CO129-558-3 Levy on Salaries- petition from Chinese Civil Servants 3-1-1936 - 19-12-1936 — Page 65

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The only comfort which the Governor offers is

that he is bold enough to hope that the new

regime in South China (where the central

government of China appears now to have come

to terms with the two recalcitrant provinces

of Kwangtung and Kwangsi) may lead to an

expansion in trade and consequently to better

times in Hongkong, in which event the withdrawal

of the levy will of course receive consideration.

The Governor says that at the first

reading of the Supply Bill on the 16th of

September the Colonial Secretary will be

instructed to refer to the proposed reimposition

of the salary levy in 1937 and the accompanying

decision to pay sterling salaries at not more

than $16 to the £ (18.3d. = $1) unless the

Secretary of State telegraphs contrary

instructions in the course of the next few days.

It is clear that the Governor has given

a great deal of thought and anxious attention to

the financial problem in Hongkong, and I do not

think it would either be fair to him or, indeed,

that it is necessary, to intervene at this stage.

If there is any room for a more optimistic view

before 1937 opens we can, I think, rely on the

Governor advising the Secretary of State

accordingly, and in any case there would be no

harm in asking him to make a special report in

December before final decisions are reached as

to the continuance of the levy and the rates,

if any, which must be imposed. I don't think

we need comment on the decision to pay sterling

salaries at a rate not exceeding an exchange

value of 1s.3d.

$1..

H