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23. The salaries of the Sanitary Officers seem to me to be rather low, in view of the importance of obtaining and keeping the services of well-qualified and ex- perienced men for this work; and I would suggest that at any rate the sterling rates might be not less than the existing dollar salaries converted at 3s. the dollar.

24. I do not see any objection to the other salaries proposed by Sir Henry Blake. 25. It is of importance that the introduction of the sterling scheme should not be delayed; and I shall, therefore, be glad if any representations that you wish to make with a view to the reconsideration of any part of the proposals contained in this de- spatch can be made at the earliest possible date. If, however, you are of opinion that the scheme may be accepted, with the amendments which I have proposed, I would suggest that the scheme, as amended, should be published forthwith; and that officers who are now serving on dollar salaries should be given a period of six months, during which they may elect to come under its provisions. This period should be extended in the case of officers on leave by so much time as is necessary to permit of the scheme being communicated to them from the Colonial Secretary's Office.

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No. 67.

I have, &c.,

STRAITS SETTLEMENTS.

J. CHAMBERLAIN.

MR. CHAMBERLAIN to GOVERNOR SIR F. A. SWETTENHAM.

(No. 181.) SIR,

[Answered by Nos. 74 and 84.]

Downing Street, June 13, 1902.

I HAVE the honour to inform you that I have given most careful consideration to your despatch, No. 27, of the 20th January last,* in which you submitted a scheme of sterling salaries for the Straits Settlements.

2. In my despatch, No. 73, of the 10th March,† and in previous despatches, I have explained my views regarding the manner in, which officers who entered the service before last August will be affected by the introduction of the sterling scheme. The decision which I have laid down may be summed up by saying that within a fixed period after the publication of the sterling scheme ofhcers will be allowed a free and final choice between coming under the scheme and continuing to receive, during the rest of their service, salaries fixed in dollars, as at present, with the addition of double exchange compensation. I am inclined, however, to modify the finality of this choice in the case of officers who may be transferred from the Straits Settlements to the Federated Malay States or Hong Kong. In such cases I think an officer who has elected to remain on a dollar salary in the Straits Settlements might be allowed the option of coming under the sterling scheme on transfer.

3. I propose, before passing to consider the details of the scheme, to deal with certain general questions arising out of the earlier part of your despatch. I agrec with your suggestion that an officer's promotion should depend upon the satisfactory nature of his service, and not be governed entirely by considerations of seniority. I am, indeed, inclined to go further, and to suggest the adoption of the rule which has been for some time in force in some Colonies and in the Home Civil Service, viz., that the payment of the increments attached to a post shall depend, not merely upon service for the requisite period, but also upon the production of a statement signed by the Head of the Department, certifying to the proper discharge of his duties by the officer concerned.

4. I note that you propose that continued service in one class shall not count towards the earning of an increment in the class above; but I think that the opposite course is more satisfactory in cases where the maximum salary of one class is the same as the minimum salary of the class above it. It might perhaps be well to make a compromise in such cases, by which continued service on the maximum should be counted towards an officer's first increment on his promotion, but not counted in full.

• No. 48.

↑ No. 55.

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5. It will be more in accordance with the principle of absolute severance between the dollar and the sterling systems of salary if the rule as to acting salaries be as follows:-

When an officer who has chosen to remain on the dollar scale is acting for an officer who is on a sterling salary, he should receive half the (dollar) salary of his substantive appointment, and half the now existing dollar salary of the post in which he is acting. Similarly, when an officer on a sterling salary is acting for an officer on a dollar salary, he should draw half the sterling pay of his substantive post, and half the initial rate of salary attached, in the sterling scheme, to the post in which he is acting.

This arrangement may in some cases involve the Government in expenditure over and above the salary provided for the post on the estimates; but this extra cost must be met out of the vote for exchange compensation.

6. In paragraph 11 of my despatch, No. 77, of the 1st March, 1901,* I laid down that an acting officer should draw half the initial pay of the post in which he is acting. This decision must be qualified so as to ensure that the acting officer shall suffer no loss by the arrangement, as would be the case, e.g., if the Superintendent of Police at Malacca, drawing the maximum sterling pay of his post, were to act for the Superintendent of Police at Penang.

7. Turning to the sterling scheme itself, I observe that the average rate of salary appears to be somewhat above the scale of existing dollar salaries, converted at 3s. the dollar. As existing officers are now drawing their salaries in the Colony at 3s., since the grant of double exchange compensation, it would, perhaps, have been difficult to adopt a scale, the average of which would be below the 3s. rate.

