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proprietors are always poor men and dependent thereon for a livelihood, such shops shall also be required to take out licences, in order that they may be inspected.
Preparation of raw opium in refuse opium shops is absolutely forbidden; but in view of the fact that the profit derived from the sale of the paste which is made from the refuse opium purchased from the opium shops is small, no duty need be paid for their licences. No new shop shall be opened, even in place of such as may be out of business. Lights shall be extinguished and doors closed at 9 P.M. every night; and vagabonds shall not be harboured, on pain of attachment and punishment. Large establishments shall pay 12 dollars, small establishments ... dollars, per annum for the licence certificate itself.
Divans for the consumption of opium have never vended the prepared drug; to obviate the possibility of fraud, they are now forbidden to prepare it at all on the premises. Such divans must, however, take out licences, and, as apart from the shops, pay 4 dollars per annum for the certificate.
5. The farming of this duty being under Government supervision, the shops of any dishonest merchants combining to resist the same will be seized by the local officials at the instance of the head office; the ringleaders will be sought out, brought to trial, and severely punished.
Inasmuch as the law has always required that converts, being equally Chinese subjects, should bear an equal share with non-converts in all labour on public works or rates levied for projects of local benefit, so also, under the new licensing system for opium shops, must they pay duty and take out licences, and will, if resisting payment, be equally dealt with by the law.
6. Opium shops having always been prohibited in the Tartar quarter, it is highly probable that, on the introduction of the present licensing system for opium houses in Canton, dishonest traders will, in collusion with bannermen, rent houses in the said quarter for the secret preparation of the drug, and will convey it into the Chinese quarter and secretly sell it. The Tartar General will be requested through the Viceroy to direct his chief officers to use their utmost endeavours to check such abuse, in the interests of the revenue.
The above Regulations are a general outline of the present scheme, and are subject to alteration, if such be necessary, at any time.
(Translation.)
Inclosure 4 in No. 1.
Viceroy of Canton to Consul-General Scott.
Sir,
Canton, January 22, 1906. I HAVE the honour to acknowledge the receipt of your despatch of the 16th instant, requesting that the levy of a prepared-opium licence may be discontinued pending reference to the Wai-wu Pu and His Majesty's Minister in Peking, for their consideration and decision.
In reply, I have the honour to point out that a licence duty on prepared opium has long been levied in this province. In 1884 a Government office was opened for the purpose, but in 1889 the system was changed and the tax farmed out to the Yung An Tang Syndicate—no objection to these measures being raised either by your predecessors or yourself.
Subsequently, in 1902, when the Kuang Hsing Syndicate took over the farming of the licences, the duty was calculated on the raw drug before the packages were opened, and was thus of the nature of additional taxation. You accordingly wrote that you had received instructions from His Majesty's Minister to the effect that this proceeding was in contravention of the Chefoo Convention, and requested the discontinuance of the tax.
As, under the present scheme, it is the shops manufacturing the prepared article which are required to take out licences and pay licence fees, the tax is no more than a shop tax; and not being levied on the raw drug before the packages are opened, has absolutely nothing to do with the Chefoo Convention.
The system has not only been in force for a long time in this province, but was adopted years ago throughout China, and its suspension would naturally be a matter of difficulty.
Your long residence in this province and your well-known sense of justice will, I am sure, enable you to appreciate the obstacles which prevent compliance with your request.
I avail, &c.
(Viceroy's seal.)
Inclosure 3 in No. 1.
Consul-General Scott to Viceroy of Canton.
Canton, January 16, 1906.
Sir,
WITH reference to the proposed levy of a tax on prepared opium, as recently notified by the authorities, I have the honour to remind your Excellency of the arrangement made by me with your Excellency's predecessor, that no tax on prepared opium should be introduced without the sanction of His Majesty's Minister and the Wai-wu Pu.
I would also call the attention of your Excellency to my despatch of the 22nd July, 1903, in which I made representations in the above sense, requesting your Excellency to prohibit the collection of such a tax by the Heng Chi Syndicate, and to your Excellency's reply received the 4th August, agreeing that the tax should not be introduced until the sanction of the Wai-wu Pu had been obtained.
I now learn that your Excellency has decided to impose a tax on the prepared drug under another name, viz., prepared-opium licence. Such tax, whatever name be given to it, is a breach of the above-mentioned arrangement, and I would request your Excellency to suspend the levy until the matter has been submitted by your Excellency and myself to the consideration and decision of the high authorities in Peking.
I avail, &c. (Signed) JAMES SCOTT.