CO129-558-3 Levy on Salaries- petition from Chinese Civil Servants 3-1-1936 - 19-12-1936 — Page 255

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7.

6.

The position of the dollar-paid officers has now to

be considered. In their case the arguments set out in paragraph

2 do not apply. There is nevertheless sone reason for calling

upon them to bear a heavier direct cut than the Sterling Staff

in that the Salaries Report (copy attached as Annexe ¤, see

paragraph 14) gave them a 20 increase in basic salaries while the Sterling Staff, (see paragraph 11 ibid), only received a

15 addition, the High Cost of Living Allowance (paragraph 12)

having never in fact been paid.

At the same time account must be taken of the fact

that for dollar officers as well as sterling officers the cost

of living will rise with the fall in the exchange value of the

Hong Kong dollar. It is therefore sugested that for dollar

officers the "Alternative Scheme" shewn at the foot of Annexe B

be adopted. It will be seen that taken over-all this scheme

inflicts a cut of 4.2 as against a cut of 4.16′ for sterling

officers.

8.

The combined effect of the schemes now proposed is estimated to produce a saving of $931,475 +$212,000 - $1,143.475

a sua rather less than the amount of the additional taxation

imposed through the "conventioml" dollar. A more or less

equal burden is therefore borne by the public and its servants,

With all these sacrifices however there will remain at the end

of 1936 a deficit of $1,612,828 of which $500,000 can be met

by a raid on the Trade Loan and the rest must come from surplus

balances which will thus be reduced at the end of 1936 to

$8,135,927.

It must be borne in mind, however, that by that time a

number of our most expensive Public forka will either be coa-

pleted or nearing completion and our commitments for 1937 will

therefore be comparatively small. At the same time, i.c. in

1937 we may hope to be in a position to realise some of the

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