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before the Commission sat by the learned gentleman who represented Hongkong on that Commission; and I was then able to confirm the information he had received about the retail trade in broken chests, viz, that it was about 7,000 odd chests annually. I also approved of the draft Ordinance that was then shown to me, and in which retail sales through the Opium Farmer were allowed. I, however, made a suggestion that the Opium Farmer should not be placed over the importing merchant. That suggestion, I am now glad to see, has been adopted in clause II of the amended Ordinance. Sir, with the modifications referred to I have no doubt the Bill will meet with the approval of all parties concerned—so far as a Bill of this nature can be approved.
THE ACTING CHIEF JUSTICE (Hon. J. Russell)—With your Excellency's permission, I should like to say a few words with regard to this Bill. I understand this is the continued debate of the second reading—that the debate was simply adjourned with a view of seeing whether certain propositions that the hon. member (Hon. C. P. Chater) had laid before the Council would be received by the Chinese Government and Her Majesty's Government. In the memorandum which was placed before the Council by the Acting Governor (Mr. Marsh) when the Bill was laid on the table, it was pointed out that all that I, as Hongkong Commissioner, agreed to do, in connection with the Convention, was to undertake that the Government of Hongkong should submit to this Council an Ordinance for the regulation of the trade in opium subject to conditions therein after set forth being performed by China. The principle of that Bill, as laid before the Council, and which was prepared by myself, but of course with the thorough knowledge and approval of the Government, who had seen and approved my draft—I was acting all along under the immediate instructions of the Governor, as well as under written instructions—the principle of that Bill, I say, was the complete control of raw opium within the Colony.
The Commission when it first met had certain proposals put forward by the Chinese Government as to how smuggling into China was to be prevented. With regard to the smuggling of opium or any other commodity in Hongkong, it has been frequently asserted that the Hongkong Government had nothing to do with it, because this was a free port and smuggling a misnomer. But with reference to opium it was found that smuggling was possible in one respect, even within the Colony, and that the freedom of the port was used against the opium farm. The opium which came in free circulated freely, and large quantities were taken to the other side of the border, boiled and prepared there, and then brought back to the Colony and sold to the damage of the opium farmer's revenue.
Now, the only plan submitted by Sir Robert Hart and Shao Taotai, his colleague, was one which this Government could not accept and one which certainly the mercantile community would have protested against. That plan was the collection, by force of law, of Chinese revenue within the jurisdiction of Hongkong. Shortly, the proposal was that three Chinese-owned hulks should be stationed in the harbour, and that all ships, of whatever nationality, coming into the harbour should proceed alongside one or other of these hulks and there discharge all opium which was to go to the south of China. Through ships with opium were to take harbour letters from the hulk keepers stating the quantity on board and deliver such letter and opium to the Commissioner at the treaty port.
It was proposed that all opium landed in Hongkong should pay duty in the Customs whether it was consumed in the Colony or underwent the process of preparation before shipment to British Colonies, the United States, or elsewhere. In other words, China proposed to tax opium whether consumed in Hongkong or re-exported.
The report for 1882, after giving the net importation into each port states:-
The sorts imported and the estimated values are shown in the table below. All the opium imported into China reaches it through Hongkong. As the quantity consumed there is comparatively trifling, the quantity brought into China in native vessels and which consequently does not appear in these returns must be nearly equal to the quantity by which the Hongkong importation exceeds the entries at the treaty ports. A deduction must be made for the amount shipped to the United States for the use of Chinese there.
The total amount that came into Hongkong in 1882 was 85,565 piculs. The total quantity left in Hongkong, that is to say the quantity that did not pass through Sir Robert Hart's hands, in chests amounted to 19,856. Now, everybody knows that Bengal opium weighs 13 piculs per chest, so, therefore, the total number of chests that did not pass through Sir Robert Hart's hands was 16,000 or 17,000. How did we account for that balance? It has been shown by statistics supplied by the Hongkong, Canton, and Macao Steamboat Company that in 1885, 9,145 chests went straight to Macao. That, therefore, must be deducted from the quantity that could possibly be retailed in Hongkong, also what was shipped to Manila, Tonquin, America, and other places.
That there was a retail trade was undoubted, and I pointed out to the Commission that it was necessary, if we possibly could, to devise some means by which this retail trade should be preserved in the Colony. There had been nothing but the obnoxious bulk plan put forward, and asing rejected it, I felt that after the report of the Smuggling Commission of 1883, China had a grievance against this Colony, as this Colony had against China, and that we ought to do what we could to provide a remedy without detriment to ourselves. Was that possible? It seemed to me it was.
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the control of broken chests, that is to say, that Opium should be sold, unless he had the complete monopoly of sale of quantities less than one chest, and an offer was made that if this were assented to, an increase would be made in the rent of the farm. And why? Because, he said if he had complete control of the trade in broken chests, he could increase his price, smuggling from outside would cease, and also the illegal boiling that was done in the Colony.
But the difficulty was that if the Government had attempted to do anything, the restriction on the opium trade here would have sent a large portion of it to Macao. In 1882 the opium farmer who came from Saigon had been got out of the place by the old farmers, and instead of paying the Government $210,000, as before, they offered $132,000. The Government then took the matter into its own hands and granted licences direct to the various dealers under the Ordinance of 1858. The increased revenue derived from that experiment was very considerable.
Under the management of Mr. Seth, who worked the matter with great care, the Government got, in addition to all expenses, over 100,000 dollars above what they had been offered. But there was an objection raised. It came from home. The home Government saw an objection to the close relation between the Government and the sale of the prepared drug, as it had to superintend its preparation, and the home Government preferred that the matter should be in the hands of a farmer if possible.
I happened, at that time, to be Colonial Treasurer, and I drafted an Ordinance taken from the old Ordinance of 1845 or 1846, giving the Government permission to grant licences for the sale of raw opium as is proposed now. There was a small revenue to be derived from that doubt. I saw the leading members of the importing trade and they saw no objection to it in the first instance, but very soon some of the Chinese dealers, some of whom profited largely by smuggling, raised a trouble and the Government did not proceed with the Bill.
There was nothing done: Macao again stood in the way. Quite recently, the present Opium Farmer has also been asking the Government for complete control over the trade in broken chests, and an Ordinance was actually published in the Gazette in April of last year—a Gazette subsequently cancelled at my request. It was proposed, that no one should sell opium in quantities of less than one chest except the Opium Farmer and his licensees, and it was arranged that no licensee should pay any fee unless the Governor in Council otherwise ordered.
This came out rather inopportunely, because I had hoped to produce this control as the solution for the Chinese Government of the blockade question and the smuggling of opium which led to it. But here it is.
It may be asked why it was altered. Well, it was simply in this way. While Sir Robert Hart was over at Macao negotiating, certain papers and blue books arrived from home, which had been recommended by Sir John Walsham, who had a large experience while at Madrid of the troubles between the Spanish Government and the British Government with reference to the smuggling of tobacco from Gibraltar.
Special officers had been sent out from home to see how that smuggling could be stopped, and it was important to see what they reported. The reasons that were urged by Messrs. Chester and Barton, the officials sent out, were cogent and strong as showing that so long as you allowed small quantities to circulate freely it was impossible to prevent smuggling, and they proposed that tobacco should not be allowed to be exported in less quantities than 50 lbs. This seemed to them perfectly fatal to smuggling.
Now, it was the duty of this Government, if it carried out the terms of the Chefoo Convention and the Additional Article, to help to devise some means by which Hongkong should not be made ...
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