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dealers buying of the larger shops in the same district, must first apply to the Opium Prohibition Branch Bureau of the district, and on their licence being properly examined take out certificates or permits for so importing opium from another province or district, or purchasing opium from other dealers in the same district. The breach of this article will be treated as equivalent to dealing in opium without licence, and the seller of such opium and the importer or purchaser thereof incurs the penalty of having violated the regulations, and the goods so dealt with will be confiscated.
And the 9th article proceeds to the effect that "in respect of the above certificate and permits no fee or charge shall be made for their issue. But if such importer or purchaser should import or purchase any greater quantity of opium than is allowed by the permits issued to him by way of altering the figure of the amount specified in the permit, such importer or purchaser (and also the seller if found guilty) is liable to a fine equivalent to twenty times the value of the opium bought without permission.”
It is to these two articles that exception is taken as constituting an illegal interference with foreign trade in the drug, for by them restrictions are placed on the free transit of opium, although by treaty the foreign importer, having once paid import duty and taken out a transit pass, acquires the right to circulate the commodity without hindrance from one provision to another. The fact, moreover, that no fee or charge is demanded for the issue of the certificate prescribed by article 8 does not justify the enforcement of taking out such certificate, nor does it render the provision less an interference with the right of the importer to send his opium freely into the interior (vide (A) ).
any
(A.) The 3rd section of the additional article of the Chefoo agreement states, as your Excellency is doubtless well aware, that the certificate granted by the Customs shall free the opium to which it applies from the imposition from any further tax or duty whilst in transport in the interior, provided that the package has not been opened and that the Customs seals. marks, and numbers on the packages have not been effaced or tampered with. Whilst by the 2nd section of the 7th article of the same agreement it is further agreed that the Government of Great Britain shall have the right to terminate the agreement at any time, should the transit certificate be found not to confer on the opium complete exemption from all taxation whatsoever whilst being carried from the port of entry to the place of consumption in the interior.
By the convention of 1905 Great Britain entered into a generous agreement with China for the purpose of assisting in the suppression of a national evil, and the fact that my Government is at present again discussing the question with your own is ample evidence of her desire to continue that co-operation as far as she can reasonably and justly do so.
As it has not, however, been agreed to act on section 3, which declared that the high contracting parties by common consent, adopt any modification of the provisions of the present additional article which experience may show to be desirable, the above provisions and the whole additional article, which are the sole basis on which trade in foreign opium should be conducted, must be adhered to.
Your Excellency, in previous correspondence on the subject of these regulations, has more than once assured me that their purpose is merely to provide a system to check the number of smokers and to put down the evil habit, and has explained that it is neither intended to restrict nor will it result in any restriction on foreign_trade. Whilst I am grateful for your Excellency's prompt and unreserved assurances, I must at the same time point out that the wording of these two articles clearly implies an interference with foreign merchants' rights under treaty, and, in view of the fact that the dealers are mostly men in a small way of business, it is to be feared that their meaning may be misunderstood and difficulties arise.
I have the honour, therefore, to request that your Excellency will be good enough to call upon the Opium Prohibition Bureau to amend the rules by an explicit exception in 8th article of foreign opium duly verified by the treaty certificate.
Sir,
Enclosure 3 in No. 1.
Governor of Kiangsu to Consul-General Fraser.
Soochow, March 23, 1911.
I HAVE the honour to acknowledge the receipt of your despatch of the 14th instant on the subject of the new regulations issued by the Kiangsu Opium Prohibition Bureau.
[Despatch quoted in extenso.]
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The friendly regard evidenced by your appreciation of my explicit assurances that the system of licences and certificates is intended solely to check the decrease in the numbers of smokers, and has no bearing on the import and circulation of foreign opium, has aroused my highest admiration for your sense of justice.
I must, however, add a few more remarks in order to explain the position of affairs.
In the first place, the introduction to the additional articles to the Chefoo convention states that "the Governments of Great Britain and of China, considering that the terms of clause 3 of the 3rd section of that agreement are not sufficiently explicit to serve as an efficient regulation for the traffic of opium, and recognising the desirability of placing restrictions on the consumption of opium, have agreed to the present additional article." It is the "placing of restrictions" in fact which constitutes the breathing spirit of all the ten articles. Thus, article 3 says: "Such certificate shall free the opium to which it applies from the imposition of any further tax whilst in transport in the interior, provided that the package has not been opened, and that the Customs seals, marks, and numbers on the packages have not been effaced or tampered with," and such certificates shall have validity only in the hands of Chinese subjects, and shall not entitle foreigners to convey or accompany any opium in which they may be interested into the interior. Here the words, "shall free the opium from any further tax or duty," bear especial reference only to such packages as have not been opened and on which the Customs seals, marks, and numbers have not been effaced or tampered with, whilst the words, "such certificates shall have validity only in the hands of Chinese subjects," expressly denotes that foreigners are debarred from using them.
tax
In
Again, the 5th article says: "The Chinese Government undertakes that when the packages shall have been opened at the place of consumption, the opium shall not be subjected to any tax or contribution, direct or indirect, or in excess of such or contribution as is or may hereafter be levied on native opium. the event of such tax or contribution being calculated ad valorem, the same rate, value for value, shall be assessed on foreign and native opium, and in ascertaining for this purpose the value of foreign opium, the amount paid on it for likin at the port of entry shall be deducted from its market value." From the wording of this article the meaning clearly is that opium, the packages of which are opened in the interior for sale there, may still be subjected to a levy of li-kin, and that if an additional contribution, either of duty or li-kin, is placed on native opium for the furtherance of measures of suppression, such additional contributiou, assessed at the same rate, value for value, as on native opium, may be levied on the foreign article.
And article 7, with regard to taxation, must be taken in connection with articles 3 and 5 for its meaning not to be missed.
Further, the examination of licences and certificates under the bureau's regulations has for its object a system of checking and not a system of taxation, and is in no way opposed to the Chefoo convention, for the reason that my Government is bound to take the strictest measures to check abuses on the part of the dealers in consideration of the friendly support extended by your Government in the suppression of opium.
With regard to the complaints of foreign merchants that the regulations are obstructive to their trade, they are, I think, the result of a misunderstanding, and 1 regret I cannot comply with your desire that the bureau should amend the regulations by an explicit statement (excepting for opium duly verified by treaty certificates), for I fear that in that case it would give rise to misleading statements by native dealers of differential treatment accorded to the native and foreign drug, whereby, instead of having a means at hand to check the decline of the evil, only difficulties and complications would result.
Your Excellency,
I have, &c.
(Seal of Governor.)
Enclosure 4 in No. 1.
Consul-General Fraser to Governor of Kiangsu.
Shanghai, March 29, 1911. I HAVE the honour to acknowledge receipt of your reply, dated the 23rd instant, to my suggestion that the Opium Prohibition Bureau should be ordered to amend
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