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Flotilla Company to take it down the Irrawaddy to Rangoon, where again it would be put in a bonded warehouse and shipped, also by the Customs, on boats of a specially selected line (British India; bound for Hong Kong; from Bhamo to Hong Kong the responsibility would rest with the Customs and the Steamer Companies.
At Tengyuch the opium would be packed in specially prescribed boxes and sealed, leaded, and numbered in a specially prescribed way, and notice would be given by the Customs bere to Bhamo and to the Customs at Canton or Shanghae (port of destination) of each consignment.
Mr. Tilly knows so much more about the matter, so far as Burmah is concerned, than I do, that I feel it would be impertinent on my part to make many remarks on his proposals, but I have shown them to the Commissioner of Customs here, Mr. Napier, who writes that: "So far as we (the Chinese Customs) are concerned, the rules are simple and natural." I also talked the matter over with some of the Chinese merchants, and I think, so far as they are concerned, that there would be no difficulty in carrying out these rules. The Burmah Customs and the Flotilla Company are well known to, and trusted by, the Tengyueh firms. I would, however, express a hope that, to begin with, at any rate, the Flotilla and the British India will quote a strictly moderate rate of freight; so far as the Rangoon-Hong Kong run is concerned, I would venture to suggest that if later on the other shipping Companies make arrangements, satisfactory to the Collector, for safe carriage of the Yunnan opium, that they may be allowed to participate in it. A monopoly is always to be deprecated.
As regards possible substitution en route of Indian opium, as the opium from Bhamo to Hong Kong will be locked up out of reach of the Chinese, I do not see how such substitution is to be effected. Besides, the boxes could be leaded at Tengyueh with four pieces of wire, two lengthways and two crossways, and special marks could be written across the joints of the case, so that I really do not see how the box could be opened and Indian opium substituted without instant detection on arrival at the Canton or Shanghae Customs.
6. The merchants here could make up their opium in balls of any weight which the Burmah Customs prescribe. The weight and wrapping should be different from that of Indian opium. It is suggested that on the printed forms employed, for the convenience of the Chinese Customs, catties and taels should be used under the head" Weight," and not lbs. and ozs., which latter, not being a decimal and not being a Chinese system, will give much needless trouble.
7. Given the consent of the Indian Government, we should have to negotiate an arrangement with China which would include: (1) Arrangements with the Imperial Customs, ie., Sir R. Hart; (2) with the Peking Government; (3) with the Yunnan Provincial Government and li-kin authorities; (4) with the Canton and Liang Kiang (Nanking) Viceroys and their li-kin and Provincial Government.
Now all this will take some time, and will require vigorous backing from His Majesty's Government. But as the result to our trade in Yünnan would be so very beneficial, and as this is the only means we have of extending our commercial influence in Yunnan, without unprofitably spending large sums of money, it is well worth the trouble. It cannot be too frequently repeated that our frontier trade, though showing signs of development, so far as foreign imports to China are concerned, is still only one-fourth of the Mengtse trade; yet in population and wealth the districts which ought to be supplied from Tengyueh are superior to those which would naturally draw their supplies from Mengtse; foreign goods, especially yarn, sent in by the French route and Nankeens, &c., imported via Szechuan, are sold far into West Yünnan. The reason of this tendency is that where freight is such an important item, that imports (i.e., cotton) are bound to follow the line of exports (ie., opium), and Tengyueh, with no exports, When the cannot hope to compete with Mengtse, which sends out opium and tin,
Meanwhile, we are French railway is in working order our position will be still worse, subjecting our trade to this crushing restriction; and what corresponding gain do we get? None; absolutely none. Indeed, it is obvious that the restriction must encourage what really is noxious, ie, an illicit trade in the drug for consumption in Burmah. The restriction is utterly and notoriously useless to prevent the cultivation and export of Yünnan opiumu and its competition, if it does compete, with the Indian drug. Nor have I ever been What happens able to see what force there is in the so-called "sentimental "argument.
