CO129-456 - Governor Sir Stubbs - 1919 [10-12] — Page 370

Fidder

A.

Rate of Exchange.

(1)

Present system:-

sterling:

salaries fixed in

351

exchanged for payment in the Colony as

to 1 at average current rate for month and as to

at 1/9.

499

Balaries

(2) Recommended by Commission:

fixed in sterling: payment in Colony at 2 shillings

the dollar.

salaries

(3) Recommended by Sir E.Stubbs:

fixed in dollars, but for purposes of leave pay and

calculation of pension an officer's salary should

be taken as the sterling equivalent of his dollar

salary converted at 2 shillings the dollar.

Sir E.Stubba states that his proposal

amounts to practically the same as (2), but seems

to him more satisfactory as it gets rid of an arti-

ficiality.

(see 40734/12)

Personally I don't see much to choose

between the two: if this system gets rid of one

artificiality it introduces another: in fact, any

system which does away with the current rate of ex-

change 18 artificial: and it would be impracticable

to appoint European officers to Hong Kong and leave

them to the tender mercy of the current rate of ex-

change, whether when serving in the Colony when the

pay is fixed in sterling) or when on leave or pension

(when the pay is fixed in dollars).

The present system is based on the

argument that even a bachelor spends about 20% of

his salary on payments depending on the rate of sterling

e.g. insurance, passages, and imported products. An

officer is likely always to remit a certain amount of

his salary home, and that it is fair to give him the

current rate for that amount otherwise he may profit

at the expense of the Government

•

On

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