[This Document is the Property of His Britannic Majesty's Government.]
378
OPIUM,
CONFIDENTIAL.
(July 7,
22504
SECTION 1. 22 10)
[24489]
Sir,
No. 1.
Messrs. E. D. Sassoon and Co. to Foreign Office.—(Received July 7.)
9, Fenchurch Avenue, London, July 6, 1910. WE have the honour to acknowledge receipt of your letter of the 1st instant, informing us that His Majesty's chargé d'affaires at Peking has notified the Chinese Government that His Majesty's Government cannot accept any regulations which enforce an additional duty on raw foreigu opium in a treaty port. We note that the Wai-wn Pu is calling upon the Canton Viceroy for a report, but, the matter being so urgent, may we express a hope that His Majesty's Government will allow no undue delay on the part of the Chinese authorities. The opium trade in Canton has been at a standstill for nearly three months, and further delay means further heavy loss to British merchants.
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The explanation of His Majesty's consul-general at Canton as to the main object of the tax being "to prevent the storing of large stocks of opium is astonishing, in view of the fact that Hong Kong is the depôt for opium, and no large stocks are kept in Canton. The Chinese dealers never take delivery of their purchases until they are ready to send the opium into consumption, as they not only have to pay for it on delivery, but have to pay the duty and li-kin as well-a very sufficient reason against storing large stocks,
A representative of our Hong Kong house called upon His Majesty's consul-general at Cantou on the 8th ultimo to impress upon him the gravity of the situation, but it is very clear to us that there is some misunderstanding about our representative's views on the matter, seeing that the impression recorded by His Majesty's consul-general is diametrically opposed to the strong opinion held and expressed by both our representative and ourselves.
We learn that at this interview His Majesty's consul-general not only refused to intervene, maintaining that the new tax is no breach of treaty unless it is differential, but even expressed the view that China has a perfect right to take any measures regarding foreign opium, even as far as preventing sale, providing the measures taken are non-differential.
During the past few years the Kwong-tung authorities attempted to levy similar taxes, and were only prevented from doing so by Elis Majesty's Minister at Peking, who held that they were contrary to the additional articles of the Chefco Convention, and in this the then consul-general at Canton concurred. If in the past these taxes were considered to be illegal and an infringement of treaty rights, we cannot under- stand how His Majesty's present consul-general can maintain that in the present, instance such is not the case.
The payment of duty and li-kin is, according to the treaty, to free the opium from any further taxation while in transit to the interior, and the question of non-differential taxes only applies when the opium reaches the place of consumption. Surely His Majesty's consul-general cannot maintain that a port of entry such as Canton is the place of consumption for all the opium sold there, when, as a fact, it finds its way all over Kwong-tung, only a small percentage being consumed in Canton.
The new tax, although nominally leviable on prepared opium, is collected on raw opium at a specific rate of 7 dollars per ball whilst in transit, whereas the Chefoo Convention, in articles 2, 3, and 5 of the additional articles, clearly states that no tax, either direct or indirect, is to be placed upon opium, after payment of the duty and li-kin, until the opium has reached the place of consumption. The latest proclamation issued by the Bureau for the Suppression of Opium and also the regulations issued by the Opium Licence Monopoly show that the whole scheme is nothing less than an establishment of a monopoly, and the entire opium trade in the province of Kwong- tung is to be at the mercy of the Kwong Wing Un Hong and their agents.
To give some idea of the enormous losses so far sustained by British merchants owing to this new tax, we may state that since the issue of the first proclamation prices of opium have declined about 1,000 dollars per chest, and, with the heavy stocks which have been accumulating in merchants' hands through the entire cessation of business, it is
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