2

The considerable losses which we have already suffered, and the further heavy losses which are likely to accrue on our large holdings if the monopoly is allowed to be enforced, have resulted from the action of the Chinese Government, which is in direct contravention of Article V of the Treaty of Nanking of 1842, and Article XIV of the Treaty of Tien-tsin of 1858 between France and China, and which is calculated to ruin the trade in foreign opium, with the intention apparently of pushing the consumption of native drug. In view of the above fact we consider that it would be only just that we should be indemnified by the Chinese Government for the losses which we have had to bear, and for any subsequent losses which may arise if immediate action is not taken to abolish the monopoly.

The intention of the British Government was the gradual reduction of the opium trade and its ultimate abolition in the space of ten years, whereas the action of the Chinese Government is to suddenly extinguish the trade in foreign opium, and thereby cripple the resources of all those who are interested in it, instead of endeavouring to decrease the large areas in the interior under poppy cultivation. We therefore earnestly request you to take immediately such action as you deem necessary to bring the monopoly to a speedy termination, and would beg you to give us, as soon as possible, information as to the result of your action, so that we may know how to regulate our purchases at the Government of India's monthly auction sales.

(Translation.)

Inclosure 2 în No. 1.

The Swatow Opium Guild in Shanghae to Importers of Opium.

[Undated.] WE have been continually receiving advices from our constituents in various countries that the sale of opium is to be conducted by the officials according to the Nanking Regulations. It has been arranged that the preparation of opium is to commence at Nanking on the 22nd of this Chinese moon, namely, the 31st instant; and on the first day of the 7th Chinese moon, viz., the 9th proximo, offices for the sale of prepared opium to the public will be opened by the officials. Some wholesale dealers of good standing in the interior have already wound up their business, fearing that the monopoly may render it impossible for them to get rid of their opium. Formerly they were under the impression that only opium-smoking dens were to be closed, and had no idea that a mouopoly would be established. We are afraid that our constituents will not be able to recover the money against the opium sold by them on credit to retail dealers, and consequently they may not be able to pay off the balance of their indebtedness to us. For this reason they are trying to cancel their previous orders. Employés of the opium monopoly bureau have already purchased from various countries utensils for preparing opium, and workmen have been engaged and sent to Nanking to carry out the work. The head office is established at Chu Chow. Szechuan opium has been sent to Nanking, while over 100,000 tael weight of opium which would make up 100 chests has been sent over from Taushan.

You will therefore observe that these are sufficient proofs that a monopoly is being established. We are therefore very much afraid that our business will soon have to stop, in which case we shall not be able to fulfil our outstanding contracts with you, as we shall not be able to find any outlet for our uncleared bargains of opium.

(Signed) Opium Guild.

Ofice or Individual.

Foreign

1907

1 Sept

1st previous Paper.

Fo 82445

HONG KONG

N33223

(Subject.)

Affairs of

"China Railways

Pruiti

of further

(Minutes.)

Mr. Stubbs

Rec

91

DOMESTIC.

C O

33223

Ref 17 SEP 07

Prunks in this Except

25 July BHK

on

2

34181

Sever LF

a.1.1/10

Me prats

TEEL (76)-90008-25000-11-

ext subsequent Paper.

70 34181

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