PUBLIC RECORD OFFICE
Reference :-
TLC.O. 882
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6 PUBLIC RECORD OFFICE, LONDON
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20875
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No. 17.
STRAITS SETTLEMENTS.
ACTING-GOVERNOR SIR F. A. SWETTENHAM to MR. CHAMBERLAIN.
(Confidential.)
(Received June 18, 1901.)
[Answered by No. 18.]
SIR,
Government House, Singapore, May 17, 1901. IN continuation of my previous correspondence, and with special reference to your despatch, No. 77, of 1st March, I have the honour to inform you that the enclosed petition (with a similar petition from Malacca) was forwarded to me, and I thought it best to invite the writers to meet me here, in order that I might discuss the salary question with them, and explain to them the broad lines of the sterling scheme, which i have been preparing.
2. I had a very long interview with the signatories of this petition, and the im- pression left upon me was:-
(a.) That they expected an immediate and general increase to salaries to date from the 1st January last, and
(b.) That they were not in favour of any sterling scheme which would directly or indirectly affect any privilege which they now possessed.
This morning the Acting Colonial Secretary, Mr. Kynnersley, has confirmed me in this view, and he assures me that he is absolutely certain that the service, almost without exception, is opposed to any scheme of salaries on a sterling basis, which would result in the reduction, not only of the present rates of leave pay and pension, but of prospective advantages on either account.
3. It is certainly strange that, while the members of this Service have for years been complaining of the decreasing sterling values of their salaries, by reason of the fall in the price of silver, that now, when you are willing to fix those salaries at fair sterling rates, the Service should be unanimously opposed to the change.
As it was in consequence of my advocacy that you have consented to a sterling scheme, as I believed such a scheme would be to the advantage of the Service as a whole; and as you are probably no more desirous than I am of creating discontent amongst a body of deserving servants of the Crown, it is my duty to at once inform you of the real state of affairs, and to take your further instructions in the matter.
4. I have no doubt whatever that from the Government point of view the sterling scheme is the only right one; but, whilst that scheme is somewhat belated, the position has been further complicated by the grant of a compensation allowance which amounts to 25 per cent. of every European Officer's salary.
5. From every point of view it seems clear that, unless the officers of this Service are to receive their salaries in silver only, whether while resident in the Colony, or on leave in England or elsewhere, or after retirement on pension, they should be paid in sterling, or its actual equivalent in local currency.
pay,
A sterling settlement would mean absolute finality to a question which otherwise may be raised from time to time, so long as the relative values of gold and silver continue to vary. It would mean the abolition of exchange compensation, and all the many difficulties and heartburnings which surround the grant of that allowance. It would mean that when an officer took vacation leave, he would receive his real full and, when he was on furlough, the half of his actual salary, and not, as at present that whilst idle in a good climate he would actually receive more salary than when at work in a bad one. The applications for leave, r any of which are now made to secure this desirable result, would, of course, be much less frequent, and the interests of the public service would gain proportionately. It would also mean that when the officer retired he would draw a pension calculated on his actual salary and not on a fictitious sum, which he had never received, except possibly when on leave in Europe. Finally it would mean that when looking at the Estimates, the establishments or the Colonial Office List, the reader would see plainly what were the emoluments of Government Officers in this Colony and not, as is at present the case, be entirely misled by them.
6. So much for the advantages of the principle, which I have advocated, and to which I must adhere. It is, however, necessary, more necessary in fact, to describe exactly the vested rights which officers in this Service (and also in the Federated Malay States) have acquired, and which they are so unwilling to part with. The
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amount of salary which is found opposite to an officer's name in the Establishment List, or in the Colonial Office List, is very little criterion either of what he actually receives or of his vested rights in the shape of leave pay and pension. Take, for instance, the Members of the Executive Council, whose salary is recorded as $7,800, the equivalent at the present moment, of £780 sterling. What the officer actually receives whilst at his post is $7,800 p.us $1,950, equal to $9,750, and every addition in the shape of personal allowance, house rent, &c., also carries the 25 per cent. com- pensation. When an officer on $7,800 takes leave and draws his salary in England, he draws it at the rate of £1,560 a year for full salary, and, when he retires, his pension will be calculated on that sum if he can claim the four shilling rate, or on £1,430 if he can only claim the 39. 8d. rate.
7. Under these circumstances it is, of course, extremely difficult to propose a rate of sterling salary, which shall give immediate and substantial relief. and shall not at the same time deprive the officer of even more valuable privileges, e.g., if it were re- commended to give those Members of the Executive Council who now draw $7,800 a salary of £1,200 per annum, the apparent increase would be £420 a year, but the actual increase while serving in the East would only be $2,250 or £225. Even that may seem generous; but if against it is set the necessity of accepting leave pay at £1,200 instead of £1,560, and pension calculated on £1,200, instead of, either £1,560, or £1,430, the advantages are not so apparent.
8. I was prepared to recommend that in the case of all officers who have served ten years and upwards, and who accepted the sterling scheme, that they should be allowed to carry with them the rate of pension to which they would have been entitled had they retired on the date when the new scheme came into force; until, of course, by continued service, they had earned a better pension on their new sterling salaries. I should have recommended sterling salaries which would give a substantial dollar increase over present rates, and I thought that, in return for that increase, officers might be prepared to sacrifice the existing fictitious leave pay rate of four shillings to the dollar. i find, however, that if they accepted a sterling scheme they would expect to give up nothing; and they hope that they would be allowed to continue to earn pension on the sterling value of their former salary. That is to say, an officer whose present salary is $7,800 if given a sterling salary of £1,200 would expect his service to count for pension not on £1,200 but on the £1,430 or £1,560 to which he is now entitled. I also understand that the Service would consider it to be a great grievance if asked to relinquish their present right to draw leave pay at four shillings to the dollar.
9. These scem serious difficulties, but I consider that they have been greatly increased by the proposals of the Committee of the Legislative Council, which have already been published and forwarded to you. I have little doubt that every officer concerned regards those proposals as almost certain to receive your sanction, and each individual who is a gaîner under that scheme, will compare any scheme of sterling salaries, not with his present emoluments, but with those recommended by the Committee of Council. It does not appear to have occurred to the Committee that every increase also carries compensation, or that, if the scheme recommended by them were accepted by you without reservation, it would mean a continuance of leave pay and pension at the same fictitious rates on a larger number of dollars.
10. I notice that when this Service received a more or less general increase of salaries in 1890, and the proposals, having already received the sanction of the Secretary of State, were submitted to the Legislative Council in order that the funds might be voted, Mr. W. Adamson, in the course of his speech, asked the following pertinent question :--
I notice that there is one point which I should like to speak on with reference to the whole question of salaries, which has not been referred to by the Honourable the Colonial Secretary, but which is of great importance. We are giving considerable increases to different officials, but we have not considered to any extent what might be the effect of these increases upon the pension list. Honourable Mem- bers are aware that there are certain pensions paid at one rate of exchange, and certain pensions paid at another rate of exchange, and that one ground of our agreeing to a readjustment of salaries is that there is considerable reduction in the purchasing power of the dollar, and, therefore, it is important that we should understand what is to be done in future with the pensions, and whether the increase of pay, which is partly based on the fall in silver is to apply to pensions which are not affected by this
cause."