COPY.
SECRET
Endl. 1.
Puisne Judge's Chambers,
Supreme Court,
Hong Kong.
16th October, 1941.
S
Sir,
With reference to 1(b) in the first paragraph of the interim report of the Air Raid Precautions Commission of Inquiry submitted to you on 25th September, 1941, I have the honour to inform Your Excellency that in the course of our investigation into allegations of bribery in connection with Air Raid Precautions work, many facts have been brought to light regarding the financial activities of certain Government officers in no way connected with Air Raid Pre- cautions and who, therefore, fall outside the scope of our terms of reference, but in whose regard the Commissioners feel further enquiry should be made.
Not copied 2. The two lists which I enclose herewith for Your Excellency's
information indicate clearly three facts which the Commissioners suggest merit the serious consideration of Government: first, that some Government officers find it convenient to keep current accounts at more than one Bank: second, that several subordinate officers on low salaries have found it possible to save and invest consider- able sums of money; and finally, that numerous officers have bought and sold shares in local undertakings notwithstanding the general prohibition contained in Colonial Regulation No.53. The first is illustrated by the first enclosure which is a list of Government servants who have, or have had, (doubtless for entirely satisfactory reasons in some cases) accounts at more than one Bank; while the second enclosure, showing share transactions which have come to our attention has bearing on the second and third of the facts referred to above.
3. Since closer enquiry into the persons named in these lists was clearly not justified by the terms of our Commission, the lists are naturally very far from complete. They throw no light on the instances which I believe to exist where Government officers have opened accounts at the smaller Chinese banks in the names of un- official Chinese nominees, nor on dealings with exchange brokers or with firms who are not members of the Hong Kong Stock Exchange or the Hong Kong Sharebrokers' Association. Without, therefore, over-valuing the evidence which the present Inquiry has brought somewhat fortuitously to light, I would submit to Your Excellency that the facts herein disclosed serving as they do to confirm in some part the wide-spread impression that corruption exists in more than one department of Government, and suggesting in more than one instance wholesale disregard for the provisions of the Colonial Regulations and General Orders of the Hong Kong Government, may well be of sufficient importance to form the subject of in- vestigation by a separate Commission of Inquiry appointed expressly for that purpose.
4. As Your Excellency is aware bribery is most difficult to prove by direct evidence, since from the very nature of the offence secrecy is always demanded and there is never a "third party" present. Nevertheless, I am convinced that if a Commission of Inquiry is set up to investigate the facts I have brought to your notice, much will be established which will either prove or dis- prove the disquieting rumours that bribery and corruption are rife in Government "departments.
P.T.0.
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