain that the material at our disposal here, following a recent enquiry by the War Office for its own purposes, covering such goods and services as clothing, washing, servants, chemical and toilet supplies, transport, recreation and rents, but not food, goes to show that the cost of living in Singapore is appreciably higher than in Hong Kong. Indeed for the services I have listed the difference is upwards of 30% in favour of Hong Kong and the War Office are fixing
W.I.J. Wallace, Esq.,
Colonial Office.
/their
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