This Document is the Property of His Britannic Majesty's Government.]
CHINA TRADE.
CONFIDENTIAL.
45017 [November 16.]
8 DEC 08 SECTION 3.-
397
[39933]
No. 1.
Sir J. Jordan to Sir Edward Grey.-(Received November 16.)
(No. 464.) Sir,
Peking, October 21, 1908.
I HAVE the honour to report that on the 24th September I received a telegram from the Hong Kong Chamber of Commerce protesting against the action of the Canton provincial authorities in introducing new Regulations for the control of the trade in raw opium, on the ground that these Regulations aimed at creating a monopoly in the trade, contrary to Treaty rights, and that they seriously affected British interests. Having no information here of the steps about to be taken in Canton, I telegraphed to His Majesty's Consul-General for a report, and learnt from him on the 27th September that he had protested to the Viceroy on the 24th September against the new Licensing Regulations, which, he considered, virtually created a monopoly in the raw opium trade.
In the absence of more detailed information, I could do no more than represent to the Wai-wu Pu on the 29th September the view which was held locally in regard to the new measures taken by the provincial authorities. The Wai-wu Pu promised to call for a telegraphic report upon the subject, and the result of their inquiries was communicated to me on the 6th October in the note from Prince Ching, of which I have the honour to inclose a translation.
It appeared from this statement that, in pursuance of the "Supervisory Regulations" issued under sanction of the Throne in the spring of this year, of which a translation appears in Appendix C to Mr. Leech's second General Report on the opium question inclosed in my despatch No. 285 of the 24th June, the Viceroy at Canton was proceeding to institute a licensing system for all shops selling raw or prepared opium, and prohibiting the opening of new shops once this registration of existing establishments was completed. The scope of the Regulations was further explained in a telegram from Mr. Fox on the 10th October, transmitting the substance of the Viceroy's reply to his protest. The Viceroy contended that the new Regulations only affected the retail trade, and did not interfere in any way with the wholesale importers. The number of licensed shops had to be limited in order to secure their eventual disappearance, and did not constitute an official monopoly in the trade.
On the following day I received Mr. Fox's despatch of the 29th September, of which a copy is inclosed, setting forth the grounds upon which he had based his objections to the new licensing rules. These objections were, in effect, that the registration of all opium shops and the limitation of their number to that already engaged in this trade would give a monopoly of business to a small ring of Canton dealers, and that such a restriction contravened the Treaty right of British merchants "to carry on mercantile transactions in China with whatever persons they please."
It seemed to me, however, that while the proposed system of licensing and limitation of numbers might be so worked as to create a virtual monopoly, and would require careful watching, it was difficult to object to it ab initio, since some such measure of restriction must be adopted if the use of opium is to be stamped out, and, moreover, the principle that no new shops should be allowed to open was laid down by the Chinese Government in Article 5 of the original proposals in eleven Articles submitted to the Throne in 1906, as well as in the "Supervisory Regulations" of this year. The first of these documents, which formed Annex A to Mr. Leech's Opium Report, has been tacitly accepted as China's programme for the internal prohibition of opium, and, if the Viceroy at Canton carried out his promise to issue a reassuring Proclamation pointing out that his new Regulations only applied to the retail trade, it seemed to me inadvisable to take any further action pending reference to His Majesty's Government.
I accordingly telegraphed to Mr. Fox in this sense on the 14th October, and have since received a communication from the Hong Kong General Chamber of Commerce,
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