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KANALÁÖNNEN LEA

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Various reasons are assigned for this unexpected revival of activity on the part of the Canton authorities, the most likely being that it is due to the impending arrival of the new Viceroy, who is known to be an advocate of strong measures for the suppression of opium smoking.

The opium dealers of Canton, who have practically gone out on strike and have refused to import or sell another ball of opium until their friends are released, regard the present action of the authorities as the beginning of a movement to make the sale and preparation of opium a Government monopoly.

They say that if the rule regarding the production of a special permit for every purchase of opium is strictly enforced, they will be obliged to close their shops, as it will be quite impossible for them to carry on business under such irksome restrictions.

I explained in a previous report the manner in which sales to country customers were effected.

I am addressing a further despatch to the Acting Viceroy on the subject of the reported formation of an opium monopoly in the Nam Heung prefecture, referred to in Messrs. Sassoon's letter, copy and translation of which will be forwarded to you due course.

I trust the action I have taken in this matter may meet with your approval.

Sir,

Inclosure 2 in No. 1.

I have, &c.

HARRY H. FOX.

Messrs. Sassoon and Co. to Acting Consul-General Fox.

in

Hong Kong, August 25, 1909. WE beg to acknowledge the receipt of your favour of the 24th instant, contents of which have our careful attention.

We note that one of the Viceroy's secretaries said he would do his best to get the release of the men connected with the Chuen Fook Cheong opium hong, and we trust this will be done without delay. In the meantime our trade is disorganised. Business for the Canton market is entirely at a standstill, and deliveries have ceased. A trifling sale has been made for local requirements at a decline of 15 dollars per chest, and the Calcutta market has declined 30 rupees, from 1,350 to 1,320 rupees per chest. The fact that the Chinese have stopped shipping to Canton is very serious. It involves the importers in losses in interest and charges, and an increased risk in view of the decline in prices. We would request you to kindly bring this dislocation of our trade to the attention of the authorities, and to insist on them being released without delay.

Another interference with the opium trade has also been brought to our notice to-day. It appears that a monopoly is being attempted in the Nam Hung prefecture. The sole power to sell prepared opium is being conferred on a company, to the exclusion of all other retail dealers, who are ordered to close their shops. Further- more, every holder of raw drug is required to pay a tax, the amount of which is not yet known, based on the quantity of prepared opium that can be obtained from a ball of the raw drug.

We telegraphed to you this morning as follows :--

"Prices declining. Deliveries Canton ceased. Reported Nam Hung prefecture attempting monopolies and taxing raw opium.-SASSOONS."

The heavy stocks in the hands of the importers here, in Shanghae, and Calcutta render our position a very serious one, and the stoppage of deliveries and the decline in prices cause us serious concern. We have no doubt that you will bring all these points forcibly to the notice of the authorities, and point out to them that they cannot at their will violate the treaties and place British merchants engaged in the opium trade in a position of insecurity.

We beg to again tender you our best thanks for all the steps that you are taking on our behalf.

We have, &c. David Sassoon and Co. (Limited),

E. SHELLIM, Manager.

Inclosure 3 in No. 1.

Acting Consul-General Fox to Acting Viceroy Hu,

Your Excellency,

Canton, August 25, 1909. ON the 6th July 1 had the honour to address a despatch to your Excellency, in which I asked your Excellency to renew the assurance given by your predecessor that the new regulations for the control of the purchase and sale of raw opium would not interfere with the wholesale trade carried on between the British importers in Hong Kong and the Cantou dealers.

On the 16th instant I had the honour to receive your reply informing me that you had instructed the Opium Prohibition Bureau to investigate the matter and take action accordingly.

I now learn that the Bureau have suddenly and without warning seized and thrown into prison an opium dealer, trading under the style of Chr'uan Fu Chang at Hing Loong Street, Canton, who although himself provided with a licence in accordance with the regulations, sold opium to a person who had omitted to take out a permit. In consequence of this opium dealers in Canton have become alarmed, imports of Indian opium from Hong Kong have ceased entirely and the trade is disorganized.

I learn further that the Opium Bureau have the intention of levying additional taxes on both raw and prepared opium, amounting to some 26 taels per ball.

I have the honour to observe that, with regard to this matter of opium pro- hibition, I have received explicit instructions from His Majesty's Minister in Peking that foreign opium should be excluded from the operation of any regulations dealing with the wholesale trade. I have been directed to inform your Excellency that no protest will be made as long as the licensing regulations are carried out in a proper spirit and in such a manner as not to interfere with the wholesale trade between the British importer and the native purchaser.

The action of the Opium Prohibition Bureau in suddenly arresting this opium dealer, and the consequent stoppage of business in raw opium, constitutes a serious interference with the normal course of trade, and it is my duty, therefore, to protest formally against the Bureau's action.

As regards the proposed additional taxes on raw and prepared opium, I would remind your Excellency that to tax imported opium while still in its package is contrary to treaty, and that in the case of prepared opium it has ou more than one occasion been settled by our respective predecessors that such taxes can only be imposed with the sanction of the Wai-wu Pu and the consent of His Majesty's Minister in Peking.

The bureau would therefore appear to be acting precipitately in this matter and without first consulting the higher authorities.

I have therefore the honour to request that your Excellency will give this matter your serious consideration and, if the facts are as stated, issue stringent instructions to the bureau concerned not to interfere with the wholesale trade in Indian opium between Hong Kong and Canton.

This trade, by agreement between our respective Governments, is being reduced in volume every year, and prohibitive measures on the part of the Canton Opium Bureau are therefore uncalled for and only tend to disturb the friendly relations which so happily exist between Great Britain and China at the present time.

I have, &c.

Inclosure 4 in No. 1.

Sir J. Jordan to Prince Ching.

HARRY H. FOX.

Your Highness,

Peking, September 16, 1909. I HAVE at various times during the past year invited the attention of the Chinese Government to the measures taken by provincial authorities for controlling the sale and consumption of opium, and your Highness was so good as to assure me in your note of the 22nd April that the stringent prohibition of opium, which was being enforced in Chekiang and other provinces, did not affect the foreign drug.

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