This Document is the Property of His Britannic Majesty's Government.]

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consultation with their expert advisers, that the attainment of these objects would be facilitated were the proposed scope and procedure amended in certain respects.

In proposing a Commission the American Government, it is understood, had in view the investigation of the opium trade and the opium habit in the Far East, with the object of arriving at a decision as to whether the consequences were not such that civilized Powers should do what they could to put a stop to it. A preliminary investigation of the facts by means of a Commission, before the subject of restrictive and repressive measures could be profitably considered, was also pronounced to be necessary by the French Foreign Office in their note of the 3rd July, 1907, which you were good enough to communicate to me on the 30th October last.

In the opinion of His Majesty's Government a Commission sitting at Shanghai would be well placed for making the detailed inquiry, advocated in that note, into 'the production, commerce, use, and disadvantages of opium' in the Far East, and its findings on the facts would be in the highest degree valuable and important. I therefore venture to suggest that this aspect of the Commission's duties should be brought out in the instructions to be framed for its guidance. The findings of the Commission on the facts would naturally govern the nature of its recommendations.

His Majesty's Government consider that its labours would be expedited if the Representatives of the several Governments were first to acquaint themselves fully with the opium question as it presents itself in their respective countries, and were thus in a position to inform the Commission when it assembles as to the regulations and restrictions there in force, and to formulate and discuss proposals for amending them in points in which they may be found in the course of the joint inquiry to affect the opium trade and the opium habit in the Far East. If this view of the procedure to be followed commends itself to the American Government and to the other Powers, the instructions outlined in your Excellency's note of the 8th May will perhaps be reconsidered. As these instructions at present are worded, they would require the Delegates of the several Governments to undertake a more responsible and extensive investigation than time permits, and to make proposals for altering the administrative regulations of their respective countries before the Commission had entered upon its inquiry or had ascertained the precise nature of the remedies which the present circumstances of the opium trade and the opium habit in the Far East may require.

As regards India and the other British territories concerned, the opium question has already formed the subject of investigation by Commission or of instructions from His Majesty's Government, and it is therefore unnecessary, as far as this country is concerned, that a fresh investigation should be conducted for the investigation of facts which are already well known. The British Representatives would be ready to meet the other Commissioners when the latter had concluded their inquiries, and to place the result at their disposal.

I shall be grateful if your Excellency will submit these suggestions to the consideration of the American Government, and will communicate to me in due course their final wishes as to the scope of the Joint Commission and the procedure to be followed by it.

Foreign Office, August 1908.

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CHINA TRADE, CONFIDENTIAL.

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[July 22.]

SECTION 1.

No. 1.

Sir J. Jordan to Sir Edward Grey.-(Received July 22.)

(No. 285.) Sir,

Peking, June 24, 1908. WITH reference to my despatch No. 555 of the 27th November, 1907, I have the honour to transmit to you herewith a second General Report on the opium question by Mr. Leech, Councillor to His Majesty's Legation.

Mr. Leech has devoted much care and attention to the preparation of this Report, and the conclusions at which he has arrived may be accepted as an earnest attempt to form an impartial estimate of the situation after an exhaustive examination of all the evidence available,

I have, &c.

(Signed) J. N. JORDAN.

Inclosure in No. 1.

Second General Report by Mr. Leech on the Opium Question.

SINCE the end of November last, when the previous General Report on the anti-opium movement was written, the two most noticeable features have been the continued interest and energy shown by the Central Government in the question as compared with the growing apathy evinced by the provincial officials and their lack of sustained effort to eradicate the evil.

In contrast to this there is the gratifying evidence from many provinces of the reduction of the area under poppy cultivation. This reduction, which varies greatly according to local conditions, seems to be as much a voluntary step on the part of the farmers, prompted by self-interest and fear, as the result of official exhortation or of a desire to obey the authorities.

The poppy is easily distinguishable, especially when in flower, and the dread of increased taxation, fines, punishment, or destruction of the crop seem to have been powerful motives in bringing about this reduction, which, though slight in actual amount, is fairly general throughout the Empire; though it is only fair to admit that in some instances the personal energy and determination of the local authorities have been the direct causes.

No proposals for compensation are contemplated to those who are called upon to abandon a hitherto legitimate and lucrative form of agriculture, chiefly carried on in remote districts, where the farmers will no doubt experience considerable difficulty in finding other remunerative crops owing to the expense of transport.

This hardship will be lessened by the gradual operation of the Decree which gives ten years as the limit for total cessation of cultivation, but it may reasonably be anticipated that discontent may show itself in some form or other, and it is doubtful if the energetic Viceroy of Yunnan was acting prudently in reducing the time limit of total cessation of poppy cultivation from ten to three years.

The energy and interest of the Central Government is manifested in several new Decrees. That of the 22nd March, 1908, in response to a Memorial presented by the Wai-wu Pu (Appendix (A)), drew attention to the evils inseparable from the use of opium, and emphasized the sympathetic help which China had received from His Majesty's Government in her efforts to suppress the opium habit.

The Boards of Finance and of the Interior were instructed to prepare supervisory Regulations for the approval of the Throne, together with strict measures for their enforcement, and a strict investigation was to be made in regard to the steps taken by the provincial authorities to obey the earlier Decrees.

Reports were to be furnished by each province at the close of each year as to

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