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

2

This, I take it, means that on every picul of opium exported through the Maritime Customs at Chungking that Department will be allowed 20 taels of the 27:28 taels already collected by the Li-kin Administration.

Szechuan therefore withdraws from the native opium "Zollverein" inaugurated in July last, and by so doing relieves opium consumed within the province of the burden of the "tung chuan," while increasing the taxes on opium destined for consumption in other provinces. I presume the Hupei authorities will continue to levy the full

t'ung chuan" of 115 taels at Ichang

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I am forwarding this despatch under flying seal to His Majesty's Consuls at Chungking and Ichang.

I have, &c.

(Signed)

HARRY H. FOX.

Inclosure 2 in No. 1.

Proclamation re Duty on Opium issued by the Li-kin Head Office at Chengtu, July 4, 1907.

(Translation.)

THE Office is in receipt of a telegram from the Board of Revenue ordering the cessation of the general opium tax ("tung shui") and the closing of the opium collectorates. The Province of Szechuan is further permitted to revert to the former scale of taxation.

This reduction of taxation is the result of energetic telegraphic representations made to the Board of Revenue by his Excellency Chap, the Acting Viceroy, in pursuance of his anxious desire for the amelioration of the difficult position in which the opium merchants at present find themselves.

His Excellency has transmitted the Board's instructions to this Office for communi- cation to the opium sub-offices. In addition to forwarding these Notifications, it is our duty to publish the following Proclamation for the information of all opium merchants :--

Hereafter, all opium, whether purchased for local consumption or for export, will pay one tax of 27-28 taels per picul, payment to be made in the new tael as prescribed by the Board of Revenue. The railway tax of 5-29 taels will still continue to be paid in Szechuanese taels. Opium reported to the Chungking Customs for export will be required to pay a sum of 7:25 Board of Revenue taels to make good the deficiency (on the customs duty). No further payment will be required, and merchants are authorized to charge before this Court any clerk or police officer who may attempt to levy illicit charges or otherwise subject them to inconvenience, when the offender will be severely punished. The public are, however, warned that any false accusation will render them liable to a similar punishment.

The common sense of the opium merchants will, the Office feels assured, convince them that they should be grateful for the present reduction of taxation. They ought, therefore, to pay the tax freely and refrain from any attempt to evade payment, which will certainly entangle them in the meshes of the law. Strict obedience is therefore enjoined on one and all.

Chengtu, July 8, 1907.

CHINA TRADE.

CONFIDENTIAL.

[26896]

(No. 164.) Sir,

No. 1.

Sir Edward Grey to Sir C. MacDonald.

[August 19.]

SECTION 2.

Foreign Office, August 19, 1907. I TRANSMIT to your Excellency herewith a copy of a despatch which I have received from His Majesty's Minister at Peking, reporting that the Spanish and German Governments have consented to the prohibition of the importation of morphia into China.

The consent of the Japanese Government appears now alone to be wanting before the prohibition can be enforced.

I should be glad if your Excellency would ascertain whether their consent is likely soon to be forthcoming.

I am, &c.

(Signed)

E. GREY.§

Sir J. Jordan, No. 306, June 26, 1907.

[2623 t-2]

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