2
informed earlier of the existence of these irregularities, seeing that the evidence shows that they had been suspected for some time.
The Committee, therefore, finds that malpractices have been committed in dedging to the damage of the Chinese Government, but is of opinion that to dredge 250,000 cubic yards free of charge will more than compensate for this damage. This, it considers, should be accepted and the incident closed. It recommends that the Legations at Peking and the Viceroy of Nanking be advised to this effect, and that this finding be published in the press.
PELHAM L. WARREN, Chairman.
(Signed)
Inclosure 3 in No. 1.
Memorandum for his Excellency Tuan Fang.
AS instructed in your Excellency's despatches received on the 12th August and the 23rd August last, I have, in conjunction with the Shanghae Superintendent of Customs, Tsai, inquired into the alleged falsification of the Whangpoo Conservancy hopper barge Returns, &c., with the following results, after fifteen days of Court sittings-
1. It is evident that from January last, when night dredging was in operation, the East Asiatic Dredging Company's Inspectors, Altes and Ramsteig, have been in the habit of altering figures in the hopper barge registers with the object of defrauding the Conservancy Board; also they have been guilty of offering "barge money
" to the overseers of the Conservancy dredging work.
2. The Conservancy Board has employed nine Overseers for barge duty, seven being of British nationality, one of Norwegian, and one of Dutch, one of whom, Mills, a British subject, admits having received "barge money," whilst the others have declared on oath before their respective Consuls that they have not accepted a cash.
3. After mature consideration M. de Rijke, the Board's Engineer-in-chief, is of opinion that the number of barges returned in excess as a result of the Dredging Company's Overseers' false declarations cannot exceed 500 at the very outside.
4. He declares Mr. Ku Hung-ming's estimate of 40,000 taels per month as the loss sustained by the Conservancy Board as a result of the falsification as entirely wide of the mark.
5. The East Asiatic Dredging Company admit the wrong-doings of their Overseers in the matter of falsifying returns and offering barge money to the Conservancy Overseers, and, whilst tendering apologies, are anxious to make full
amends,
6. M. de Rijke, the Engineer-in-chief, is of opinion that the contractors should be severely punished for the wrong-doings of their subordinates, and proposes, therefore, that they be required to dredge, free of charge, 500,000 cubic yards of mud, equalling 3,000 barge loads. The expense of doing this he estimates at 150,000 taels.
7. The East Asiatic Dredging Company, whilst of opinion that M. de Rijke's terms are very severe, yet agree to accept the same.
8. Further dishonest practices in connection with the loading and reporting of hopper barges will be impossible, it is considered, since dredging by night has now been discontinued.
9. Of the Conservancy Board Overseers it is proposed to dismiss Mills at once, leaving the others to be dealt with later if the fact that they have received barge money is actually established,
10. The statements, evidence, and memoranda connected with the case—which are very numerous-will be submitted for his Excellency the Viceroy's consideration as soon as they can be translated into Chinese.
H. £. HOBSON.
Shanghae, October 21, 1908.
(Signed)
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