CO129-461 - Governor Sir Stubbs - 1920 [5-7] — Page 257

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Copy.

Easlim 132 kv 23.

CONFIDENTIAL.

CO

43495

RESP Bro1 SEP 20

Government House,

Hongkong, 19th July, 1920.

253

My Lord,

I have the honour to acknowledge the receipt

of Your Lordehis's talegram of the 16th June, 1920, regarding the merlion of the grant of a local allowance in counter- action of the fluctusțione in exchange.

2.

<

Then the members of the Palaries Commission recommended the adoption of an exchange rate of 2/- to the X1, it ie doubtful whether ther realised the full effect of this | departure from the former arrangement, whereby salaries were paid as to 4/5thm at 18.94. and ae to 1/6th at the rate of the day. When the deller is worth 48.8d., 5100 becomes 81,000 under either method of calculation, out as the exchange value of the dollar fells the former syster becomes increasingly advantageous. For example, with exchange et 3/-, that systen gives 71,048 for £100, and 1,114 for "100 when exchange is at. 2/-, an advantage in the one case of 5 and in the other of 11 per centur.

3.

The Commissionere estimated that the cost of living had incressed by at leset 30% since the beginning of the war, and in the your that has elapsed it is probable that that cost hea advanced by quite further 10 per centos. Prices would undoubtedly bere advanced with further, so they have done in other parts of the world, but for the counteracting factor of the riss in the value of silver; and as the exchange price WEIGHT HONOURABLE

VISCOUNT MILNER, G.C.B.,

60.