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(ii) Mr. WODEHOUSE, sometime Acting Treasurer, for neglect in not causing the Rent Rolls of 1887, 1888 and 1889 to be made up at the proper time.
(iii) Mr. MAY, who acted for a short time as Treasurer, for similar neglect,
to which his attention was drawn by the Auditor, Mr. NICOLLE. (iv) Mr. MITCHELL-INNES, for not causing the Rent Rolls to be made up although his attention was similarly called to the matter by Mr. NICOLLE; for failing to make himself acquainted with the manner in which public business was being conducted in his Department, and for misreading and not enforcing the Instructions laid down for the conduct of business in his Office.
(v) Mr. NICOLLE, for not reporting in writing to the Government the neglect of duty on the part of the Treasurer and Acting Treasurer, which prevented him from duly discharging his duties as Auditor. 3. The officer to whom the heaviest amount of blame must be attributed is unquestionably Mr. MITCHELL-INNES; and I regret to observe that he has not improved his position by the tone and temper of his defence. He, no doubt, mis- apprehended the relative duties of a Treasurer and an Auditor; but in considering the weight to be attached to this excuse, it must be borne in mind that, upon his appointment as Treasurer, he received special instruction as to the responsibilities and duties of his office, namely those conveyed in my predecessor's despatch No. 194 of the 11th of September, 1890; and also that in the same year Financial Instructions for Hong Kong were drawn up, which, if they had been followed with even ordinary intelligence, would have prevented the later defalcations, or at least have led to their earlier detection. Although Mr. MITCHELL-INNES had, prior to being appointed Treasurer, no special financial experience, an officer of his standing and experience must be taken to have been well aware that it is a Treasurer's duty to close and balance his books at the end of the year, and that it is the duty of every head of a department to be thoroughly acquainted with the manner in which the business of his Office is conducted, and to satisfy himself by constant personal investigation that his Staff conform in all respects to the rules and regulations. Further, it might have been expected that a gentleman who after a comparatively short service had been promoted to a new and important position, would have sought to justify the exceptional confidence reposed in him by setting himself to master and improve the administration of his Department, instead of acquiescing in arrangements made by his predecessors, which, as it happens, have proved to be defective, and assuming that those arrangements were being faithfully observed by his staff.
5. As to the action to be taken in the case, I have to observe that whilst I consider that it would be harsh to require Mr. MITCHELL-INNES to make good to the Colonial Government the full amount of the defalcation which occurred during hs icontrol of the Treasury, I must mark my sense of his shortcomings, by direct- ing that, as a condition of his remaining in the public service, he be required to pay into the Colonial Treasury a fine of $1,000 which may, if he prefers it, be paid in such instalments as you may think reasonable. It will also be your duty to convey to him a severe censure from me on his shortcomings in the conduct of his Department and his neglect to comply with the requirements of the Auditor.
6. Further, as he has not justified his selection for the headship of a depart- ment in Hong Kong, it will be necessary for me to arrange, if possible, for his transfer to another Colony. But such transfer will not mean a promotion, but I trust that elsewhere and in the discharge of different duties he will gain the con- fidence of the Government under which he serves, and thus possibly build up a claim to promotion hereafter.
7. Mr. WODEHOUSE and Mr. MAY must also be censured, but less severely for their respective shares in the responsibility for what happened. I am glad, how- ever, to add that I regard the blame which attaches to Mr. MAY as comparatively slight, and I recognise that he showed zeal and capacity in other respects during his short tenure of the office of Treasurer.
8. As regards Mr. NICOLLE's share in the matter, I shall not anticipate the judgment of the Comptroller and Auditor General. It must, however, be recog- nised that his position was a difficult one, and that as a new comer to the Colony, called upon to introduce and carry out a system to which there was strong local hostility, it was intelligible that he should have shrunk from what might seem to others a needlessly rigid interpretation of his duties; and, after all, it was to him that the discovery of the frauds was ultimately duc.