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I think it is necessary to bear the above facts in mind if one is not to obtuin a distorted view of the present difficulties in II ng Kong.
I need hardly say that the Government of Hong Kong, as well as the Colonial Office, is deeply concerned about the difficulties which are being experienced by Government officials owing to the high cost of living and the suggestion by Sr. Millin ton that the Hong Kong Government is attempting to use the present cif icult situation to "squeeze out" (to use his own words) Europeans in order to substitute locally recruited officers, is of course entirely unwarranted.
The Ang Kong Government is faced with the problem of shortage of supplies, and until this difficulty, which is a world one, can be overcome, it is difficult, if not impossible, to bring down the cost of living, and an increase in salaries to correspond in full to the incrcased cost of living would only add to the inflationary situation which unfortunately already exists in Hong Kong.
There is at present a Salaries Commission under the Chairmanship of Mr. Duncan Slo88 which is required to consider and submit recommendations for the revision of the salaries and conditions of service of Hong Kong Government officials and to consider the extent to which the cost of living allowances should be incorporated in basic salary having regard to the
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