[This Document is the Property of His Britannic Majesty's Government.]
OPIUM.
со
33819
RECE REG 20 OCT 11
[October 4.]
CONFIDENTIAL.
[38886]
No. 1.
SECTION 2.
Sir J. Jordan to Sir Edward Grey.-(Received October 4,)
(No. 360.) Sir,
Peking, September 15, 1911. WITH reference to your despatch No. 269 of the 22nd August, forwarding for my observations copies of correspondence with Messrs. E. D. and David Sassoon and Co. respecting duty on 332 chests of uncertificated opium in transit between Hong Kong and Shanghai on the 8th May, when the new Opium Agreement was signed, I have the honour to point out that the natural effect of the increase in duty under that agreement was to raise the price of opium in the Shanghai market, which was quoted at 1,680 taels per chest at the end of March, to 2,024 and 2,084 taels on the 14th and 28th May respectively, and that uncertificated opium purchased at the auction sales in India at a lower price than certificated opium was, even after payment of the higher duty, in a much more favourable position than certificated opium entering Shanghai after the Sth May.
While, therefore, these two firms may have failed to profit by the ifference between the old and new duties, I am unable to see that they have suffered any material loss.
The only case in which I was able to secure favourable treatment for uncertificated opium in transit between Hong Kong and Shanghai on the 8th May was a consignment of twenty-five chests in which the Hong Kong and Shanghai Banking Corporation was interested; but there was proof that this opium, which had been accepted by the bank as security for payment of a bill drawn on a Hong Kong firm on the 18th February, had been shipped ex bond at Shanghai to Hong Kong for delivery against payment of the bill, and, when that was dishonoured, was reshipped on the 6th May to Shanghai for realisation, but did not reach its destination till six days afterwards.
The great strictness with which the agreement has been construed by the Chinese authorities may be gathered from a claim by the commissioner of customs at Shanghai that eighty-six chests of certificated opium on which a British firm applied to the Customs to pay duty on the 6th May obtained the usual duty memorandum on that day, and held the Customs Bank receipt for duty dated the 8th May, were liable to the higher duty. As the transaction was entirely bond fide, I considered it my duty to press the matter with the Acting Inspector-General of Customs, and Mr. Aglen, with some reluctance, agreed to the levy of the old duty.
On the whole, however, the interpretation of the agreement has not been illiberal in view of the amount of opium that escaped the new duty at Shanghai in the days immediately preceding the 8th May.
[2226 d-2]
I have, &c.
J. N. JORDAN.
52