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PUBLIC RECORD OFFICE

Reference :-

PLEC.O. 882

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ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO

6 PUBLIC RECORD OFFICE, LONDON

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In reply the then Governor, Sir C. Smith, stated:

"There is one other matter to which I have to refer, the rate at which the pension and the half-pay on leave are to be paid. It is a very difficult and complicated question, and I am hardly ready to state my full views upon it, but I should be sorry to see it fixed at less than the present rate, which is 4s. For instance, look at the 3rd and 4th classes, compare the amount of money which the officer draws when on leave with the cost of passage to England and back, together with the amount required for the purchase of clothing (which is useless to him when he returns to the Colony) with cost, if a married man, of breaking up his house, and if you take into consideration all such circum- stances as these you will find an insufficient margin left for ordinary expenses, and you may oblige him to borrow and get into debt. As regards pensions, the case certainly stands on a somewhat different footing, but looking at the subject on all sides after the experience of several years past, I can only say that I should be sorry to see the rate altered. I have still to consider the matter further, for the Secretary of State has desired me to consider whether the rate of exchange should not be reduced in certain cases to 38. 8d. I will enquire whether it would have a serious effect upon officers or on the resources of the Colony, and will report to the Secretary of State before anything further is settled."

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11. In the end it was laid down that those officers who received promotion or an increase amounting to 10 per cent. or over must accept a reduction of the rate at which their pensions would eventually be granted from four shillings to 3s. 8d. to the dollar. Since that time Exchange Compensation has been granted, and that is equivalent to an increase of 25 per cent. on all dollar salaries, but this increase did not affect either the leave pay or pensions.

12. I think that the Members of this Service who memorialised this subject made a mistake in stating only one side of the case.

you last year on That they possess certain vested rights of considerable value to them is evident from the facts which I have stated, and I am certain that they would best secure your favourable considera- tion of their case by a candid statement of all the circumstances.

13. I have now put you in possession of the facts; and, as it might only lead to a useless waste of time if I were to continue to elaborate a scheme that would either create almost universal discontent in the Service, or fail to secure your sanction, I have decided to place the matter before you at the earliest possible moment, in order that I may take your instructions and save a useless waste of time and labour.

14. The scheme of the Legislative Council is already in your hands. If approved it would, I believe, give general satisfaction, except in a few cases which could be dealt with as required. If you were to decide that this is the best solution of the problem you would, no doubt, determine whether the receipt of any increase at all, or of any percentage of increase, should carry with it a corresponding reduction in the pension rate or not; or whether no part of the increase now granted should be pensionable. As regards that point, there are three alternatives, but when it has been settled by the choice of one of them, there still remains the question of leave pay. As I have already said, I believe the Service not only hopes, but expects to get the increase) recommended, without any reduction in either leave pay or pension rates. time I imagine that, even if you decided that no part of the increase was pensionable, At the same the Service would still be pleased to obtain the higher dollar salary with its accom- panying Exchange Compensation and a four shilling leave rate. Let me take an example :-

There is the appointment of Assistant Protector of Chinese, Penang, which, at the moment, is held temporarily by Mr. Firmstone, a Cadet of eleven years' standing. The present salary of the appointment is $4,800, with compensation, equivalent to $6,000. That is a salary of £600 a year, while resident in the East, but for leave pay, worth £900, and for pension at 39. 8d., £880. The Council has suggested for this appointment $5,400, rising to $6,600, i.e., worth £675, rising to £825 while in the East, but for leave pay equal to £1,320, and for pension to £1,210. This appointment is in the 3rd class and these figures show how difficult it is to suggest a sterling salary which the holder would consider gave him the immediate increase to which he thinks he is entitled, without taking from him any of the privileges which he already possesses.

15. Supposing you decide to sanction the Committee's scheme, with or without any modification as regards pension rates, the Exchange Compensation difficulties will still remain, while the embarrassments of the Government on account of applica- tions for leave will be intensified.

