CO129-558-3 Levy on Salaries- petition from Chinese Civil Servants 3-1-1936 - 19-12-1936 — Page 56

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closely to the current market rate. It is also

proposed to reduce the rate of levy/perhaps by 20%,

in which case the resultant saving would be in the

neighbourhood of $450,000. This would have the

double disadvantage, I think, of misusing the

emergency measure of a salary levy without making a

proportionately very serious contribution to the

financial stability of the Colony.

follows:-

The position may perhaps be summarised as

1. It is very doubtful whether the imposition

of the 1936 levy would have been sanctioned had the

improved financial outturn of 1936 (as here

estimated) been foreseen.

2. In spite of this despatch, and in the light

the of the falsification of earlier local anticipation of events in 1936, we cannot take for granted that 1937 will be so bad a year as the Governor fears.

The Governor has clearly been given to understand, in the final paragraph of No. 19, that he should not count on the levy for 1937, and hut

3.

subsequent correspondence gives the impression that this point has not been fully appreciated in

Hong Kong. (See Mr. Jeffries' minute of 5.6.36.

hereon.)

4. To allow the re-imposition of the levy in the present circumstances would, since no marked

improvement in Hong Kong finance.s can be reckoned

on