5 D.D. R. Serfell (Jay)
6. Gor.
Desp. 8 Sec
7. D.R. Serpell (Joy) — 1.F.272/187/04
12-2-48.
6-2-487
·23-2-48
Th. Butting
1.
I mentioned over the phone to you the Governor of Hong Kong's despatch No. 8 of 6th February (6). Since receipt of that, Treasury approval of our proposal in (5) has come in and is filed at (7).
2. The Malayan precedent, approved by the Treasury, with the relevant provision in the conditions of appointment" "similar to that made in the case of Malaya, does not, it seems to me, fully provide what the Governor asks for.
3.
n
(a) The Governor asks for a guarantee
of an exchange rate of $16 to the £
sterling. The answer we have agreed with the Treasury covers only the spread between buying and selling rates and is a sufficient answer to the problem only on the assumption, to quote your words, "that the ideal is a par rate of 1/3d. and, as the entire backing of the Exchange Fund is in sterling, to contemplate a variation from that figure in future is not practical politics". The Governor does contemplate the possibility of a variation from that figure. Hence his recommendation for a guaranteed rate of exchange.
(b)
In addition to covering pension and
leave salaries payable outside the Colony, the Governor suggests that the guarantee should extend to sterling remittances made by officers while on duty in the Colony up to a certain proportion of their emoluments.
It may be however that, if the Governor is informed that it has been agreed that the Malayan precedent should be applied to Hong Kong, he may consider this sufficient. I therefore suggest that the attached telegram be sent to him and that meanwhile we take no action on the despatch.
4. I have not sought Treasury approval to the draft telegram before asking your advice, but I suppose we shall have to get this.
27.2.48.
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