DUGUNOITU IS
CHINA TRADE.
CONFIDENTIAL
[33109]
No. 1.
[October
9508
432
REC SECTION
REG
NOV 07
Sir J. Jordan to Sir Edward Grey.-(Received October 5.)
(No. 401.) Sir,
Peking, August 20, 1907. REFERRING to my despatch No. 376 of the 6th August and subsequent telegrams, regarding the establishment of a Government opium monopoly at Nanking, I have the honour to inclose copies of the note which I have addressed to the Chinese Government on this subject, stating that this project involves an infraction of Article V of the British Treaty of Nanking and of Article XIV of the French Treaty of Tien-tsin, and inviting the serious attention of the Chinese Government to the danger of allowing independent action on the part of the provincial authorities in a matter which is under consideration by the British and Chinese Governments.
I have the honour to inclose also a copy of a further despatch which I have received from His Majesty's Consul at Nanking, forwarding copy of the proposed Opium Monopoly Regulations. Mr. Ker states that they have not yet been published.
I bave, &c. (Signed) J. N. JORDAN.
Inclosure 1 in No. 1.
Sir J. Jordan to Prince Ch'ing.
Your Highness,
Peking, August 19, 1907. I HAVE received from His Majesty's Consul at Nanking a number of reports regarding the proposed establishment by the authorities of the Liang-kiang Province of a Govern- ment monopoly for the sale of prepared opium. From these it appears that the scheme for such a monopoly was originally to have been carried out by merchants under official control, since the purchase by Government of the necessary stocks of opium would have involved too great an outlay.
Ou reconsideration it was, however, decided that if such a matter were intrusted to merchants, evasion and delays might arise, and that it was after all necessary that Government should find the funds required.
Under orders of the Viceroy, an Office has accordingly been established, under the name of the Kiangnan Head Anti-Opium Office for the Monopoly of the Sale of Government Prepared Opium. This Office is placed under the control of the Provincial Treasurer at Nanking, and derives its working capital of 500,000 taels from the Yuning Government Bank. Its object is to purchase raw opium, conduct the sale of prepared opium, and suppress the use of the drug.
By Article 3 of its Regulations, all opium is to be purchased exclusively by this Office from the wholesale dealers, who will be licensed for this purpose, and who will not be allowed to sell to the public. Small dealers, whose resources are insufficient to undertake this trade in raw opium, are to be permitted, under licence, to become agents for the Government Office in the retail sale of prepared opium.
It has been pointed out by His Majesty's Consul to his Excellency the Viceroy Tuan that, in view of Article V of the Treaty of Nanking, the restriction of the sale of raw opium to the Government Office or its licensed dealers would appear to be irregular; and urgent representations have been made to His Majesty's Consul-General at Shanghae by the principal importing firms, complaining that the establishment of this monopoly has led to the closing of the business on the part of several wholesale native dealers, with the result that outstanding orders are being cancelled, and large stocks are left on the hands of the importing firms, who have already suffered considerable losses by the fall in the price of foreign opium since the establishment of this monopoly was proposed.
The reports of His Majesty's Acting Consul-General at Chengtu and newspaper extracts which have been sent to me show further that similar monopolies are contem- plated in Szechuan, Hupei, and Kiangsi. I have therefore considered it my duty to inquire of His Majesty's Government by telegraph whether they concur in the view that
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