Sessional_Paper_1907 — Page 281

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(c.) Tenders should be called for in good time and all contracts let at least three months before the existing contracts expire, so as to give the new contractors ample time to make the necessary preparations.

(d.) Where the contract amounts to only a small sum annually, the tenderer should not be required to furnish security greater than 25 per cent. of that amount, so as to enable the small capitalists to come forward and compete.

2. The system of recognising authorised drainage contractors be abolished, as we cannot ascertain that any good has resulted, while we believe it has assisted in the creation of an improper monopoly.

Kai's

180. It remains to deal with SAM Iu, the principal member of the con- See Lo Man tractors' ring. When his partner TSI HI was banished for illicit dealings, SAM IU evidence. thought it best to ensure against a like fate, and consequently took out a British Page 1314. born subject's certificate. It is questionable whether this man was born in evidence. Hongkong, and if this can be proved, we recommend bis banishment, together Page 770. with that of his brothers.

181. We consider far more supervision should be given to the daily carry- ing out of the various contracts.

182. At present the contractors are only controlled by the Inspectors, by whose reports they are practically judged, thus, if a contractor declines to make payments to certain subordinate officials, he can be reported and punished. By this method he may be driven to pay blackmail, or, disgusted with his treatment, throw up the contract which can then be secured by someone who will prove more complacent in the matter of paying bribes.

See Sam Iu's

183. Had any enquiry been made with regard to AU SUI SHANG before granting the small stores contract, it would have been ascertained that his firm really carried on the business of a small Chinese provision shop. This would have resulted in further investigation which should have revealed the fact that the contract was really with Lo MAN KAI, the Senior Clerk in the Sanitary Office. See Iuspector This appears to have been well known for some years past to the senior members evidence. among the Inspectors, many of whom appear to have been personal customers of Page 425/4 the firm. None however made any report on the subject.

184. The Secretary himself has admitted that he knew the Kwong Man HING shop and wondered how it was possible such an establishment could carry out this particular contract, but it apparently did not occur to him to look into the matter, or that there might be something requiring investigation, and even if he had, he would probably have been told it was not his business.

185. Further evidence for the necessity of such Enquiry has recently come to our knowledge. Some. three months ago, tenders were received by the Government for renewals of the small stores contract for the Sanitary Department for the current year.

The lowest tender sent in, in the name of a firm called CHEUNG KEE KI, was accepted, this contract to take effect on the 1st January; 1907.

or

186. No enquiry appears to have been made as to who the owners managers of the CHEUNG KEE Ki firm were, and on the 4th January a contract was signed by AU YING SHANG and AU SUI SHANG as the partners. A few days later, the Principal Civil Medical Officer forwarded this contract to the Chairman of the Commission for enquiry.

187. The senior officials of the Sanitary Department, when appearing before the Commission, had been informed of the relations of Au SuI SHANG and AU YING SHANG with Lo MAN KAI in connection with the old contract given in the name of MAN HING, but appear to have been quite satisfied that the CHEUNG KEE KI hong had no connection with these people, as the MAN HING firm had also sub- mitted (presumably as a blind) a tender for the small stores contract, which however had not been accepted.

Mackenzie's