2

Bhamo to Tengyueh. The object of that proposal is to enable Indian merchants to retain a considerable share of the Yunnan trade even when the French railway has been completed to Yünnan-fu. And if the construction of the line should prove to be feasible, any scheme that promises to improve the traffic upon it is deserving of consideration.

5. A copy of correspondence with the Foreign Office on the subject is inclosed, from which it will be seen that His Majesty's Government will in any case reserve their decision as to laying the matter before the Chinese Government until His Majesty's Minister at Peking has again been consulted.

Sir,

I have, &c.

(Signed)

JOHN MORLEY.

Inclosure 2 in No. 1.

Government of India to Mr. Morley.

Simla, April 26, 1906.

WE have the honour to acknowledge the receipt of your despatch dated the 26th January, 1906, in which you deprecate the definite abandonment of the scheme for the passage of Yunnan opium through Burmah in bond.

2. It will be seen from paragraphs 3 to 5 of our despatch dated the 5th January, 1905, that we have recognized the fact that the adoption of the scheme in question might give some stimulus to the Burmah-Yünnan trade, and that we are also fully aware of its possible political advantages. We have therefore no objection to the matter being again referred to His Majesty's Minister at Peking. At the same time we cannot but repeat and emphasize the doubts expressed in regard to the scheme in our despatch of the 5th January, 1905, referred to above, which were so fully shared by Sir E. Satow that he thought it inexpedient to approach the Chinese Government on the subject, and we strongly urge that no formal overtures may be made by His Majesty's Government to China, and that the initiative in this respect, if taken, should be left to come from the latter Power.

We have, &c.

(Signed)

MINT0. KITCHENER,

A. T. ARUNDEL. DENZIL IBBETSON.

H. E. RICHARDS.

E. N. BAKER.

C. H. SCOTT.

C. L. TUPPER.

* To Foreign Office. December 14, 1905; Foreign Office. December 25, 1905.

[This Document is the Property of His Britannic Majesty's Government.]

SOUTH-WEST CHINA.

CONFIDENTIAL.

[18671]

No. 1.

Foreign Office to India Office.

2262223257

REC

[June 13 1906]

SECTION 1.

436

Sir,

Foreign Office, June 13, 1906,

I HAVE laid before the Secretary of State your letter of the 30th ultimo, inclosing copies of further correspondence with the Government of India on the subject of the removal of the existing prohibition against the passage of Yunnan opium through Burmah in bond.

With regard to the suggestion of again consulting His Majesty's Minister at Peking on the subject, Sir E. Grey has observed that the Secretary of State for India, in his speech in the House of Commons on the 30th May, announced his intention of discussing the whole opium question with Sir E. Satow on his arrival in this country.

I am to suggest, for Mr. Secretary Morley's consideration, that the subject matter of your letter under reply should also be reserved till then.

I am, &c.

(Signed)

F. A. CAMPBELL.

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