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U.S. Government. Later, in 1969-70, the U.S. Government sent its administrative experts to investigate. After their three-month investigation, no change was made. Later, in 1971, the U.S. Government began to pay sufficient per diem to pilots. At the present time, the U.S. Government still pays them per diem.
“Reports on Opium.—Since the year 1963, I have known that there are three kinds of opium transported by the merchants.
“A. Raw opium for sale in the Singapore, Malaysia, and Hong Kong markets. "B. 100 percent manufactured opium that can be smoked immediately, for sale only in Saigon, South Vietnam.
"C. Morphine for sale in Hong Kong and other unkown places.
"Later in 1971, no raw opium and morphine were known to be transported through Laos. Only 100 percent manufactured opium was seen. Heroin, another kind of narcotics, has also been seen. It has been transported to the Saigon market.
"The new kind of narcotics (heroin) can be carried by the merchants them- selves in small cases. Therefore, they stopped hiring the Air Force to transport opium in late 1971. The Air Force also was no longer interested in the trans- portation of narcotics because its men were being paid sufficient per diem.
"At the same time, in late 1971, the Government also had enacted the Narcotics Law.
"To produce heroin, there must be a special chemist, good equipment, and many kinds of chemical ingredients so the Lao people do not know how to produce it.
"Opium Factory.-In the year 1963, a factory for manufacturing opium was set up in Luang Prabang. Later, when the merchants were ordered to stop manufacturing opium, they moved their factory to a place North of Ban Houei He (PC-3597) bordering Burma, where they secretly manufactured it. They also manufactured it at a Yao village in the area North of Ban Nam Kheung (PC- 3657 or PC-3054).
"In fact, the merchants secretly manufactured opium at various places on the Burma border.
"In 1971, the Ho came to Laos from Burma and Chiang Mai. They established two factories for producing heroin in the area of Nam Kheung, North of Houei Sai. They hired technicians from Hong Kong. At the beginning of their work, none knew that they were producing heroin. All understood that they were producing ordinary opium. After six months of production, some knew that they were producing heroin. After being informed that they were producing heroin, I ordered the Houei Sai Provincial Commander to order them to stop their production immediately. I told the commander to let the merchants know that if they refused to stop their work we would arrest them immediately. After receiving the order, the merchants stopped their work. In October 1971, they moved their equipment back to Burma. Only low grade equipment was left in the area North of Houei Sai.
"I believe that there is now no heroin production factory in Laos. The illegal factories were operating for only six months.
"Proposal for Banning the Cultivation of the Opium Poppy, the Trafficking of Opium, and the Trading of Opium—First of all, the merchants must be pro- hibited from trading in opium and they must be told to run other businesses which are better and honest.
"Next, the people must be prohibited from cultivating the opium poppy. "I understand that the U.S. Government has allocated considerably large amounts of money for the narcotics suppression program. News reports said that the United States has given $20 million to the Turkish Government for the suppression of opium, which will be used in its development program under which its people will grow other crops instead of the opium poppy.
"Early this month, the U.S. Government also gave $2 million to the Thai author- ities, which will be used in their attempts to suppress opium. In addition, the news reports said that the Thai authorities and the International Police pur- chased opium from the hill tribesmen living along the Burmese border areas and sent it to be kept in Chiang Mai. Most peoples possessing opium in areas border- ing Burma are of the Kuomintang group, the General Li group, and the General Tuan group. These authorities bought about 30 tons of opium from the groups for almost $2.6 million.
"In Burma, the Burmese Government refused to allow the United Nations officials concerned with narcotics to get involved in its affairs. The Burmese Government itself will suppress opium. I understand that it is very difficult to