Sessional_Paper_1907 — Page 989

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1st March, 1907.

OFFICER ADMINISTERING THE GOVERNMENT TO SECRETARY OF STATE.

Your despatch No. 57 of 28th March. The allowance offered would not satisfy the Service and I propose to suspend action until I shall have received a reply to Sir M. NATHAN'S despatch No. 37 of the 8th March.

HONGKONG.

No. 72.

DOWNING STREET,

16th April, 1907.

SIR-I have the honour to, acknowledge the receipt of your despatch No. 37 of the 8th of March forwarding memorials of Government officers with regard to the salaries of the Hongkong Service as affected by the high exchange value of the dollar.

2. I propose to defer replying to your despatch until I have had the opportunity of discussing the matter with you on your arrival here.

Governor

Sir M. NATHAN, K.C.M.G., Se.. jc.,

HONGKONG.

No. 122.

fe.

I have, &c.,

ELGIN.

DOWNING STREET,

11th June, 1907.

SIR, I have the honour to acknowledge the receipt of your telegram of the 1st of May, in which you informed me that the proposals made in my despatch No. 57 of the 28th of March for the grant of a local allowance would not satisfy the service, and added that you proposed to defer action in anticipation of my reply to the Governor's despatch No. 37 of the 8th of March. I had already replied to that despatch to the effect that I would discuss the matter with Sir M. NATHAN on his arrival in this country.

2. I have now ascertained Sir M. NATHAN's views, and, subject to the consent of the Legislative Council, I am prepared to approve the following arrangement:-

Officers drawing sterling salaries, or dollar salaries with double exchange compen- sation, will be paid their salaries, when in the Colony, at the rate of 2/- to the dollar, so long as the exchange value of the dollar is at or above that figure.

When the exchange value of the dollar is below 2/- these salaries will be paid, as at present, at a rate of exchange fixed monthly by the Government and based on the average exchange value of the dollar during the preceding month. Officers whose salaries are fixed in sterling will draw leave pay and pension on the

basis of the fixed sterling salary.

Officers drawing double exchange compensation will continue to draw leave pay and pension on the basis of their nominal dollar salaries at the privileged rates of exchange to which they are entitled.

3. I have, therefore, to request that you will place these proposals before the Legislative Council. If the Council approves the suggested arrangement, you are authorised to put it in force at once with effect from the 1st of January last.

The Officer Administering the Government of

I have, &c.,

HONGKONG.

ELGIN.