CO129-533-13 Salaries- conversion rate of sterling 30-1-1931 - 21-1-1932 — Page 29

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H.K officers in England on a sterling

basis. But clearly, with a currency which

will fluctuate in exchange value owing to

circumstances entirely outside the control

of the H K Govt:,a pure sterling basis will

not work. If the dollar goes very high,

the Govt: will, as a matter of practical

necessity, have to come to the aid of its

officials; if the dollar goes to very low, these

officials will be getting more than they should

get,or than the Govt: can afford. In the latter

case, practical necessity--and public criticism--

will force the Govt: to take some action to

redress the balance.

4. In the circumstances, surely the soundest

plan would be to have the problem objectively

examined, in advance of these untoward

happenings, and to regulate matters by a sliding

scale? For that, full information would clearly

be necessary; and the Govt: could perhaps hardly

omit from their consideration of the problem

the case of European officers, not recruited in

England, who are paid on a pure dollar basis.

I understand that H K officials have never,in

fact, been on a pure sterling basis; they have

always been protected at the upper end; and

recently the Govt: has been protected at the

lower end. But the protection has been determined

on an arbitrary basis, to meet sudden emergencies,

and the decisions have--as here--had to be taken

hurriedly, on insufficient information.

My idea would be to have an impartial authority

(one person, or a small commission, unconnected

if possible with H K ) to go into the whole

question,and to settle it, in advance.