* 10 fen or ceudareens
10 mace
16 taels
100 catties
1 chien or mace.
= 1 tacl, Liang or Chinese oz.
1 catty or chin.
1 picul or tan, which is 1334 lbs. avoirdupois.
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to the opium now, which leaves Yünnan destined for Canton or Shanghae? It goes to Chunking, in Szechuan, or Wuchan, in Kwangsi, and is there put on a boat which, in three cases out of four, flies the British flag, and finally arrives at its destination in a British steamer. Why does "sentiment" permit this, but take offence at the drug being shipped from Rangoon to Canton or Shanghae? Surely the morals of Rangoon are robust enough not to be corrupted by the presence of Yunnan opium in transit to China, any more than the morals of Calcutta are corrupted by the presence of Indian opium in transit to China.
Thus it seems to me that a very strong case can be made out for asking His Majesty's Government to press this matter through in spite of the troublesome negotiations which it may involve.
As to the system which we ought to endeavour to induce the Chinese to adopt, more especially as regards taxation, the Legation authorities at Peking and the Consulate authorities at Shanghae and Canton are more competent to speak than I am, But I would submit that, in order to disarm Chinese obstruction, it will be advisable, as far as possible, not to interfere with the present system aud rates of native taxation, and to arrange that the Imperial Customs, always regarded with jealousy by the provincial Mandarins, should appear in the matter as little as possible, and on their own account should only collect at Tengyueh and at the port of re-entry to China a small duty enough to cover the expenses and trouble to which they may be put.
Provided always that adequate means are adopted to prevent substitution and fraud, I fail to see why, on principle, and in the nature of things, opium grown in one part of China for consumption in another part of China should be subject to special penalties and difficulties, merely because in transit to its market it crosses foreign
waters.
(.) I would suggest that no opium should be allowed to pass the Customs at Tengyueh for export to Burmah until it had paid full provincial hi-kin, and regular official receipts for the same had been produced for the inspection of the Customs. The rates of li-kin for opium thus exported should be the ordinary provincial rate (which in Yunnan is paid in one lump sum) and no more or less.
(6.) No opium should be released by the Customs at Canton or Shanghae until it bad paid the same provincial li-kin which it would have paid to the Canton or Liang Chiang Government had it arrived through native sources. Here again regular official receipts would have to be produced at the Customs, and it would be advisable that one lump sum should free the drug in its province of consumption.
Thus the two Departments who might be chiefly expected to obstruct, i.e., the Yünnan li-kin and the li-kin in the province of consumption, would only suffer no loss, but, on the contrary, would gain heavily; for, as things are now, a large proportion of the opium gets through without paying anything at all to the Chinese Government, but by paying instead bribes, squeezes, and blackmail to official underlings and bandits. The Yunnan provincial opium revenue is only about a quarter what it would be under an honest administration. I should think that the present Viceroy of Canton would be glad to see such an addition to his revenue as the adoption of some such proposal as the present would produce. No doubt Viceroy Ting of Yunnan will oppose the scheme merely on the ground that it will encourage foreign relations and increase foreign trade. A number of the underlings and gentry, especially at Yunnan-fu, whose speculations and perquisites will be curtailed, would also oppose; but I think these difficulties may be overborne, if the matter is really taken up in earnest.
The total taxes paid for Yünnan opium sent across Burmah should, in short, be the same, or possibly a trifle more than what is now paid. Taxation being equal or nearly so, Burmah would then secure the trade on account of the speed, security, and cheapness of the Rangoon transit route.
In Yunnan provincial li-kin has been raised from 1:50 taels (3 rupees) per 100 taels or ounce of opium to 2:10 taels (rupees 4:2:0) since last year. This comes to 33-60 tacls, or say 67 rupees the picul of 100 catties or 133 lbs. As regards present rales in Canton or Shanghae, the Consulate there could give details.
G. J. L. LITTON, His Majesty's Acting Consul, Tengyueh.
April 26, 1904.
(Signed)
[1844 - -1]
G