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Inclosure 1 in No. 1.
Bir J. Jordan to Wai-wu Pu.
Your Highness,
Peking, August 12, 1907. THE proposals of the Chinese Government for restricting the importation of opium, as embodied in the Memorandum which was handed to me on the 29th November, 1906, by the Ministers of the Wai-wu Pu, were transmitted by me to His Majesty's Govern- ment, and have been carefully considered by them in consultation with the Government of India.
I now have the honour to communicate to your Highness the views of His Majesty's Government on this subject -
1. The Chinese Government proposed that the importation of foreign opium should cease within ten years, and with this end in view should be reduced by one-tenth per
annum.
With regard to this His Majesty's Government make a counter proposal. Instead of the amount of opium imported into China being restricted, they are willing to limit the amount exported from India to countries beyond the seas. The average total annual export for the years 1901-5 having been 67,000 chests, of which China took 51,000; they propose, during the next three years, to diminish annually the total amount exported by one-tenth of the average amount taken annually by China: thus, in 1908 the amount exported would be limited to 61,900 chests, in 1909 to 56,800, and to 51,700 in 1910. If during these three years the Chinese Government have duly carried out their arrangements for diminishing the production and consumption of opium in China, His Majesty's Government undertake to continue in the same proportion this annual diminution of the export after the three years in question.
The restriction of the import of Turkish, Persian, and other opium would have to be separately arranged by the Chinese Government and carried out simultaneously.
2. The Chinese Government propose that they should appoint an officer to proceed to Calcutta for the purpose of watching the opium auctions and the packing, in order to ascertain the actual quantities of foreign opium delivered for export. To this His Majesty's Government have no objection, provided it is understood that such officer shall have no power of interference.
3. The Chinese Government represent that foreigu opium, though stronger than the native drug, is more lightly taxed; and they propose as a restrictive measure, and not with a view to increasing their revenue, to impose upon it a prohibitive duty and li-kin charge of 220 taels per picul.
In regard to this, I have the honour to inform your Highness that I am authorized to discuss the proposal of doubling the present consolidated duty and li-kin from the point of view that foreign opium should be subject to as heavy taxation as native, but before His Majesty's Government are prepared to arrive at a conclusion on this question, they consider that trustworthy information is necessary on the three following points, namely
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(a.) Is the new taxation of 115 taels per pical effectively levied on all native opium in China?
(b.) Has it doubled or largely increased the taxation hitherto levied ?
(c.) What is the relative value of Indian and native opium?
In order to comprehend justly this question of the actual value of imported opium as a product, it will be of assistance to your Highness' Board to bear in mind that the price of Indian opium in the Hong Kong market is not the natural price of the article, but includes the Bengal monopoly tax, or the Malwa pass duty, which amounts to 433 taels per picul in case of the former, and 264 taels in that of the latter.
As regards the statement that the strength of imported opium is double that of the Chinese article, the Government of India is not satisfied that this is the case, since the methods of cultivation in China are said to have been much improved in recent years.
4. As regards the preparation of boiled opium in Hong Kong, and the proposals of the Chinese Government for preventing its import into China, my information is not yet complete, and I must therefore defer taking a reply upon this point.
5. With regard to the measures to be taken in the foreign Settlements or Conces- sions for the prohibition of opium dens and the inspection of shops for the sale of opium and smoking appliances, the view of His Majesty's Government is that if effective steps
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have been taken by the Chinese authorities beyond the limits of such Settlements or Concessions, the municipal authorities of these localities should also take effective steps on their own initiative without awaiting the request to do so from the Chinese authorities.
Instructions in this sense have been sent by me to His Majesty's Consuls in the ports where British Concessions exist, and also to His Majesty's Consul-General at Shanghae. But I should state, for the information of your Highness, that considerable doubts have been expressed by competent observers as to the efficiency of the measures taken in various ports by the Chinese authorities, and it is alleged that the closing of the smoking dens has merely converted them into retail opium shops, with the result that the consumption of opium is undimished among the lower classes.
6. The question of prohibiting the general importation of morphia is one in which His Majesty's Government are fully prepared to co-operate as soon as the consent of all the Treaty Powers has been obtained.
(Circular.) Sir,
I avail, &c. (Signed)
J. N. JORDAN.
Inclosure 2 in No. 1.
Sir J. Jordan to His Majesty's Consuls in China.
Peking, August 10, 1907. AS reliable information regarding the price, strength, and taxation of native opium is desirable, I have to request that you will furnish me with answers to the following questions, so far as they concern your district :---
1. What is the price per picul of raw opium produced in your district before taxation of any kind has been paid ?
2. What is the average amount of boiled or prepared opium yielded by 1 picul of raw opium? If possible, compare this amount with that yielded by Indian opium.
3. How much more of the native prepared opium does a smoker of Indian opium require to smoke to produce the same effect? If a smoker consumes 3 mace of Indian opium a day, how much native opium would he consume to obtain equal results ?
4. Is the tax known as "tung-shui," or "tung-chuan," amounting to 115 Kuping taels per picul, levied on all raw opium produced in your district, whether consumed locally, transported from place to place in the district, or exported from the district ?
5. If the "tung-shui," or "tung-chuan," tax is not levied in your district, what other taxes are imposed, if consumed locally and if exported ?
6. If the "tung-shui," or "tung-chian," tax is not levied in the province of production, is it levied when the drug passes into another province ?
7. Is raw native opium which has paid "tung-shui," or "tung-shuan," elsewhere liable to further taxation in or when passing through your district ?
8. Is there an excise or tax on prepared native opiuma? If so, how much, and how is it levied ?
9. Has any attempt been made to establish an official monopoly or monopolies for the purchase and [or] preparation of opium, foreign and [or] native, within your district ? If so, please state what has been done.
I am, &c. (Signed) J. N. JORDAN.
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