[This Document is the Property of His Britannic Majesty's Government.]
CHINA TRADE.
MARIE DE CONFIDENTIAL.
[4951]
No. 1.
10574
RECR
Rrd 25 MAR 08
[February 12.]
SECTION 1.
Sir,
India Office to Foreign Office.—(Received February 12.)
India Office, February 11, 1908.
I AM directed by the Secretary of State for India in Council to acknowledge the receipt of your letter of the 27th ultimo on the subject of the restriction of import of Indian opium into China.
In reply, I am to say that the Government of India will be informed that the Chinese Government, in lieu of their original proposal to restrict, by direct measures taken at the ports, the quantity of foreign opium imported into China in each year, have accepted the counter-proposal of His Majesty's Government that, as regards Indian opium, the restriction shall be of an indirect nature, and will be enforced by the Indian Government, which will limit the quantity of opium exported beyond seas to 61,900 chests in the present year, 56,800 chests in 1909, and 51,700 chests in 1910.
The counter-proposal was stated to be contingent on arrangements for the restriction of the import of Persian, Turkish, and other opium being made and brought into operation by the Chinese Government. I am to ask that information as to the measures which may have been taken in this respect may be obtained from His Majesty's Minister. I am, however, to say that the Government of India will be instructed to enforce immediately the restrictive measures which have been agreed to on behalf of India, without insisting on the prior fulfilment of the conditions that similar restrictions would be simultaneously enforced in respect of the import of non-Indian opium.
I am to suggest, for Sir Edward Grey's consideration, that when the discussion about raising the import duty on foreign opium is resumed by the Chinese Government, His Majesty's Minister might conveniently invite that Government to define and limit, as part of any arrangement that might be concluded, the powers of the Provincial Governments as regards the levy of licence or consumption taxes under clause 5 of the Additional Article to the Chefoo Convention, so as to secure the provisions of that Agreement from infringement. Attempts have been made to collect the "prepared opium" tax from others than the actual retailers, to convert it into a tax on unopened chests, or to make it fall more heavily on foreign than on native opium, and these attempts have given rise to considerable friction. If the consolidated duty payable at the ports is to be enhanced, it seems desirable that, in return, the Imperial Chinese Government should give some guarantee that opium which has paid the import duty shall not be unfairly taxed, against the terms of the Additional Article, by the Provincial Governments.
I am, &c.
(Signed) A. GODLEY,
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