16. I may here say that all I have written with reference to the officers of this

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Colony applies with even greater force to those in the Service of the Federated Malay States. These latter are certainly at least as anxious as their comrades to give up nothing, and to gain as much as they can, and, owing possibly to a harder life, they are more persistent in applying for vacation and half-pay leave.

17. It appears then that any general increase of salaries on the lines I have named, has serious objections if the interests of the Government are to be considered. Especially is this the case if due regard is had to the future, when a number of officers now serving may have retired. The alternative is the sterling scheme, and I have already described its advantages. To make such a scheme acceptable, especially to the older servants of the Colony and the Federated Malay States, it would be necessary to almost double the sterling value of their present dollar salaries, e.g., the Treasurer, who can now claim leave pay on £1,560, and pension on £1,430, would probably be satisfied if his salary for all purposes were fixed at £1,500 a year. This, while making no practical change in either leave pay or pension rate, would give him $15,000 a year instead of $9,750. It would be the same with most of the other appointments, but, as we got down to the lower classes (and to officers who had joined since 1st July, 1897, whose exchange rate is three shillings for both leave pay and pension), the differ- ence would, of course, be less. I do not know whether you would consider a sterling scheme on any such lines as here indicated, but I confess that, for the sake of finality and in order to abolish such strange anomalies as those which now exist, I could more conscientiously recommend it than the perpetuation of the existing order of things.

18. I need say nothing more as regards the existing rates for leave pay and pension. They must appear to any uninterested person quite out of proportion to the salaries drawn in the Colony, and I think they have been regarded as the only re- deeming features in an otherwise insufficiently paid Service. I do not wish to seek any comparison with the salaries paid in India, but I am satisfied that looking to the class of men who for the last thirty years have recruited this Service, and to the work that is required of them, in a very trying climate, so far from their homes and families, the salaries hitherto allotted to the higher, and probably even to the lower, officers have been very inadequate.

19. The Members of the Service individually and collectively have repeatedly asked for more generous treatment, and they have founded their grievances on all sorts of grounds from the rising price of a chicken to the falling value of the dollar. Personally, I believe their troubles should be attributed to the ever increasing pros- perity of this Colony, and that prosperity is, again, mainly due to the rapid develop- ment of the Federated Malay States. This prosperity has led to the rapid making of money by the merchants and professional men of the Colony, many of whom have retired with fortunes varying from £30,000 to £100,000. The style of living has conge- quently grown more expensive, and everything has increased in price. The necessity for better remunerating the servants of Government who are mainly responsible (especially in the Malay States) for this increased prosperity, has become so obvious that the Unofficial Members of Council are unanimously in favour of improving their positions. The revenues, both of the Colony and of the Malay States have increased to such an extent that there are ample funds to meet the charge of any increased expenditure on establishments which you may sanction. At present the percentage of cost of establishments to revenue is in the Colony 33 per cent., and in the Federated Malay States 13.32 per cent.

20. Finally there are two or three points which ought to be mentioned--

(a.) Nearly thirty years ago, when the value of the dollar was between 48. 3d. and 4s. 6d., the salary of the Treasurer (a post which I have already taken for the sake of example) was about $4,800, say, about £1,050, with leave pay and pension on that amount. Now, with the dollar at 2s., it is $9,759 (including compensation) or £975, though the revenue of the Colony has grown from less than a million to over six millions of dollars, and the cost of living has increased enormously, s

(b.) There are officers in the Service who have drawn leave pay at 4s. when the dollar was actually worth that sum, and their case is clearly different to that of those who have entered the Service since it reached 3s. or even 2s., at which figure it has now been for a number of years.

(e.) It has been stated to me by several leading unofficials here that in this matter they strongly deprecate any comparison with Hong Kong, Ceylon, or Mauritius. They say that this Colony is more prosperous than the others named, that the prosperity is likely to continue, and that it can well afford to treat its servants generously, where-

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