PUBLIC RECORD OFFICE
Reference :-
PLC.O. 882
6
PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO
25409
64
No. 24.
STRAITS SETTLEMENTS.
MR. CHAMBERLAIN to ACTING GOVERNOR SIR F. A. SWETTENHAM.
(No. 243.)
[Answered by Nos. 33 and 59.]
Downing Street, August 2, 1901.
SIR.
I HAVE the honour to acknowledge the receipt of your despatch, No. 277, of the 18th of June, enclosing copies of a memorial addressed to me by members of the Government Service in the Colony, in which they urge the necessity of an im. mediate increase to their salaries. In answer to this despatch, and in continuation of the correspondence which has passed on the subject, I now propose to convey to you the decision at which I have arrived; and as to which I have already communicated with you by telegraph.t
2. As you are aware, and as my despatches, No. 353 of the 21st of November, and No. 77 of the 1st of March last‡ have indicated, I am prepared to accept the position that the local salaries of Government servants in the Colony and in the Federated Malay States are as a rule inadequate. My despatch of the 1st of March also stated that I was ready to concur in your view that the higher officers of the Service should be paid in sterling.
3. In the 5th paragraph of that despatch I wrote:-
"In introducing the new system I am of opinion that all existing members of the Services should be given individually the option of either accepting the new sterling rates of salary, which will in most cases be an increase on their present salaries, accompanied, however, by a possible prospective reduction in leave salary and pension, or of remaining on their present footing without any increase of salary, but retaining their present privileges of exchange compensation and special leave and pension rates of exchange."
4. Subsequently to writing that despatch I received from you the report of the Select Committee of the Legislative Council, recommending increases to the salaries of the Government servants of the Colony, and the publication of these recommenda- tions has somewhat complicated the issue. I understand that existing Government servants in the higher grades are not likely to favour any scheme involving a diminution in the rate at which they are now entitled to draw leave pay and pension, and the question therefore really becomes a twofold one, viz., how to deal with officers already in the service, and how to pay future officers.
5. I may premise what I have to say by laying down (1) that any increases given in the Colony must be subject to the vote of the Legislative Council, the un- official members of which have already shown that they wish to treat the matter with liberality; (2) that while I gladly recognise the claims to consideration which the officers of the Colony and the Federated Malay States undoubtedly possess, they do not need to be reminded that the claims must be measured with reasonable regard to the financial prospects of the future.
6. I take first the question of payment of future officers in the higher grades of the Service.
You and I are agreed that, as matters stand, it is advisable that in such cases the exchange compensation allowance, and the artificial rates of leave pay and pension should be abolished, and that officers who would have enjoyed these privileges under existing conditions shall be paid simply so many pounds sterling converted in the Malay Peninsula into dollars " at an annual rate fixed at the time when the estimates are prepared and based on the average of the preceding twelve months." (I amı quoting from the 8th paragraph of my despatch of the 1st of March.)
This rule should be brought into force at once. All officers engaged in England from the date of this despatch will be engaged on sterling salaries, and you should lose ao time in submitting for my approval new schedules of the Cadet Service and higher ppointments in the Colony and the Federated Malay States paid on a sterling
basis.
7. I assume that, in making your suggestions, you will deal with cach appoint- ment on its merits. The salaries now paid will no doubt largely guide you in recom-
Nos. 2 and 12.
• No. 21.
† No. 23.
65
mending what rates should be paid in future, but it will not be enough simply to translate existing salaries into sterling, and while, on the one hand, I recognise, as I have already said, that existing local salaries are generally inadequate, I am anxious that you should bear in mind that no breach of faith is involved in paying this or that post at a lower rate than it is now paid, if you consider that the circumstances justify a reduction. The considerations which should and will no doubt guide you are (1) fair remuneration, having reference to cost of a reasonable standard of living, and the duties and responsibilities of the office; (2) the charge which will be thrown upon the revenue, including especially the charge for ineffective services, and the capacity of the revenue to bear it.
On the question of increments I need not add to what has been said in previous despatches. It has already been pointed out, and I refer to the matter again below, that in the lower grades of the service, for passed cadets and those more immediately above them, the incremental system is a great boon, as compensating to some extent for slowness of promotion at those times of stagnation which must be expected in all services.
8. In the 4th paragraph of my despatch of the 1st of March,* I wrote:- "I understand that you do not propose to fix the salaries of subordinate officers in sterling, and if you consider that all salaries could not be paid in sterling I am prepared to agree that officers drawing, say, $1,200 per annum and under should continue to have their salaries paid in dollars. It would, however, be necessary to inake an exception in favour of a few specified classes of officers, eg., European police constables and nurses, who, being sent from this country, should have their salaries fixed in sterling."
This paragraph will, in the main at any rate, hold good. The difficulty which has arisen, and which it is sought to obviate by introducing a sterling basis for the salaries of the higher appointments, has been the constant fluctuation in the exchange value of the dollar, and the inconvenience of the remedies which have been devised to meet this fluctuation, viz., exchange compensation allowance and an arbitrary rate for leave pay and pension. It is the European officers who have chiefly felt the changes in the dollar, and for whose benefit the remedies have been devised. These remedies, therefore, especially exchange compensation, have attached rather to persons than to appointments; but in the future it will be simpler either to draw a line between whole branches of the Government Services, as, dg., between the Cadet Service and the Clerical Service, or to take a limit of salary as proposed in the paragraph quoted above, and to have a sterling basis above the limit, a dollar basis below. In either case the limit should be drawn so as to demarcate as nearly as possible appointments which are usually held by Europeans from those which are as a rule filled locally; but all who are above it, whether Europeans or not, should be paid in sterling, whereas below the limit an exception must, as pointed out in my previous despatch, be made in the case of nurses, policemen, prison warders and others who are engaged in this country, and who should be paid in sterling, not my dollars.
9. I now turn to consider the case of officers who are already in the service. As regards the higher officers, I am not prepared to consent to any scheme whatever which will add to the already abnormal and extravagant charges for leave salary and pension. I had contemplated, as my despatch of the 1st of March* shows, giving the officers concerned the alternative of accepting a gain on local salaries, coupled with a reduction in leave and pension rates, or of simply remaining on their present footing; but I do not wish to appear to drive a hard bargain with men who have earned liberal treatment, and therefore I propose to withdraw altogether the proposal to pay sterling rates to existing officers, and now receive exchange compensation allowance on half their salaries the same allow- am prepared to give to those who ance on the whole salaries, on the distinct understanding that the 'allowance is com- puted on salaries alone (including personal but no other allowances).
This will amount to an increase in local salaries of nearly 25 per cent., but there will be no addition to the charges for leave pay or pension. In view of your strong recommendation, I am prepared to allow this concession to date back, as the petitioners ask, to the 1st of January last (if the Legislative Council in the Colony are prepared to take the necessary supplementary vote).
12169
No. 12.
I