employed for converting sterling salaries into dollars for the purposes of his report and at which the Hong Kong Government has in the past paid sterling salaries locally.
It seems to us that this rate is fair to the officer and convenient to Governant. The officer knows what his leave pay and pension will be in sterling and the Government has a fixed and convenient rate of exchange for purpose of estimates.
As you are aware, the Hong Kong dollar is and has been fixed de facto at 1/3 since before the world war and the dollar is definitely tied to the pound as all the currency reserves are in sterling.
At present both in Malaya and Hong Kong there is an excessive spread between the buying and selling rates of local currency which we are endeavour- ing to have narrowed with an ideal par of 2/4 and
respectively. desire. for the purpose under reference to avoid any question or buying and selling rates and to adopt a fixed and correct figure as was done in Malaya. The alternative would be to quote salaries in sterling (for leave and pension purposes) as well as in dollars, but this would be contrary to the spirit of the Commission's recommendations and there are obvious disadvantages.
I understand that Butters mentioned this matter to you and that you wished to have the proposal in writing for reference to the other Treasury Departments concerned. Je should be grateful if we could have an early reply as Hong Kong desires the question of salaries revision to be finalised as soon as possible.
Yours sincerely,
Syd N. C. Rayle
N.C.
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