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8. What is really at the back of their minds is that they merely wish to be assisted in the protection of their ships and wish to obtain the best assistance at the oheapest possible rate, which is Military guards at the sole cost of their food.

The position, therefore, will never be regularised

9.

until the firms are made to realise that the Government have definitely decided that the responsibility for the internal protection of their ships is one which rests upon themselves and

for which they themselves must pay.

10.

Everyone is desirous of assisting the companies as

far as possible, and there seems no objeotion to providing ilitary guards when an emergency arises calling for special precautions and the men are available. But it should be clearly understooâ by the companies that this is not a right but merely a conoession and that they should pay at least an equal amount per man as is

I request I now paid by the companies who employ Sikh guards.

may be authorised to carry this out.

11. I regret to say that in spite of all the warnings they have received, the shipping companies have done practically nothing this year to improve the defences or organisation of

their ships or to provide their own guards.

I believe this

attitude of indifference is largely due to an impression they appear to possess that the Government are not really in earnest in stating that the guards will be withdrawn on 1st April 1930.

13. I cannot too strongly state that if the announced policy is not ourried out the companies will indeed never do any thing and the Government will be sailed indefinitely with the responsibility for the provision of guards which were introduced originally as a temporary expedient, and far from being able to reduce the garrison in China the present one will be quite inadequate for the demands that will be made upon it.

13.

If, however, contrary to the expectation of the shipping companies, the Military guards are withdrawn, there is no doubt that piracies will recommence, each of which will ke

exploited

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