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falling off in local sales. "The opium farmer," he added, "himself realises that 30 dollars per tael could only result in extinction of the business altogether or fraud on a colossal scale. In the few cases where he enforces the tax he accepts analyses of probably fraudulent samples without question. Apart from the practicability or otherwise of the 30 dollar tax, it would seem that it is wrong in theory. The tax on opium is 3 dollars per tael, the tax on morphia 30 dollars for the same quantity, yet the dose of opium is only four times that of morphia; thus the latter, though only four times as potent in its effect as the former, is taxed ten times as much, From a theoretical point of view, the tax on morphia should be 12 dollars, not 30 dollars."
The Government analyst, whom Mr. May consulted with regard to this matter, stated that, owing to other constituents in opium which have their effect, he would be inclined to say that the effect on the consumer of an equal quantity of morphine and opium is only as 3 to 1. Mr. May, therefore, recommended the reduction of the royalty on morphine from 30 dollars to 9 dollars per tael. Sir F. D. Lugard decided in these circumstances to fix the royalty payable to the opium farmer on morphine at 10 dollars per tael, i.e., about 200 per cent. of the value of the drug, and effect was given to this decision in section 8 of ordinance No. 16 of 1909, which was passed by the Legislature on the 24th of last June. In section 51 (4) of ordinance No. 23 of 1909, passed by the Legislative Council on the 1st instant, the royalty on morphine has been retained at 10 dollars per tael, but that on opium has been raised from 3 dollars to 4 dollars per tael upon the representation of the opium farmer, that next year the price of opium is certain to be not less than 4 dollars per tael.
"Lord Crewe, in despatch No. 160 of the 18th ultimo, expresses the fear that the effect of the reduction of the royalty" will be to decrease the price at which morphine can be sold, and possibly to lead to an increased sale of the drug." But, in the first place, as stated in Mr. Humphreys's letter above quoted, the royalty of 30 dollars per tael has not as a general rule been collected by the opium farmer, for chemists and druggists in the colony have entered into private agreements with him to pay less; and in the next place, as pointed out by the Chamber of Commerce, the opium farmer's monopoly was never intended to cover the sale of the drug as medicine, and the royalty was imposed in order to prevent the abuse of morphine or compounds of opium as substitutes for prepared and dross opium, not in order to restrict legitimate medical use of these drugs.
This Government, however, while reducing the royalty payable to the opium farmer on morphine, has at the same time adopted very stringent measures to restrict the use of the drug to legitimate purposes, For example, at the date when ordinance No. 10 of 1904 was passed, the registrar-general reported that there were some eighty-three firms in the colony dealing in opium pills and opium wine, and that of these eighty-three there were five which dealt in these articles exclusively. But in November 1908 there remained as licencees only twenty-six firms which had been in business in the colony prior to the passing of ordinance No. 10 of 1901, while only five firms, all of them European (4. S. Watson & Co., Emil Niedhardt, W. Shewan & Co., A. Rumjahn & Co, Watkins Limited), had been added to the list since the passing of the ordinance; and no firm remained which dealt exclusively in opium pills and opium wine.
with
On the 18th December, 1907, Mr. Tratman, as representative of this Government, and Mr. A. H. Todd, as representative of the opium farmer, and again on the 3rd November, 1908, the same representative of this Government, Mr. G. Hoggarth, as representative of the opium farmer, reported the results of investigations made by them under directions from this Government into the methods of licencees under ordinance No. 15 of 1906. In view of their reports it was decided at a meeting of executive council on the 12th of last February that six of the licences granted should be cancelled forthwith for breach of the conditions under which they were issued, and that all the other licences should terminate on the 28th February, 1910. There remain at the present time only eighteen licencees: and these were all informed on the 23rd of last February that their licences would be cancelled on the 28th of next February.
On the 1st March, 1910, ordinance No. 23 of 1909 will come into operation, and under section 51 of that ordinance the licensing authority will be the principal civil medical officer, the total number of licences for importing for sale or use within the colony, preparing, manufacturing, or dealing in morphine and compounds of opium and the conditions of such licences" being determined by regulations to be made by the governor in council. It is proposed to grant only a very small number of such
5
licences and to impose such conditions as will make it impossible for the drug to be used for other than legitimate medical purposes.
The check on the illegitimate use of morphine will therefore in future be not an exorbitant royalty which, if collected, would make the cost of medicines containing locally to a few reputable chemists and druggists under the immediate control and morphine prohibitive, but the restriction of the grant of licences to deal in morphine
supervision of the medical officers of the Government.
Sir,
September 20, 1909.
Enclosure 4 in No. 1.
Colonial Office to Board of Trade,
C. CLEMENTS.
Downing Street, January 1, 1910. I AM directed by the Earl of Crewe to transmit to you, to be laid before the Board of Trade, a copy of a despatch from the Governor of Hong Kong* with regard to the exportation of morphine from the United Kingdom.
2. Lord Crewe would be glad to be informed whether it is the intention of the Board to deal with the matter by legislation in the near future.
I have, &c.
0
Enclosure 2 in No. 1.
II. BERTRAM COX.
183