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Countries other than China. A maximum limit however would be placed on what we should be allowed, which limit would be subject to revision from year to year.

As Your Excellence is aware none of the requests could be acceded to, but I said that I had a scheme to propose which I believed would be for our mutual benefit.

Our next Meeting was on the 3rd And after going into the objections in detail to the Chinese proposals I laid before Commission a scheme which has for its object the better control of opium in the Colony with the view of benefitting our own Revenue arising from the prepared Opium Farm.

As Your Excellence knows, the Straits Government get about $1,800,000 for their opium Farms. This, due to the larger population, but to the price paid for prepared opium; what the Singapore Farmer and his licensees can sell for $2.20 the Hong Kong opium Farmer is obliged to sell for 83 Cents. Why? Because the monopoly of sale of broken Chests is in the hands of the Straits Farmers & they have not to fear every person buying small quantities & cooking it as is now done here, owing to the uncontrolled sale & free circulation. The opium which passes over to the other side of the Harbour & which pays no duty, is Cooked & sent back here to the detriment of our Farmer.

He estimated & so did others long ago that more than one half as much as he sells is smuggled in the prepared state into the Colony. My plan is therefore to try & control the raw opium here, as in the Straits; but before doing so we must see that Macao does something.

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