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ed to them the average increase was 17.56% in minima and 24.57% in maxima or exclud- ing from the calculation the Sanitary Department in which the increase had been abnormal the percentages were 15.38% in minima and in maxima 23-14%. A careful calculation showed that since 1902 the increase in cost of living including rent amounted for Portu- guese and Indians to 23% and to 29% for Chinese, the higher percentage in the case of the latter being due to the high price of rice and local vegetables, to the larger comparative increase in rentals of Chinese flats as compared with rentals of houses occupied by Portu- guese and Indians and to the adoption by Chinese of European wearing apparel.

In view of the increases granted in 1901, in 1906 and in individual posts since the latter date and in view of the fact that there was no lack of suitable candidates, the Governor was unable to recommend any general increase in the salaries of these officers but he con- sidered desirable an increase in the scales of the three highest grades of the Grading Scheme for the Clerical Service for the reason that the rates of pay of Portuguese Clerks who pre- dominated in those grades compared somewhat unfavourably with the rates paid by some of the leading institutions in the Colony although the duties performed by the Government Officers were no less responsible. He also advised an increase in the number of posts in the grades mentioned. There were 7 posts in the Higher Grade and the average length of service of the incumbents of them was 27 years. In each of the First and Second Grades there were 11 posts and the average length of service of the holders of them was 173 and 20 years respectively.

In view of these facts the Governor recommended that the scales should be altered as follows:

Higher Grade Grade I

Grade II ....

Present Scule.

$2,160-$2,700 by $180" $1,680-$2,040 by $120" .$1,320-$1,560 by $120"

Proposed Scale. $2,640-$3,000 by $120" $1,920-$2,400 by $120" $1,440-$1,800 by $120*

that service under present scales should count for increments under proposed scales and that the number of posts in Grades I and II be increased to 12 and 15 respectively to give larger scope for promotion.

He also recommended that the minimum salary of Grade VI ($240) in the case of clerks be increased to $360 as it was difficult to obtain suitable candidates at the lower rate. The excess on the Estimates for 1913 would amount to $10,028. Promotion to Grade II should be made conditional on the passing of a senior clerical test examination and promotion from grade to grade in the lower grades on the passing of a junior clerical test examination.

Mr. Harcourt in his reply dated 8th February, 1913, approved the above proposals.

14.- The Senior Clerk, Audit. Department.

as he

In a despatch under date 13th December, 1912, the Governor dealt with the case of Mr. Heathcote. He was not prepared to recommend an increase of salary but suggested that if the scale for Higher Grade Clerks were raised to $2,640 to $3,000 by $120 had recommended, the emoluments of Mr. Heathcote's post, if filled by an officer domiciled in a gold-using country, should be £264-£300 by £12. Mr. Harcourt in a despatch under date 8th February, 1913, approved the above proposal.

15.-Assistant Masters, Queen's College.

In view of the recent increase in the number of senior posts and the extra income which these Masters were permitted to earn, the Governor was unable to recommend any increase of salary in view of the recommendation made for alteration in the rate of exchange for payment of sterling salaries.

2nd April, 1913.

F. H. MAY,

Governor.