8. You calculate that the average increase on the present rates of salary including double exchange compensation will be about $62,500 a year. increase, although it is not quite one per cent. of the total revenue of the Colony; and This is a substantial I have felt some hesitation, in view of the increasing liabilities of the Colonial reve- nues, in making up my mind whether or not to suggest a general reduction in the salaries which you propose.

9. I have, however, already fixed a scale of remuneration for unpassed and passed cadets, which, though liberal in comparison with their former salaries, even when converted at 3s. the dollar, does not seem to me, considering the class of man it is desired to attract, to be calculated at too high a rate.

It is, moreover, very desirable that young men, when weighing the prospects of the Straits Settlements service in comparison with those of other services and employ- ments, should have before them a carefully graded scheme, the salaries in which would bear a proper relation to the salaries offered to cadets; and which would be so framed as to modify, by a reasonable scale of increments, the unequal chances of promotion.

I may add that the difficulty which has been experienced of late in obtaining suitable candidates for professional and technical posts has impressed me with the necessity of increasing the salaries of some of these appointments.

10. I have, moreover, not failed to bear in mind that the cost of this scheme will be to some extent reduced by the gradual disappearance of the privilege of receiving leave pay and pension at artificially enhanced dollar rates.

11. I am, therefore, prepared to approve the scheme as a whole, subject to the detailed considerations which follow.

12. I agree to the salary of the Colonial Secretary being fixed at £1,600 per annum, but I consider that in accordance with the proposal made in paragraph 2 of my despatch, No. 382, of the 13th December last,t officers appointed in future to this post, and to that of Resident Councillor at Penang or Malacca, should be required to pay a moderate rent for the Government houses occupied by them.

13. I agree to the salaries proposed for the rest of the cadet service. I have to point out, however, that it was decided in August last that a passed cadet who remained three years without a substantive appointment should, at the end of that time, at once have his salary raised to £350 a year; not, as you suggest, by two triennial increments of £25.

This will go some way towards meeting the recommendations of the Unofficial Members of the Legislative Council that the minimum half salary of a passed cadet on leave after six years' service shall be £200.

• No, 12,

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14. As regards the legal posts, I think that the salary of the Chief Justice should not be fixed lower than £2,000 per annum, and private practice as a barrister which the Attorney-General now enjoys is ever taken would suggest that if the away from the post, the salary should be fixed at £1,500 per annum. Otherwise I agree to the rates proposed.

I note that the appointment of Solicitor-General, Penang, appears to have been overlooked in drawing up the scheme. I would suggest a salary of £900 for this post; thus preserving the ratio which the dollar salary now bears to that of the Attorney-Generalship.

15. I also agree to your proposals as to the medical and ecclesiastical appoint-

nients.

16. I notice that you wish to reduce the salary of the Director of Gardens, which is now $4,800 per annum (or, at 3s., £720), to £480, rising by triennial incre- ments of £30 to £600. You do not assign a reason for the reduction, and, without further explanation, I do not see my way to sanction it. 1 attach great importance to fixing the salary of this post high enough to ensure that it will continue to attract men of scientific attainments; and I am disposed to suggest that the minimum sterling salary should be £600, rising to a maximum of £720. Otherwise, I see no objection to the sterling rates proposed for "Miscellaneous appointments."

17. The salaries suggested for the Public Works and Survey Department appear generally suitable. I would, however, give the Superintendents of Works and Surveys three increments of £40 instead of four of £30, and give the same rate of increment to the Senior Survey Officer. I also consider that the Assistant Superintendents of Works and Surveys should be given the same rate of salary as the Senior Survey Officer. The same rate might also be granted to the new post of Architectural Assistant, referred to in your despatch, No. 61, of the 14th February last.*

18. The only other Department as to which I feel any doubt is that of Education. I incline to think that £200 per annum is too low an initial salary for European masters, and I would further suggest that First Grade Masters might be put on the scale of Class V. of the Civil Service, viz., £420 per annum, rising to £480 by triennial increments of £30.

I should be glad if you would consider whether the post of Sub-Inspector of Schools, Malacca, might not, on the occurrence of a vacancy, be placed on the scale suggested above for First Grade Masters, and thrown open to cadets.

19. I have addressed you in a separate despatch, No. 141, of the 30th May,† in regard to the question of the rate at which sterling salaries should be converted into dollars for purposes of local payments.

The same rate should be applied to the payment on leave in non-Asiatic countries of the salaries of those subordinate officers hereafter appointed whose salaries continue to be fixed in dollars, viz., all officers whose salaries are at present below $1,200 a year, and who hold posts not usually held by Europeans; and all those who hold elerical appointments.

