The following letter was then read in court-!

Public Works Department,

8th January, 1883.

SIR, I have the honour to transmit to you the enclosed copy of a letter from the editor of the Hongkong Telegraph in reply to a request from me that he should discontinue sending his paper to this office.

I find that the Hongkong Telegraph is supplied to me under the authority of O. S. O. 1,724 of 1881, and I have therefore to request you, if you think it necessary, to be good enough to countermand the order for the paper.

Apart from the fact that the subscription to this scurrilous paper is a waste of public money, I have grave objections to allowing it inside my office on the grounds of decency and decorum, and I cannot but think that some responsibility attaches to the Government for the pecuniary support which it renders month after month to a convicted criminal in his abandoned career.—I have, &c.,

(34.) J. M. PRICE, Surveyor-General.

The letter enclosed was the one given above by the defendant, declining to discontinue supplying the paper,

Stewart M. Fraser-Smith was then called and said he was manager and sub-editor of the Hongkong Telegraph, and in that capacity all copy for the paper passed through his hands, and he knew the names of the writers of the whole of it. The copy for the paragraph containing the alleged libel passed through his hands, and it was neither written nor dictated by the defendant, who was not in the colony at the time it was published.

He was acquainted with the circumstances which led to the writing of the paragraph; they were as follow :-A gentleman connected with the Surveyor-General's Office called in at the office of the Hongkong Telegraph one morning at about nine o'clock. Amongst other things this person and the defendant were speaking of the common events in the Colony, and touching the Tytam Waterworks his brother casually remarked to him, "You will doubtless make a good thing out of these waterworks." The gentleman replied "Oh I shall not be so much amiss, but I don't think I shall do so much either, as we are so very smartly looked after now, and Mr. Price likes to keep all the good things to his own cheek." It was that conversation which led to the writing and publishing of this paragraph.

Witness had frequently had conversations with members of the Surveyor-General's Department about alleged irregularities; they were almost daily, for it was his business to meet people and sound them. He recollected the article of the 26th May 1882. It was written under the following circumstances :-A member of the Surveyor-General's Department called and asked him to interest himself by the paper to get certain outstanding accounts due to contractors to that department paid; he suggested that he (witness) should go round to ten or a dozen of the contractors and make a bargain with them that if he succeeded in getting in their accounts within a fortnight or some such time, they should pay him a percentage upon the amount to recoup him for his trouble. Witness said he would not undertake the work on those terms, but he would do it for nothing if the contractors would satisfy him that he was doing it upon a sure foundation.

The person took him to two of the contractors, who satisfied him that they had been waiting six or eight months for the payment of their accounts, and so he went no farther, but drew up a scheme for an article which the defendant wrote.

The next forenoon the person told witness the Acting Surveyor-General had been inquiring in the department as to who had given the information, and asked him not to disclose his source of information.

The next day this person told witness that Mr. Marsh, then Administrator, had written down to Mr. Bowdler to inquire whether the allegations contained in the paragraph were true, and that the accounts were then paid "chop-chop."

The contractors and the Surveyor-General's man also told him that the reason the contractors had been kept waiting for their money was because they could not afford to give a gratuity to the man in charge of the pay department, and they were put off with flimsy excuses from day to day.

He did not recollect the name of the contractor who told him this, but he knew him, and had seen him since this matter, when he chin-chinned witness, and told him he was his very good friend for getting him his money; he also invited witness to go to his house, and get a box of cigars.

Witness was about a good deal among the Chinese and European members of the community, among all of whom it was common talk that squeezing and bribery did exist in the Surveyor-General's Department.

He had very often heard it said, and he had good reasons for believing it existed.

Cross-examined by Mr. Francis-Witness was sub-editor and manager to the Hongkong Telegraph, and he also did some proof reading, acted as share reporter, and general collector of all the tittle-tattle in the colony.

He was a good deal in the streets, but he was in the habit of being absent from the office from 10 a.m. to six p.m.

The conversation with the gentleman from the Surveyor-General's Department occupied about a quarter of an hour; he came to see witness, but the defendant heard all the conversation which had been detailed; in fact it arose on his brother's question.

It was done quite naturally, he would not say promiscuously.

Mr. Francis-Who was the gentleman from the Surveyor-General's Department?

Witness-That I decline to say.

Mr. Francis-That name must be given,

His Lordship-You must give the name now you have gone so far.

Witness-It was Mr. Edward Rose, foreman of the Waterworks.

Mr. Francis-Had Mr. Rose anything in the world to do with the Tytam Waterworks?

Witness-I don't know; excepting perhaps with the water.

That would be after it reached here?-Yes. But with the works in execution at Tytam, had he anything to do, you who know all the ins and outs of the Government Departments?

I do not know all the ins and outs.

Do you mean to say Mr. Rose made use of the words you have given ?--Yes.

Will you oblige me with some of the names of the gentlemen in the Surveyor-General's Department with whom you have had conversations respecting the bribery in the department?

Witness gave several names of members of the department, but denied having said he had received any information from them.

Mr. Francis appealed to his Lordship's notes.

His Lordship said he did not think the witness had said he had received any information.

Mr. Francis-Who was the person who came to you to induce you to call attention to the fact that the contractors had not been paid?

Witness-Mr. Rose was the person.

Did you ever take any trouble to inquire among the heads of departments as to the truth of these reports which you heard?

Which of them?

To the Surveyor-General.

Witness-I did not think that necessary because I had got sufficient information from the contractor's own mouth.

Can you give me the names of any of the gentlemen who have given you information as to squeezing in the Surveyor-General's Department?

I did not say any one else had given me information of squeezing; I only said I had had conversation with them.

Will you give me the names of some of those who have told you about squeezes?

—Yes I can mention a dozen, or 30 or 40,

Conversation with nearly every one in the colony I suppose.

Will you give us the names of two or three in connection with the Surveyor-General's Department?

-I did not say I received any information of squeezes from anyone in the department.

Well, let us have two or three other names.

Witness-Mr. Thevenin, the wine merchant, for one.

Did he give you any information?

-I don't say information; we had some conversation.

I don't see what you wish me to tell, but I will endeavour to answer your questions.

We were comparing the salaries of the members of the Surveyor-General's Department, and wondering how a person with $60 or $65 a month managed to pay $30 a month for rent, keep a family of seven or eight, and having always from common beer to the best champagne in his house, and do this without a margin behind.

That was the substance of it.

It was a problem in social economy we were trying to work out.

And did you arrive at a satisfactory conclusion according to your own lights?

-We arrived at the conclusion that the person did not pay for the things he got, otherwise he had means of getting money which were not legitimate.

Have you any recollection of the date of this conversation with Mr. Rose about the Surveyor-General keeping all the good things to himself?

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