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the obvious desirability of having the support rather then the
opposition of the Service in any retrenchment of their emoluments,
I agreed that the allowances should go untouched for another year
be and a continuance of a falary levy recommended. I also told the
meeting that in order to achieve some measure of fimlity in the
matter of exchange and at the same time to facilitate and simplify
the computation of pay-sheets in the Treasury I should recommend
the fixing of the maximum number of dollars payable to the pound sterling at sixteen, i.e. at 1- 19/34. This is also the figure
at which sterling commitments have been calculated in preparing
the Estimates, and i have allowed it to stand, although the
exchange today is somewhat lower, for convenience in calculation,
and to avoid repercussions which might ensue were a lower rate to
be adopted.
In the light of all the circumstances I hope therefore that you will agree to the imposition of a levy for 1937 together with a $1 18//3d exchange limit on the sterling saluries.
revised scale for the levy is still under consideration, but
it should not exceed the current levy and may, I hope, be 20
less. The amount that would be so saved is between a quarter and
half a million dollars, and it should preclude the likelihood of our surplus balences at the end of 1937 falling below the eight million mark. If, as I am bold to hope, the new régime in Kwangtung leads to an expansion in trade and consequently to better times in liong Kong, the withdrawal of the levy and the raising of urban rates, now standing at 17 of assessed annual value as against
inagpore's 24 vill of course receive consideration.
10.
The Supply Bill is down for its first reading on Septemeber 16th, and the object of this air mail despatch is to furnish you with a brief forecast of how the Budget will work out. I should like the acting Colonial Secretary in introducing it to mention the proposed re-imposition of a salary levy and the
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