Tel. No.: Whitehall 1234.
NATIONAL
SCHE
Your Reference 53723/6/48
Treasury Reference I.F.272/187/
04 B
Copies sent to Accts. *.D.22
Dear Wallace,
(14)
37
TREASURY CHAMBERS,
GREAT GEORGE STREET,
16.
LONDON, S.W.1.
7th May, 1948.
Flease refer to your letter of 23rd April about exchange arrangements to be made for the payment of pensions and leave salaries to Hong Kong expatriate officers.
We spoke about this on the telephone and I undertook to write to you in confirmation.
I told you that we found some difficulty in accepting the Governor's proposal to give officers the option of having their pensions calculated and paid at a fixed conversion rate, viz. 16 dollars to the £. In addition to setting a precedent which other colonies might wish to follow, we feel that the proposal has few practical advantages to recommend it. Presumably it is designed to safeguard officers against any fluctuation in the relative value of the Hong Kong dollar and the £ sterling. But if fluctuations did occur to such an extent as to make the officers appreciably worse or better off then clearly the fixed rate would have to be revised (as you yourself envisage), so no additional stability would result.
Surely the most effective way of ensuring that the value of officers' pensions remain stable is to adhere to our original intention and calculate them according to the Government rate of exchange? As you will know, one of the objects of having this official rate is to maintain a reasonably stable relationship in the comparative values of the respective currencies.
We realise that special circumstances may arise; but these are covered, so far as it is possible to cover purely hypothetical eventualities, in the last paragraph of your
(9) Telegram No. 309.
W.I.J. Wallace, Esq.,
Colonial Office,
Yours sincerely,
Ipfancy