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or retenue of Hongkong it shall be given up. 3-That opium which has paid duty of Tls. 110 a picul shall be free from all further imposts in the interior and shall partake of the advantages and the benefits of the Additional Article. But on further consideration the British Commissioners themselves were of opinion that if loose balls of opium were obtainable without the protection of a duty paid certificate smuggling would still go on, junks be overhauled, and steamers searched. The system was therefore modified and the present one adopted. It was that there should be no sale of opium by the Opium Farmer, in quantities of less than one chest. Experience in Singapore proved that the retail trade amounted to three or four balls a month, and only therefore the Opium Farmer did not desire to have the privilege of selling opium, and a change was made which would operate equally in favour of an increase in our revenue. The chief objection to this scheme, which is embodied in the Ordinance, is the restrictions which clauses 3 and 4 will place on the retail trade in opium in this colony. I admit that they will place a certain restriction on it but not to such extent as at first appear. It must be borne in mind that quite irrespective of this Ordinance the new system must of itself work a very great change in the retail trade.
There has been and there is a very large retail trade in opium in this colony, but there are special reasons for it, which will disappear as soon as the additional article is put in force. This duty on opium, shipped in junks went to the Hoppo, and in order to secure it the Hoppo gave a reduction of 25 per cent. in the duty, whilst the Lekin Board, in order to secure the payment of the Lekin, granted a discount of 40 per cent on all duty paid in Hongkong. That was a very great inducement, and therefore parties wishing for small quantities, and even so much as one chest, sent down here and their agents here advanced the money and paid both the import and Lekin duty here. They found it was very advantageous. They obtained 25 per cent. on our duty and 40 per cent. on the other, and therefore all this trade was centred in Hongkong. If the duty was paid in Canton they did not enjoy that privilege.
That should be borne in mind when we consider this Ordinance. The question we should ask ourselves is, what is the effect of the additional article, and quite irrespective of this Ordinance will there be that large retail trade in future? I think it may be said nearly all the opium will now be shipped by steamers, and opium wanted for Canton, Fatshan, and other places near, will go to Canton and there the distribution will take place. Therefore the retail trade is receiving a very severe blow even if this Ordinance was not passed at all. And there is a foreign retail trade in opium which is smuggled, and that will be stopped whether we interfere or not.
The amount sold by retail for lawful export being thus greatly diminished, it was thought a small station in Chinese territory just outside our boundaries would be sufficient to meet the wants of the small honest retail trade which will remain here. The only places between which it could take place would be Hongkong and places very near. No one wants opium in Hongkong unless boiled or prepared, and we seek to make the consumers pay the duty. It is believed that opium intended for places near Hongkong does not pay duty, and I am informed that the whole of the Wanchai district is supplied with opium that has been smuggled, boiled, and prepared in Kowloon City, and then brought back here and sold.
For the honest trader every facility will be given which is possible. Parties wishing to break up a chest will take it to the station, they will pay duty on what they have sold, the authorities will make up their opium into such quantities as they desire, and the rest will be stored there, as it were, in bond. I believe there will be very little retail trade to be interfered with, while in return we obtain the removal of the blockade, the threatened withdrawal of river steamer privileges will not be carried out, and we hope for an increase in our opium revenue, besides doing away with an international grievance.
It is therefore thought advisable to do what Singapore has done years ago, for its own interest, namely, to prohibit the export of opium in less quantities than one chest. One thing I should wish to mention, and that is that at Singapore, where there is a much smaller Chinese population than at Hongkong, the revenue derived from opium is $1,032,000, while here we receive only $183,000. Why is this? Because there is so much opium surreptitiously boiled that the Opium Farmer sells less than he would otherwise do, and the competition which he suffers from this contraband trade obliges him to place a lower price on his prepared article.
The adoption of this scheme will give not only relief to the general trade, which I have mentioned, but give an enormous impetus to the revenue from an article which is a very legitimate object of taxation. This Ordinance will not be put into force at once, but it is necessary to pass it as soon as possible, because the action of the Macao Government depends in a great measure on our action here.
Something has been said about the inquisitorial powers granted to the Opium Farmer under this Ordinance. That is a matter which can easily be considered in committee, and I believe a change might be made giving this power to a Government officer. This would remove one of the objections to the Bill and would be more acceptable to the Chinese Government. On that point I mention it has been said the Opium Farmer may purchase certain quantities from little dealers and if these powers were conferred on him he would be able to ascertain their stocks and to a certain extent control their prices. But he has given us assurances and proofs that he has never purchased any opium except from large merchants here and in very large quantities.
I hope that the Bill will be considered by hon. members as a serious and honest attempt to get rid of a difficulty which for many years has caused an amount of irritation and ill-feeling between the two countries. It is acceptable to China and there is every reason to believe that it will prove beneficial to this colony in many ways, by freeing the legitimate trade from many impediments which have hitherto surrounded it.
In the words of my honourable friend— "That the Colony continues to prosper, notwithstanding the difficulties which surround its trade, indicates what would be the volume of its progress and development were its natural advantages of position and facilities offered to trade allowed their due influence." I have every reason to believe these words will be realised, and that when we get rid of the impediments the volume of trade will largely increase.
The COLONIAL TREASURER—I beg, sir, to second the motion of my learned friend, and in view of the very great importance of the subject I shall not offer any apology for detaining the Council a few minutes longer while I make one or two observations on the merits of this Bill.
There have been only two really serious objections to it brought forward. The first is the most easily managed, and refers to what have been called the inquisitorial powers given to the Opium Farmer. The second is a more difficult one, and refers to the effect the Bill will have on the retail trade in opium which goes on in this Colony.
Now, sir, to take the second one first. In considering a question of this kind I think we ought to see how far we have really and practically any choice in the matter. The home Government, it appears to me, is fully determined to bring to an end the diplomatic trouble which has been for the last twenty years, or perhaps longer going on about this blockade, and the smuggling into China from this colony. It has had before it the serious question of Gibraltar, which somewhat resembles the question here; a course has been adopted there which I believe has been successful, and the home Government is resolved something must be done.
It is not for this colony to say nothing can or shall be done. We shall be obliged to do something to meet the views of the British and Chinese Governments. It is quite possible we may go further and fare worse. It is practically a choice between inflicting some inconvenience, I hope not much, but still some inconvenience on the retail dealer in opium, and accepting what has been referred to as the hulk plan, which really amounts to a surrender of the freedom of import, with many other inconveniences on which I shall touch.
The difficulty in arranging any plan hitherto has been in making any agreement which would include Macao, because it was useless for us to do anything here unless equivalent measures were taken at Macao. That has now been done and everything is in position for a satisfactory arrangement of the question. The question is, what is that satisfactory arrangement to be? If Sir Robert Hart's hulk plan, then virtually the freedom of our port and the existing facilities of steamer navigation go.
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