CO129-558-8 Revision of salaries 19-8-1936 - 11-2-1937 — Page 97

In existing circumstances, it would

perhaps be better to keep separate the

two questions of general revision of sal- aries and alteration of the currency in

which salaries are expressed.

#lowel

97

31. 1-35

I agree that the time is hardly ripe to

dollar

consider the substitution of

salaries. The

future of Hong Kong currency is still very unsettled.

I think it is the desire of everybody in the Colonial

Office that it should at some time be stabilized on

sterling, but for the time being we are largely

influenced by what happens in China. Chinese

currency, it is true, has been in effect stabilized

on sterling for the last four months, but it might

equally well be described as stabilized on the dollar

or on gold, and nobody knows what the Chinese would

do if there were any considerable variation in the

present exchange relation between sterling and either

the dollar or the gold currencies; nor do we know

what would be decided for Hong Kong if China departed

considerably from its present sterling parity. We

still live in hope, however, that within the next

12 months or so some final solution will be in sight.

If it turns out to be stabilization on sterling, then

will be the time to consider whether to change the

form in which salaries are expressed.

Hong Kong has

got on with salaries expressed in sterling and paid

subject to all sorts of compensation arrangements

for a generation, and can very well continue for a

year or two longer.

So long as the local currency has no fixed

relation to sterling the problem for people recruited

and domiciled in this country is that part of their

expenses