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PUBLIC RECORD OFFICE

Reference :-

TPIEC.O. 882

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

6 PUBLIC RECORD OFFICE, LONDON

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5. I approve the other recommendations contained in your despatch under acknowledgment, and I concur in your view that in doubtful cases, which have not been specially provided for in this correspondence, the proper criterion is whether the officer in receipt of the allowance would draw any part of it while on leave of absence.

I have, &c.,

J. CHAMBERLAIN.

2398

No. 46.

HONG KONG.

GOVERNOR SIR II. A. BLAKE to MR. CHAMBERLAIN. (Received January 20, 1902.)

(Confidential.)

SIR,

[Answered by No. 66,]

Government House, Hong Kong, December 11, 1901. WITH reference to your confidential despatch of the 15th August last,* and in continuation of my confidential despatch of the 25th October,† I have the honour to inform you that in accordance with your instructions I have caused a scheme of salaries to be drawn up on the lines indicated by you, and I now submit that scheme, accompanied by the following general remarks for your consideration.

2. I observe that the new scheme of salaries must be regarded as applying only to Officers entering the Service after August, 1901. If your decision on this point is final, I must ask for instructions as to whether or not the promotion of an Officer from one of the Eastern Colonies to another will be taken to involve the acceptance of a Sterling salary. All members of the Cadet Class, at least, are made clearly to under- stand, before they leave England, that they are liable at any time to transference from one of the Eastern Colonies to another, and that for such purposes the Civil Services of those Colonies are one. The question, therefore, arises as to whether a member of the Hong Kong Service, for example, who has drawn in this Colony a dollar salary with Exchange Compensation, would begin, on promotion or transfer to the Straits Settle- ments, to draw a Sterling salary.

3. I gather from your correspondence with the Straits Settlements that the Officer Administering that Government is of opinion either that all Officers now in the service should have the option of accepting a Sterling salary or that the acceptance of such a Sterling salary should be a necessary condition of promotion. In your despatch, No. 77, of the 1st March, to the Straits Settlements (paragraph 5) you expressed the opinion that all individual members of the Service should have the option of accepting or declining the new Sterling rates; but in your later despatches to that Government, and in that to which I have now the honour to reply, your instructions are that the scheme of Sterling salaries is to apply only to Officers entering the Service after the date of your despatch* (August 15th, 1901). As I understand your instructions, therefore, no Officer now in the Service is to be allowed under any eircumstances to exchange his dollar for a Sterling salary. I may mention inci- dentally that the enclosed scheme is such that under its provisions it does not seem probable that any of the older Officers in the Service would be willing to accept the Sterling salary offered to them, while many of the junior officers would find it t their advantage to do so. At the same time I think it would be advisable to allow all Officers to exercise a choice between their present pay and the proposed Sterling salaries.

4. The points I have referred to are matters upon which I should be glad of a little further elucidation. I would only point out, before leaving this part of the subject, that if no one is to receive a Sterling salary except those who enter the Service in 1901 or later, it is hardly worth while to formulate at present any elaborate scheme of the salaries to be attached to the higher Offices. Several years must elapse before a Cadet who enters the Service in 1901 can become qualified for any of the higher posts in the Colony, and I am not clear as to the practical utility of attaching to an official post a Sterling salary which possibly cannot be drawn for fifteen years to come.

5. With the view of complying with your instructions in the despatch under reference. I appointed a small Committee composed of the Acting Treasurer, and the Acting Puisne Judge, to submit a draft scheme. My remarks on the scheme are based not only on the views of the Committee, but also on my own observation of the con-

+ No. 41.

‡ No. 12.

• No. 32.

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ditions prevailing in Hong Kong, which render expedient a reconsideration of official salaries and a reversion to the original system of Sterling payments.

6. The general principles which have guided the Committee in the preparation of the Scheme may be summarised as follows:-The scheme is designed to include all Offices which would in the ordinary course be held by Europeans appointed from home. It includes members of the Police Force, Hospital Nurses, Warders, Sanitary In- spectors and Overseers, but does not include the clerical staff usually recruited from local sources. Many of the salaries of such posts have recently been considered by an unofficial Committee and have in most cases been increased on that Committee's recommendation,

7. The Supervisors, the Superintendent of the Money Order Office, the Super- intendent of the Registration Branch, the Accountant and Chief Clerk in the Post- Office, have been given Sterling salaries, as hereafter those positions will, in all pro- bability, be filled by European Officers appointed from home.

8. The Classes enumerated in the scheme are, in the main, similar to those pro- posed for the Straits Settlements, and the system of giving triennial increments has been adhered to as far as possible.

9. In the case of European Officers, whose salaries have only very recently been remodelled, owing to the recommendations of the unofficial Salaries Committee, the salaries as recommended by that Committee have been taken as a basis for the pro- posed Sterling salaries, and no great increase is now proposed.

10. I need hardly say that Sterling salaries will be paid in this Colony in the local Dollar Currency The rate of exchange should be based on the rate for the preceding financial year, and should be the mean rate for the year preceding the last 1st of August. This will nullify any difficulties that may arise in this connection in the preparation of the annual Estimates.

11. It will be found on comparing present salaries with the proposed new Sterl- ing rate that in general it would not be to the advantage of Officers who are at present entitled to a 4s. dollar for leave, and a 3s. 8d. dollar for pension payments to accept the proposed rates, while it would generally be to the advantage of Officers who are at present entitled to a 3s. dollar for similar payments.

12. The Sterling sums given in the columns headed" Equivalent Sterling Salary" are the equivalent Sterling salaries for an Officer entering the Service on the present dollar rates of salary with the privilege of drawing the dollar at Three Shillings when in Europe on leave, or on pension. These equivalent salaries thus include con- siderations of leave and pension pay.

13. The Committee has made the following recommendations in points of detail, and they meet with my approval:-

(A) House allowance, estimated value of free quarters, and all other allow- ances, except personal allowances, should no longer count for leave and pension

pay.

(B.) Personal allowances to Officers drawing Sterling salaries should be given in Sterling.

(C.) In some cases, as set forth in the detailed scheme, house allowance should be combined with salary. If an Officer occupies a Government building, a fair rent for such quarters should be paid by him. This, of course, applies only to the officially recognised occupants of Government buildings, not to the Officers who may be the guests of such occupants.

(D.) The contribution of Officers on a Sterling salary to the Widows' and Orphans' Fund should remain at four per cent., and the accounts for these Officers should be kept in Sterling. House and conveyance allowances should no longer contribute a percentage to that Fund. These changes would necessitate an amend- ing Ordinance, but without making the above alterations difficulties would arise in the keeping of accounts and in the calculation of the pensions paid from the fund.

(E) All Officers in the Subordinate Establishment who may join the Govern- ment Service after the 31st December, 1901, and whose salaries are paid in silver, shall, when going on leave or pension to countries having a gold standard, draw their leave and pension pay at the current rate of exchange for the dollar. In other words, the privilege of drawing leave salaries and pensions at fictitious rates should be entirely abolished in respect of Officers who join the Service after the date mentioned.

(F.) Food, light and fuel allowances should be discontinued and merged in зalary.

(G.) No pension should exceed in amount the sum of £1,000 Sterling per annum. 14. Turning to the salaries of individual offices, I have to submit the following

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