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Received, copy of which is enclosed (No. 8).

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Although the Bureau attempts to shield itself under the title of "Anti-Opium" and the proclamation commences with reference to the Decrees which have been promulgated prohibiting the sale of the drug, it is very evident that the establishment of a Government Monopoly with its accompanying revenue is the main factor.

The proclamation explains the situation very clearly. All dealers are now obliged to take out a licence and must sell their opium exclusively to the Bureau.

After stating that the number of licences will be limited the following significant paragraph appears:-

"Those (existing dealers in opium) who wish to change their trade are at liberty to do so."

The public opium shops and divans being closed, the sale of opium is to be farmed out to those who have sufficient capital to engage in the business or by providing guarantees can obtain licences to act as sub-agents for the Bureau.

The value of the movement as an anti-opium crusade is shown by the fact that for the population of Nankin no less than two hundred prepared Opium establishments are to be started, 120 in the city itself and 80 in the suburbs.

The question of interference with the opium trade by high Chinese Officials having again been raised, the Committee considers this a fitting opportunity for laying before His Excellency certain points in relation to the proposed gradual suppression of the opium business which appear to them worthy of note.

It is not easy to correctly estimate the total amount of opium consumed in China but as is well known the habit is universal and extends throughout the whole of the Empire.

Roughly it may be estimated that the foreign opium imported into China represents about a tenth of the total consumption

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