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The object to be aimed at then is to put up the price of native opium (which forms 7/8 or 10/11 of the whole), and this will have the effect of stopping smuggling to Hongkong. Though it is not a matter which affects this Government, it is clear that it would also have the effect of curtailing the use of opium and of providing a revenue.
It is not for me to suggest by means of what taxes or restriction of cultivation &c., the object in view can best be achieved. I limit myself to pointing out that the pledge given by China is being daily violated, and to suggesting that which appears to me to be the only practicable method of carrying out that pledge.
I am transmitting a copy of this despatch to Sir J. Jordan.
I have the honour to be,
Sir,
Your obedient servant,
Fred Lugard
Governor
Enclosure
Summary of Licences of Opium