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This Document is the Property of His Britannic Majesty's Government.]
CHINA TRADE.
CONFIDENTIAL.
(33092]
(No. 384.) Sir,
No. 1.
319
[October 5.]
SECTION 5.
Sir J. Jordan to Sir Edward Grey.-(Received October 5.)
Peking, August 14, 1907. I HAVE the honour to acknowledge the receipt of your despatch No. 231 of the 14th June last, and to transmit to you herewith copy of a note which I addressed to the Wai-wn Pu on the 12th instant, embodying the views of His Majesty's Government with regard to the proposals of the Chinese Government for giving effect to the Imperial Decree for the abolition of opium smoking.
At an interview which I had yesterday at the Wai-wu Pu, I explained to the Ministers that this communication merely contained a summary of the instructions with which you had furnished me, and that I should be prepared at any time to enter into a fuller consideration of the various points, and explain to them the reasons on which the conclusions of His Majesty's Government were based.
The Grand Secretary Na Tung thanked me for this offer, and intimated his intention of availing himself of it as soon as he had found time to study with sufficient care the contents of my note.
As the further consideration of the question with the Wai-wu Pu will require fuller information on certain points than is at present in my possession, I have issued a Circular to His Majesty's Consuls (copy inclosed) calling for reports on the subject.
In a country where no statistics are published, and where there is great irregularity of procedure in all Departments of the Administration, it is extremely difficult to give anything in the nature of accurate replies to the three questions propounded in your despatch in connection with the Chinese demand for an increase in the taxation of foreign opium.
The following information has been derived from Sir Alexander Hosie, the Acting Commercial Attaché:-
The answer to question (a), as to whether the new taxation is levied on all native opium, is in the negative, for the new tax is not a tax on production, but a transit tax.
(b.) The new tax of 115 Kuping taels may have doubled or largely increased the taxation of opium in transit in some parts of China, but in others it would seem to have resulted in decreased taxation. At Ichang, for example, in the first half of 1905 (ie., prior to the introduction of the uniform tax of 115 taels) native opium, if junk borne, paid 318-93 Haikuan taels per picul in taxes; while, if steamer borne, it paid 134 79 Haikuan taels if destined for the four inner provinces, and 101 Haikuan taels if for the four outer provinces, of the "Kao chúan Zollverein.”
(e) The Government of India state that the cost of production of a chest of opium is about 500 rupees, or 330 dollars. From the Mengizu Trade Report for 1906 it appears that native opium was bought on the farms near Yunnan-fu for 288 to 320 dollars per picul, the picul being little less than a chest, while at Mengtzu the price was 480 dollars. At Ichang, in 1905, the f.o.b. price of Szechuan opium is given as 340 Haikuan taels per picul, and if taxation of 134 79 Haikuan taels is deducted, the cost of production is 205-21 Haikuan taels, or 308 dollars. On the whole, therefore, it would appear that there is little difference between the cost of production in India and China.
As regards the strength of Indian and Chinese opium, I have been given to under- stand that the former yields from 10 to 15 per cent, more prepared opium, and that a smoker of 3 mace weight a day of Indian opium requires 4 mace of Chinese opium to produce the same effect.
The replies from the Consulates will, I hope, enable me to submit to you more detailed information on these various points.
I have, &c.
(Signed)
J. N. JORDAN.
[2077 e-5]