This

the memorandum of March 24th, 1925, by Mr. Lloyd, the

Superintendent of Imports and Exports at Hongkong (see your

despatch No. 383 of August 17th 1925, F.3853/106/87).

fact, taken in conjunction with the information set forth in

my predecessor's despatches of June 26th and September 3rd,

1925, to the Governor of Hongkong (of which I attach copies)

makes it appear probable that Mr. Saito's business at Hongkong

and Canton was indeed connected with the Paracel Islands,

although this does not of course exclude the possibility of

his having also engaged in the traffic in drugs.

3. In regard to Mr Shimizu, I think that the Japanese

explanation of his part in the transaction may be accepted.

I return herewith the papers in original enclosed in

your despatch No. 383 of August 17th, of which I have

retained copies.

4.

I have the honour to be,

With the highest respect,

Sir,

Your most obedient,

humble servant,

(Sa) JOHN TILLEY.

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