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China Navigation Company's Fleet comprises a very considerable

part of the vessels employed.

Furthermore, although, at

the present time, piracy only occurs in Chinese waters, it may

spring up elsewhere in waters in which Hong Kong has no

interest.

6.

For these reasons, therefore, My Lords are strongly

of the opinion that the whole, or at least a substantial part

of the cost of the reference to the Judicial Committee of

the Privy Council should be borne by this country, and They

hope that Their Lordships of the Treasury will see Their way

to accept this view.

7.

Copies of this letter have been sent to the

Colonial Office, Board of Trade and Treasury Solicitor's

Department.

I am, Sir,

Your obedient Servant,

(Agd.) S. H. Phillips.

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