[This Document is the Property of His Britannic Majesty's Government...
[B]
CHINA TRADE,
CONFIDENTIAL,
[17532]
No. 1.
23670 TRECE 348 [May 30.JPG 4 JUL 07.
SECTION 1.
1
India Office to Foreign Office.-(Received May 30.)
India Office, May 29, 1907.
Sir,
I AM directed by the Secretary of State for India in Council to address you with reference to your letter dated the 5th December, 1906, and subsequent correspondence, relative to the proposals made by the Chinese Government for restricting the importa- tion and consumption of foreign opium. I am also to forward, for the information of Sir Edward Grey, a copy of a letter from the Government of India in which the effect of the scheme, if brought at once into full operation, on the revenues and agriculture of India is examined, and suggestions made for giving it a more limited and tentative shape, consistent with the principle that the reduction of the import of Indian opium shall take place pari passi with reduction in the production and consumption of Chinese opium.
2. The three proposals in the scheme which directly concern India are--
(1.) That taking the average import of opium into China for the five years 1901- 1905 as a basis, the import in 1908 shall be restricted to nine-tenths of this quantity, and a like reduction of one-tenth shall be made in each subsequent year until the trade be extinguished by 1917.
(2.) That a Chinese official shall be stationed at Calcutta to watch the auction sales aud exports of opium.
(3.) That the Chinese Government should increase the present consolidated import and li-kin duty of 110 taels per picul of foreign opium to 220 taels.
3. It will be seen that the Government of India have no objection to (2) provided that it is clearly understood that the Chinese official will have no power of interference of any description. With regard to (1), the Government of India are willing, if it bo thought necessary, to restrict the export of opium from India in 1908 to 48,000 chests of Bengal opium and 12,000 chests of Malwa opium. The quantity of opium exported of late to China and other countries is returned at 52,800 chests of Bengal opium and 19,000 chests of Malwa opium, or 71,800 chests in all. The proposed limitation of the export to 60,000 chests from 1908 is thought to be a very substantial reduction on this figure, and the view of the Government of India is that such a standard ought to satisfy the Chinese Government for the present, and until the effect of the measures taken in China to diminish the production of native opium can be accurately ascertained. With regard to (3), the Government of India express themselves opposed to an increase in the present rate of import and li-kin duty. It is urged that the proposal cannot be maintained on moral grounds, or as having the effect of a measure of prohibition, as inasmuch as it would merely result in a transfer of revenue from the Indian to the Chinese Treasury, and would not raise the price of Indian opium to the Chinese consumer. It is further urged that the evidence is opposed to the view that a higher rate of taxation on Chinese opium has up to date been effectively imposed throughout China.
4. The two important questions, so far as India is directly concerned are, therefore, the restriction to he placed on the quantity of opium imported into China, and the future rate at which the consolidated import and li-kin duty is to be levied at Chinese ports on foreign opium. I am now to state the conclusions at which the Secretary of State for India in Council has arrived on these points, after giving the subject his most careful consideration.
5. As regards restriction of import two separate points present themselves for consideration. First, the method of applying the restriction; and secondly, the degree of rapidity with which it is to be enforced.
8. The intention of the Chinese Government would seem to be to limit by Imperial Law and by Treaty Regulations the aggregate quantity of foreign opium
[2475 gg-1]