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should be paid in sterling or its equivalent in
local currency. A sterling settlement would
mean absolute finality to a question which
otherwise may be raised from time to time so
long as the relative values of gold and silver
continue to vary".
Mr. Chamberlain accepted this advice,
and also communicated to the Governor of Hong
Kong his decision that if the change to sterling
salaries in respect of European officers were
made in Malaya, it should be made also on
similar lines in Hong Kong. Accordingly, in
1902 a scheme of sterling salaries was approved
and introduced for European officers in Hong
Kong. The
pros and cons of salaries expressed
in sterling or local silver currencies were
set out in 1919 in the Report of the Salaries
Commission in Malaya, as far as Europeans are
concerned, and the following extract from their
Report is reproduced here:-
325. "Now the result of the payment in
dollars of an employé, whose services are expressed as being remunerated in sterling, can well be understood by the following simple illustration the figures for which are for the sake of clarity not actual but assumed.
An officer is appointed to a post in Hongkong the salary of which is expressed as being £1,200 per annum; he is paid, however, in dollars; at the date of his appointment the sterling value of the dollar is 4/- and he consequently receives $6,000 in the year; five years later the dollar has sunk to 3/- and he receives $8,000; after a further five years the dollar has still further declined to 2/- and he receives $12,000 per annum; after a similar period the dollar is again 4/- and he once more receives $6,000 per annum.
The effect of this is that when the dollar is low in value the employé is locally much better off than when the dollar is high; and his pecuniary position,
although
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