CO129-558-3 Levy on Salaries- petition from Chinese Civil Servants 3-1-1936 - 19-12-1936 — Page 63

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All this is perhaps rather a matter

for the Geographical Department than for the

C.S.D. My reason for mentioning it is that

it has a definite bearing on the question of

the levy, since, as long as drastic measures

of retrenchment or emergency taxation are

threatened, it cannot be held that the

emergency is over and I don't see how the

levy could be removed.

ARACHAND

8/9/36.

The Secretary of State has on more than

one occasion during the last few months made it

clear to the Government of Hongkong that the

sooner the emergency levy on salaries of officials

in the Government Service is abolished the better

will he be satisfied, and one must assume that

the Governor is fully aware of the Secretary of

State's attitude but has nevertheless thought

it his duty to put forward this proposal for

continuing a levy in 1937.

The principal justification for the

imposition of this special tax on Civil Servants

in Hongkong in January 1936 was the very

foundation considerable undermining of the of the

bassed

Budget (bbeed on October 1935), in the last few

weeks of 1935, by the fall in the value of the

Hongkong dollar from the sterling equivalent of

1s. 8d. on which the Budget was based to a figure

of about 1s. 4d. which thereby involved a large

increase (in terms of dollars) of the Government's

sterling commitments.

This crisis took the

Government