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license should be granted by the Opium Farmer. It was desirable that the Government should not grant licenses direct, and that it should not assume any responsibility in controlling the trade, unless through the Opium Farmer. I showed first draft ordinance to Mr Chater, before the Commission suggested that the "Harbour Master" should search for deficiencies, instead of the Opium Farmer, as proposed, and as I found that the Foreign Importers would be very sensitive about allowing a Chinaman into their Godowns, I promised to modify that clause, and it was modified in my last draft.
I had a "Colonial Plan" which I put forward in July accepted by the Chinese Government, but further consideration, as I have pointed out in my report, and the guarantees given by the Opium Farmer that he would neither sell nor smuggle, and would allow inspection of his original books at all times, led to a modification, which contemplated the prohibition of retail sale unless at Kowloon, and only allowed the export, as well as the import, to take place under check. As has been shown over and over again, the coming into operation of the additional article, whereby one combined duty and letter of 110 taels per picul would be collected by the Foreign Customs alone instead of the lower scale of the Hoppo and Viceroy, with their discount, of 25 and 40 per cent respectively was calculated to draw a large portion of the legitimate retail trade in Opium from Hongkong to Canton, Swatow, and cause an increase here in the smuggling trade. It has also been pointed out over and over again, that of the 17,000 piculs