*

20. I have also addressed you in a separate despatch (No. 178, of the 6th instant), in regard to the proposal made in paragraph 19 of your despatch, that the special "professional qualifications" addition to the pensions of certain officers should be abolished.

21. If you accept the modifications of the sterling scheme which I have suggested in this despatch, would be well that the scheme should be at once published, and that a period of six months should be fixed during which existing officers should be allowed the option of coming under its operation. The payment of salary at the sterling rate should not, in any case, begin before 1st January next.

The six months' period should, of course, be extended in the case of officers on leave, so as to permit of the scheme being communicated to them from the Colonial Secretary's office.

22. In conclusion, I desire to express my appreciation of the care and ability with which this scheme and that for the Federated Malay States have been drawn up, and the full and lucid explanations with which they have been accompanied in your despatches.

23. I enclose a copy of a despatch§ which has been addressed to the Governor of Hong-Kong.

I have, &c.,

J. CHAMBERLAIN.

• Not printed.

† No. 63.

↑ No. 48.

{ No. 66.

6885

SIR,

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No. 68. FEDERATED MALAY STATES.

MR. CHAMBERLAIN to HIGH COMMISSIONER SIR F. A. SWETTENHAM. [Answered by No. 92.] (No. 159.)

Downing Street, June 13, 1902.

I HAVE the honour to acknowledge the receipt of the despatches,* noted in the margin (which need be no longer regarded as confi- dential), in which you deal with the question of the High Commissioner, Conf., Jan. 20. adoption of sterling rates of salary in the Federated 22. Malay States, and submit a scheme of sterling 22. salaries. Mar. 11.

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2. Much of what I have said in my despatch of even datet on the similar scheme for the Straits Settlements applies equally to the case of the Federated Malay States. I wish, however, to emphasise my decision that Government should not exercise any discrimination among officers, but that all officers who hold posts to which sterling salaries will be eventually attached shall be allowed a free option of coming under the sterling scheme or continuing to receive salaries fixed in dollars.

3. In my Straits Settlements despatch, No. 77, of the 1st March, 1901 (para- graph 12), I suggested that the scale of salaries adopted in the Federated Malay States should be somewhat lower than that for the Colony, in consideration of the fact that all officers in the Federated Malay States enjoy free quarters. I appreciate, however, the force of the arguments against this view which are set out in paragraphs 3, 4 of your despatch of the 20th January;§ and I am prepared to waive my suggestion.

4. The adoption in the Federated Malay States of a scale of sterling salaries generally equal to those proposed for the Colony must, of course, involve very consider- able expenditure; and from Mr. Eckhardt's memorandum enclosed in your despatch of 11th March, it seems that the average annual increase is likely to exceed $250,000, or about one and a half per cent. of the total revenue of the four States. The Federated Malay States, however, are at least as able as the Colony to bear increased expenditure, and having in mind the considerations put forward in paragraph 8 of my Straits Settlements despatch of even date,†I am prepared to agree generally to the rates embodied in your scheme, subject to the modifications suggested below.

5. I am disposed to think that a preferable arrangement to your proposal in regard to the salary of the Resident-General would be to fix the salary at £2,000 a year, and to give him an Entertainment Allowance of $2,400 per annum.

It seems

to me that this course is preferable to granting the Entertainment Allowance to the locum tenens only, as you propose.

I have considered your proposal to make the office of Resident-General tenable for a term of five years, and to include it in the list of Colonial Governors. As at present advised and subject to any further observations you may wish to make, I am unwilling to make this change. I can see no advantage in the former course; and to adopt the latter would, perhaps, give countenance to a claim on the part of some future Resident-General to a greater degree of independence of the High Commissioner than is now enjoyed, and than, in my opinion, should be accorded.

6. I see no objection to your proposals as to the Residents; and I accept the classification scheme for the cadet service, and the suggested salaries with the excep- tion of the Legal Adviser, for which post I am inclined to think that a salary of £1,200 per annum would be sufficient. I agree to the proposal made in your despatch of 22nd January last as to the salary of the Secretary to the Resident-General, and that post may be offered to Mr. Wise, on a salary of £1,020 a year. Should he not be prepared to accept a sterling salary, the offer must be reconsidered.

•

7. The salary of a passed cadet has been fixed at £300 per annum, rising to £350 after three years' service in that grade; and the salary allotted to passed cadets in the scheme should be altered accordingly. I would, moreover, point out that a passed cadet would lose by accepting one of the six "additional appointments" open

‡ No. 12.

• No. 49 and 57, and 6987 and 6888: not printed.

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No. 49.

† No. 67.

6887 not printed.

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