[This Document is the Property of His Britannic Majesty's Government.]
OPIUM.
CONFIDENTIAL.
18008
[May 10.]
RECO
&
SECTION 3.
HEO 16 JUN II
No. 1.
[17713]
Sir,
Messrs. E. D. and Messrs. David Sassoon and Co, to Foreign Office.-(Received
May 10.)
"
9, Fenchurch Avenue, London, May 9, 1911. WE notice to-day in the "Times
newspaper a cablegram from Peking to the effect that an opium agreement was signed yesterday by Sir John Jordan and the Wai-wu Pu.
As far as we can judge from the summary, this agreement is very far-reaching in its effects upon the trade, and appears likely to involve merchants in enormous losses. Before an agreement of this character is ratified and put into force we think the merchants interested should be permitted to study details and call attention to any suggested clauses which have obviously been framed with an insufficient knowledge of the trade. For instance, we gather that stocks in Hong Kong (which mainly consist of uncertificated opium purchased at high prices from the Indian Government before certificated opium was introduced) have to be transferred to Canton within seven days from the 8th instant, and duty paid thereon. In view of the fact that stocks in Hong Kong are financed for the Chinese by the banks or by the importers, it is difficult to understand how the money is to be found in a few days, sufficient to repay the banks and importers before shipment, to say nothing of the farther very large amount required in cash for duty purposes. As to unsold opium, Hong Kong merchants have no godowns or representatives in Canton. To whom then is this opium to be entrusted?
It may, of course, be that the telegraphed summary onits some saving clause, but this we can scarcely hope. We would ask you, however, as time is pressing, to be good enough to furnish us by return of post with full details of the agreement, so that we may
be in a position to judge what steps have to be taken. In the meantime, we must register a strong protest against this agreement which has been sprung up on merchants, and which enables the Chinese to still harass the trade, although the British Government have agreed to an increase of duty from 110 taels to 350 taels per chest.
The position is so critical that, in order to avoid disaster, we would urge
His Majesty's Government to telegraph to the Indian Government to stop all sales forthwith until the situation is cleared. Stocks in China, considerably exceed 20,000 chests, and to this has to be added opium on the way and opium still in Calcutta awaiting shipment-a total representing, say, some 6,000,000l. This enormous accumulation is due mainly to the harassing restrictions and illegal taxation imposed upon the trade during the past year by the Chinese provincial authorities. If the Indian Government continue to sell it will only aggravate the position, and if it is found impossible to stop further sales, we would urge His Majesty's Government to take over merchants' stocks on an equitable basis, and so prevent what promises to be a financial crisis. Merchants are undoubtedly entitled to full compensation if it is considered expedient to alter or discontinue the treaties existing when their purchases were made.
We have, &c.
E. D. SASSOON AND Co. DAVID SASSOON and Co. (Limited).
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