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Enclosure 1.

Enclosure 2.

Enclosure 3.

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regarding piracy prevention measures.

Revision of the

regulations was underteken and after considerable discussion with the Chamber of Commerce and the Guilds to whom the officers of the ships mainly concerned belong, a revised

set of regulations was passed, copies of which I enclose. Considerable opposition was shown by the Guilds to the etatement that it is the duty of the master and other certificated officers to resist to the uttermost any piratical attack, on the grounds that shipping companies

had so far taken no steps to insure officers and their families in case of death or disablement in the resistance

of a piratical attack. To meet these objections the Executive Council has agreed to the award of grants in accordance with the enclosed statement and it is hoped that the companies concerned will in addition take steps to provide adequate insurance for their officers.

9.

Considerable difficulties, however, arise in

the prevention of piracy on board these ships on account of . the great lack of discipline and efficiency which prevails. I enclose in this connection a copy of the statement made by the Naval Intelligence Officer before the Coroner in connection with "Tai Lee" piracy. Sections 4 and 5 of the Piracy Prevention Regulations are intended to meet these difficulties but the conditions prevailing in the coast and river boats sailing from this port are such that it is impossible to hope for any great measure of success.

It should be understood that these remarks

do not apply to the well-run European-controlled ships, whose immunity from attack by pirates is probably due to the knowledge that the regulations are properly complied with, but to the Chinese-omed vessels which carry British officers merely in order to comply with the conditions requisite to obtain registration in Hongkong.

10.

You are already aware from the telegraphic

correspondence

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