1
1949 deals with the former contingency.
2.
May I deal with the former contingency first?
It is presumably conceivable that the rate of exchange
might vary slightly above or below the present
conventional rate of ls. 3d. but not sufficiently to
affect the local cost of living.
The variation would
not, therefore, justify any alteration in the present
dollar rate of salary for expatriate officers.
At
}
the same time the variation would affect the amount of
That
the sterling pension if were assessed at the then
If for instance the rate
current rate of exchange.
dropped to ls. ld. it would seriously affect the amount
of an expatriate officer's sterling pension if his
pension were assessed at that rate. If the rate
increased to ls. 5d. it would considerably augment the
expatriate officer's sterling pension if his pension
were assessed at that rate. It is of circumstances
such as these that we were thinking when in paragraph 1
of the Secretary of State's telegram No. 640 it was agreed
that the officer should be given the option of having
his sterling pension assessed at the fixed rate of ls. 3d.
He would then be able to estimate exactly what his
sterling pension would amount to.
Alternatively he
could opt to have it assessed at the rate current at the
date of his retirement with the gamble that he would
stand either to gain or to lose. But in these
circumstances the officer must exercise the option now,
as if he defers it until he is actually on the point of
retiring it seems to us that he would be able to opt for
the ls. 3d. rate if the rate had depreciated at that
date or to opt for the actual rate if it had increased
above ls. 3d. at that rate.
him the best of both worlds.
That seems to us to give
In so far as the first
two sentences of paragraph 5 of your letter refer to
circumstances such as these, I am afraid I must admit
/that
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