CO129-558-3 Levy on Salaries- petition from Chinese Civil Servants 3-1-1936 - 19-12-1936 — Page 34

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changes in the arrangements have had to be made

owing to the very rapid and wide fluctuations which

t

have taken place. For the period preceding 1931

an elaborate sliding scale of exchange compensation

(i.e.

payment in dollars of sterling salaries at

tificifal

rates of exchange) had been in operation

for a year or two.

At the beginning of 1931 the

dollar began to fall rapidly from 2s. or over down

to little over ls. The Government had to protect

itself against this prospect of a very heavy increase one half of in their sterling salaries bill by deciding that, an

officer's sterling salary should be paid locally at

ls. 6d. to the dollar and the other half at the

current rate of exchange. When the petitioners

say that this amounted to a considerable cut on

their salaries what they really mean is that they

did not receive the full benefit of the cheaper

dollar (which was in effect an entirely unearned

increment). When, in the following year, the

dollar began to rise again, a new system was

introduced whereby sterling salaries were paid

Current

locally in dollars at the rate of exchange, subject

to limits

ls. and 2s. $1. Last year the

dollar rose nearly to 2s. 6d. with a result that

sterling officers were receiving fewer and fewer

dollars for their pound sterling and they were

D worst

rise

saved from the effects of this by the limiting

figure of 2s. at which point their sacrifices caine

to an end. The present crisis has arisen from the

sudden drop in silver values (and so the exchange

silver polity value of the dollar) due to the aetion of the

United States Government and the consequent

protective steps taken first by the Chinese and then

by the Hong Kong Government, which has resulted in

China