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not particularly dissatisfied: they are regularly paid, and though the payment is mostly in Canton notes, the soldiers can get full value for them.
7.
Ch'an King-wa, an ex-Magistrate under the Manchu rule, is in charge of the Police Department. He lost his appointment under the Manchus owing to his ruthless cruelty. His old methods seem still to cling to him. Trials are very rapid or are dispensed with altogether. Executions even for trivial offences take place at the rate of 20 a day. His action has dis-
-gusted the population.
8.
9.
The Government has foolishly embarked on schemes of Education and Sanitary Reform which ought to wait for
a full treasury and a settled Government. There seems to be a
feverish anxiety to give evidence of a new civilisation. There is
an utter absence of judgment in choosing lines of action and in
thinking out the consequences of pursuing those selected.
The only other Civil Department that I have
authentic information about is the Treasury, which has been managed very badly. It was practically emptied in one way or
another during the Revolution and the supplies sent from Chinese
abroad the Chinese Community of Hongkong supplied between
$2,000,000 and $3,000,000 has all been spent (or embezzled)
without any account having been kept. Following this the per-
-nicious device was resorted to of issuing notes without any
reserve to secure them. I attach a Memorandum prepared for me by Mr. N. J. Stabb, Chief Manager of the Hongkong and Shanghai Bank- -ing Corporation, which gives the history of the issue of these and other notes which preceded them. The result of the suicidal action adopted by the Cantonese Authorities is that the notes have quite recently been at a discount of between 30% and 40% and that the Government are at their wits ends how to restore confidence in the note issue. My information is that in addition to the authorised issue of $16,000,000 the then Treasurer one Li Yuk-
Enclosure!