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in their view that they are in no way responsible to the opium merchants once the latter have been accorded a time-limit in which to dispose of their holdings, which according to the Chinese delegate now amount to 18,000 chests. Dr. Yen has even gone so far as to suggest that to render any further assistance would be tantamount to encouraging the merchants to continue holding their stocks for a further rise in price.
I have argued that the opium having been brought to China under the guarantees implied by treaty provisions cannot be legally interfered with, but while admitting this contention, the Chinese delegate holds that its force is nullified by the consideration that the admission of 18,000 additional chests increases the import of Indian opium which it is the avowed intention of the agreement to diminish.
A further objection that the recognition of any unmarked opium must inevitably facilitate smuggling in the future I have met by offering to have all existing stocks marked by the Chinese customs authorities in conjunction with consular and colonial officers, but neither this nor the emphasis I have laid on the fact that China herself is largely to blame for the present accumulation has produced any effect. The utmost concession I have been able to secure is an offer to admit the opium in stock provided a corresponding reduction is made in the authorised import of the three succeeding years, after allowing for, say, 5,000 chests to make up the actual deficiency in the authorised import for 1910, and even this proposal remains subject to confirmation by the board.
I had the honour in my telegrams Nos. 80 and 82 of the 22nd and 24th instant to report on the difficult position presented by these two crucial points of provincial prohibition and stocks, and from the Government of India's telegram of the 25th instant I have learnt of the further concessions which they are prepared to make in order to arrive at an agreement.
In the meantime I have received a deputation from the Anti-Opium Society for the province of Chibli, who have come to urge upon me the necessity for the total suppression of the Indian trade forthwith as the only means of securing the lasting success of the great efforts which are undoubtedly being made throughout this country for the eradication of the opium habit.
The revised penal code for the Chinese Empire which it is intended to bring into force next year contains clauses under which the smoking of opium becomes a criminal offence, while it is reported on fairly reliable authority that if the negotiations fail China contemplates demanding before the 24th April next the revision of the com- mercial articles of the Treaty of Tien-tsin in accordance with article 27 of that instrument.
With the aid of the Government of India's liberal concessions, I shall continue to do my utmost to induce the Chinese Government to come to terms on the two out- standing points, but from the experience of the past two months' almost fruitless discussion, it is, I regret to say, impossible to be sanguine of the result. I have, &c.
J. N. JORDAN.
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Enclosure 2 in No. 1.
Draft Opium Agreement.--(Handed to Dr. Yen, March 14, 1911.) Article 1 (d), (e), (f), and (g). On confirmation of this agreement (and beginning with the collection of the new rate of import duty), China will at once cause to be withdrawn all restrictions placed by the provincial authorities on the wholesale trade in Indian opium such as those recently imposed at Canton and elsewhere, and also all taxation on the wholesale trade other than the consolidated import duty, and no such restrictions or taxation shall be again imposed so long as the additional article to the Chefoo Agreement remains as at present in force.
This paragraph to be inserted here or elsewhere in the agreement]:
It is also understood that opium having paid the consolidated import duty shall be exempt from any further taxation whatsoever in the port of import.
[In lieu of Chinese article 4]:
The foregoing clause shall not derogate in any manner from the force of the laws already published or hereafter to be published by the Imperial Chinese Government to regulate and suppress the smoking of opium and the retail trade in the drug in general, [Additional article to come at end of agreement, in lieu of last paragraph of 1 (g)]: On a breach of any of the conditions contained in this arrangement, His Majesty's Government shall be at liberty to suspend or terminate the agreement at any time.
[In lieu of Chinese article 7]:
Should it be found necessary at any time during the unexpired period of seven years to modify this agreement, it may be revised by mutual agreement between the two high contracting parties.
Enclosure 1 in No. 1.
Chinese Memorandum.--(Re-draft handed to Dr. Yen, March 7, 1911.)
Article 2 (c). The Chinese Government has as regards native opium adopted a most rigorous policy for prohibiting the production, the transport, and the smoking of opium, and the British Government has expressed its agreement therewith and willing- ness to give every assistance. With the view of facilitating the continuance of this work, the British Government agrees :---
1. That the export of opium from India to China shall cease in less than seven years if clear proof is given to the satisfaction of the British Minister at Peking of the complete absence of production of native opium in China.
2. That Indian opium shall not be conveyed under transit- pass into any province in China which can establish by clear evidence that it has permanently suppressed the cultivation of native opium and has genuinely stopped the import of native opium from other provinces.
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