- 2.
58
of the following month and that special arrangements were made at the discretion of Government when the exchange rate was outside the limits of one shilling or two shillings to the dollar. A copy of General Order No.100 is attached -for facility of reference.
5. If sterling were devalued, the Hong Kong doller which is pased on sterling would depreciate in terms of gold but there seems to be no reason why the value of the Hong Kong dollar should be reduced in terms of sterling, and if Hong Kong were to leave the sterling area, there is the possibility that it might even appreciate. Any guarantee as regards the rate of exchange should therefore in my opinion operate both ways. After full consideration of the problem I am of the opinion that the only practicable solution is to offer to serving expatriate officers a guarantee that an exchange rate of #16 to the pound sterling will be maintained for pension purposes whether the dollar appreciates or depreciates in terms of sterling. It might also be necessary to extend this guarantee to payments of leave salaries outside the Colony and to sterling remittances made by officers while on duty in the Colony up to a certain proportion of their emoluments. In the event of the rendition of the Colony to China it might
well prove impossible to maintain the Hong Kong dollar rate as the date for the implementation of the decision approached but a two way guarantee of the nature suggested if applicable to pensions would also cover gratuities on abolition of office.
for
7.
I do not consider that there is any valid case a guaranteed rate of exchange in respect of current salaries payable while an officer is on duty in the Colony, since any fluctuations in exchange rates will have to be met for some considerable time at any rate by appropriate adjustments in cost of living allowances.
8. Problems of this nature have no doubt arisen in other Colonies on the substitution of the local currency for sterling as a salary basis and, as it will affect the option which expatriate officers will in the immediate future be asked to make in respect of the re w salary scales, I shall be grateful for your advice at the earliest possible opportunity as to the nature of the reply to be given to the Council of the Association of European Civil ¡Servants.
thuas
I have the honour to be,
Your most
sir,
obedient, humble
Mharita
Governor.
servant,