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Enclosure 3 in No. 1.
Memorandum communicated to Mr. Max Müller by Wai-uu Pu.
(Translation.)
UNDER the arrangement concluded between His Majesty's Government and the Chinese Government three years ago His Majesty's Government undertook that if during this period of three years, the Chinese Government should duly carry out the arrangements on their part for reducing the production and consumption of opium in China, they would continue in the same proportion of 10 per cent. the annual diminu- tion (of the export) after the expiration of the three years' period. Since His Majesty's Government has now ascertained that China has duly reduced the production and consumption of opium within her boundaries, and since His Majesty's Government have generously waived the clear proofs of the amount of reduction accomplished, the proposal originally made should now be made operative, and an aunual diminution (in the export) of one-tenth be made from the year 1911, until at the conclusion of ten years the total abolition shall have been brought about. No period of only three years shall again be fixed, but if there be any failure on the part of China to prohibit opium in accordance with the arrangements concluded, such failure shall form the subject of a protest at the time on the part of His Majesty's Government.
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2. Under the arrangement concluded between the two Governments it was agreed that the Chinese Government might dispatch an officer to Calcutta to watch the ophium auctions and the packing of the drug with a view to ascertaining the exact quantity exported. It is now proposed actually to dispatch such an officer, and His Majesty's Government are requested to authorise this officer to issue “ conveyance certificates for all opium exported to China, and to affix a seal to every package thus exported up to the number only allowed to be exported in any one year, when no further seals will be affixed. On arrival in China the lauding of such opium will be only permitted by the Imperial Maritime Customs after examination of the conveyance certificate and seal. In this way the abuse by which opium destined for countries other than China is (now) conveyed into China will be eradicated. In the event of His Majesty's Government consenting to this arrangement, all other Governments will be invited by the Chinese Government to give their consent and to make the arrangements binding on their respective nationals.
3. As regards the measures to be adopted with regard to the restriction and abolition of the export of the 16,000 chests of opium now annually exported from India to countries other than China, His Majesty's Government are requested to make arrangements and to communicate them to the Wai-wu Pu. The board will then notify accordingly the foreign representatives at Peking with a request that they be made binding on their respective nationals and as evidence of the cordial support lent by Flis Majesty's Government.
September 25, 1910.
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(2.) On confirmation of this arrangement China shall at once withdraw all regulations in restraint of the wholesale trade in Indian opium that have been put in force at the treaty ports in China by or with the sanction of the provincial authorities, and undertakes that during the unexpired term of ten years no regulations in restraint of the wholesale trade in Indian opium at the treaty ports shall be imposed, and that thore shall be no arbitrary reduction in the number of wholesale dealers in Indian opium at these ports.
(3.) The consolidated duty and li-kin ou Indian opium at present in force shall not he increased until there has been a corresponding and effective increase in the taxation of native opium, His Majesty's Government are, however, prepared to consent to an increase in the duty and li-kin on Indian opiuma on production of satisfactory proof that a corresponding increase has been, or will simultaneously be, effected in the sum total of the taxation paid by native opium.
Any failure on the part of China to fulfil condition (1) or any infringent of conditions (2) and (3) shall entitle His Majesty's Government to terminate this arrangement without further notice.
2.) By the arrangement of 1907 His Majesty's Government agreed to the dispatch by China of an officer to India to watch the opium sales on condition that such officer would have no power of interference. His Majesty's Government further agree that the officer so dispatched may be present at the packing of opium on the same
condition.
(2.) With a view to assisting China in the suppression of opium His Majesty's Government undertake that from the year 1911 the Government of India will issue an export permit for each chest of Indian opium declared for shipment to or for consumption in China.
(3.) During the year 1911 the number of permits so issued shall not exceed 30,600, and shall be progressively reduced annually by 5,100 during the unexpired period of the 10 years' limit.
(4.) Each permit so issued shall before shipment of opium declared for shipment to or for consumption in Chiua be presented to the Chinese officer concerned, who shall endorse and seal the same.
(5.) His Majesty's Government undertake that each chest of opium for which such permit has been granted shall be sealed by an officer deputed by the Indian Government in the presence of the Chinese officer concerned.
(6.) The Chinese Government undertake that chests of opium so sealed and accompanied by permits so endorsed may be imported into any treaty port of China without let or hindrance if such seals reniain unbroken, and that such opium, having paid the consolidated import duty and li-kia, shall be exempt from any further taxation whatever in the port of import
(7). On and after
opium not so sealed and unaccompanied by a permit
so endorsed shall be refused entry into any of the open ports of China. This article will not come into force until all the treaty Powers have signified their acceptance of the engagement set forth therein as binding on their nationals.
Enclosure 4 in No. 1.
Draft Memorandum to Wai-wu Pu.
UNDER the arrangement concluded between His Majesty's Government and the Chinese Government three years ago His Majesty's Government undertook that if during this period of three years the Chinese Government should duly carry out the arrangement on their part for reducing the production and consumption of opium in China, they would continue in the same proportion of 10 per cent, the annual diminution of the exports from India after the expiration of the three years' period.
His Majesty's Government, recognising the sincerity of the Chinese Government and their partial success in diminishing the production of opium in China during the past three years, are prepared to continue the arrangement of 1907 for the full period of ten years on the following conditions :---
(1.) From the 1st January, 1911, until the expiry of the term of ten years China shall diminish annually the production of opium in China in the same proportion as the progressive diminished annual export from India.
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