6
2. I am to say that, for the reasons stated in your letter, the Government of India agree in the opinion of his Honour the Lieutenant-Governor that the proposal cannot be entertained. I am to request that the Consul at Tengyueh may be informed accordingly.
Copy of correspondence forwarded to the Foreign Department for information.
Inclosure 5 in No. 1.
Government of India to Government of Burmah.
January 20, 1904. WITH reference to the correspondonce ending with the letter from this Department, dated the 6th May, 1902, I am directed to forward a copy of a despatch from His Majesty's Secretary of State for India, dated the 8th October, 1903, and of its inclosures, regarding the proposal made by Mr. Litton, Acting Consul-General in Yunnan, for the removal of the prohibition against the passage of Yunnan opium through Burmah in bond.
2. It is understood that a representation on this subject has recently been addressed to the Government of Burmah by the Rangoon Chamber of Commerce. I am to request that, with the permission of his Honour the Lieutenant-Governor, the proposal may again be considered by the Local Government in the light of the arguments which have now been adduced in favour of its adoption, and to say that the Government of India desire to be informed, at as early a date as possible, of the Lieutenant-Governor's viewa regarding this question.
Inclosure 6 in No. 1.
Government of Burmah to Government of India.
March 25, 1904.
I AM directed to acknowledge your letter, dated the 20th January, 1904, torwarding a copy of a despatch from His Majesty's Secretary of State for India, dated the 8th October, 1903, and of its inclosures, regarding the proposal made by Mr. Litton, Acting Consul-General in Yünnan, for the removal of the prohibition against the passage of Yunnan opium through Burmah in bond.
In reply I am to inclose, for the information of the Government of India, a copy of a letter, dated the 25th November, 1903, from the Rangoon Chamber of Commerce (and of its inclosures), in which the Chamber support Mr. Litton's proposal. I am also to forward a copy of a letter, dated the 8th May, 1902, which was received from Mr. Litton nearly two years ago, which shows how the matter was regarded at that time by the Viceroy of Yunnan, and I am to add the following remarks, which will explain the views of his Honour the Lieutenant-Governor in regard to this question.
2. Certain arguments against the proposed scheme were advanced by Sir Frederic Fryer in my letter dated the 4th April, 1902. These were :-
(1.) That the opium might be tampered with while in transit through Burmah in bond;
(2) That the production of opium on the frontier, and consequently its illicit importation into Burmah, might be stimulated.
As regards the first of these arguments, I am to attach a copy of a note by the Chief Collector of Customs, Rangoon, and of certain draft rules that have been framed by him at the request of the Lieutenant-Governor for the transit of Yunnan opium in bond through Burmah. Sir Hugh Barnes is unable to say whether these rules will be entirely suitable until he has discussed them with Mr. Litton, but he is decidedly of opinion that, if the Chinese Government are willing to further the proposal, there should be no serious difficulty in devising arrangements with the officials of the Imperial Customs at Tengyueh, which would effectually prevent any tampering with the opium while it is in transit to or through Burmah. It has been pointed out by Mr. Litton that the whole of the Hong Kong-Mengtse trade goes through Tonquin
7
405
under seal in the manner that be suggests, and his Honour considers that difficulties of transport present no insuperable obstacle to the adoption of Mr. Litton's proposals.
The draft rules assume that opium will be conveyed under military police escort between Tengyueh and Bhamo, It seems to the Lieutenant-Governor that there are grave objections to such a proposal, to which it is exceedingly unlikely that the Chinese Government would agree. But Mr. Litton appears to anticipate no difficulty in arranging for the safe transit of the opium to the Burmah frontier, and on this side of the border escorts could be provided if required. The Lieutenant-Governor does not delay this letter in order to ascertain Mr. Litton's views, but he is in communication with him, and will address the Government of India further on this part of the subject later on.
3. As to the second argument, Mr. Titton represents that the amount of land suitable for opium cultivation near the frontier is already under the poppy owing to the demand created by the market at Yungchang, and that the total area under poppy eultivation in Yünuan is limited by natural causes, and is not likely to increase. Even if it Mr. Litton's answer appears to the Lieutenant-Governor to be a sound one. is admitted that there is a slight risk that the production of opium near the frontier would be stimulated, it does not follow that smuggling would increase, for it is likely that if a cheap and safe means of transit by sea were available most of the opium produced in West Yunnan would be sent by the Tengyueh-Bhamo route through Burmah in bond, and that there would be less opium available for smuggling across the frontier into Burmah. It would probably be found to be more profitable to export than to smuggle. There is, moreover, the argument that even if the opium does not go by Barinah it will probably sooner or later find its way to Canton by the French Red River route, in which case the stimulus to the production of opium would still have to be faced.
4. For the foregoing reasons, Sir Hugh Barnes is not disposed to attach much weight to the objections urged against Mr. Litton's proposal. On the other hand, his Honour thinks there can be no doubt whatever that if Yunnan opium could be exported through Rangoon a very great stimulus would be given to the import trade through Burmah to Yunnan. Mr. Litton estimates the total export trade of the Yunnan Province at 14,244,000 taels (1,780,6007.), and the total import trade at 7,980,000 taels (997,5007.), making the total trade for the province of 22,224,000 taels (2,778,0002). From the detailed statistics given by Mr. Litton in his last Commercial Report, which are described by him as a rough approximation, it appears that of the total sum of 1,780.5001, which represents the value of the export trade, the annual exports of opium are valued at a sum of 10,000,000 taels (1,250,0001), or more than two-thirds of the total export trade. A large proportion of that opium is exported to Canton and Shanghae by land and river routes, and it is this portion of the trade which, it is expected, would be sent by Rangoon if this route were open.
The following figures of the import and export trade via Bhamo are given in Mr. Litton's Commercial Report :-
May 8, 1902, to May 8, 1903
Exports.
Imports.
Tarls. 1,111,217
£ 138,902
Tuels. 209,787
£
26,223
The total import and export trade through Tengyuch, therefore, amounts in value to 165,1251., only a small fraction of the total trade of Yunnan, and imports exceed the exports in value to the amount of 112,0001.
If only one-twelfth of the opium exported from Yunnan were to take to the Rangoon route this balance would be redressed and the merchants' power to pay for imports would be proportionately increased. The trade in China appears to be chiefly by barter, and if the Tengyueh merchant can exchange his imported goods for opium, and instead of remitting cash to Rangoon can pay for his imports by sending opium to Rangoon for export to Cantou, it seems certain that the volume of trade must largely increase, if it is the case, as Mr. Litton assumes, that the small imports at present are due, not to lack of demand, but to the difficulty found in paying for them in cash. trade by the French route already largely exceeds the trade by Bhamo, and is developing
The