COPY.
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Enclosure
633
73
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Your Excellency,
Hongkong, 12th December, 1912.
REGE 6 JAN 13
We have the honour to approach Your Excellency
on the subject of the Foreign opium trade with China, the present
position of which is such as to give cause for extreme anxiety to
all concerned, owing to the enormous financial interests involved.
.
It seems to us of the utmost importance that
some action should be taken to prevent the present stocks of opium
in China being augmented by further shipments from India until
some settlement of the breach of the Indian Government's Agreement with China has been arrived at. Under that Agreement a specified
amount of opium, specially earmarked, was to be sold by the Indian Government annually for shipment to China, and it was stipulated
that beyond an import duty of a certain amount per chest, no
restrictions would be placed on the trade by the Chinese Govern-
- ment, pending a total cessation of that trade in a certain num-
-ber of years. The Merchants naturally considered the terms of this Agreement would be adhered to and consequently bought from the Indian Government the certificated opium sold at auction for
the China market. For some months past various restrictions, contra
-ry to Treaty, have been imposed by the Chinese against Indian
Opium, resulting in an accumulation of stocks, and we understand
that it is now the intention of the Chinese Government to en-
-deavour to put a stop to opium smoking at the end of the current month. This in itself is a very serious matter to the Merchants who bought opium in good faith that the agreement to gradually curtail the trade would be adhered to. At the present moment the stock of opium in the hands of Merchants is estimated at a value of
£12,000,000, including over £1,000,000 in this Colony.
Banke in both India and Chins felt justified in financing the Lerchants as they considered the business was
protected by Treaty.
The present situation is very serious and will
be considerably enhanced if, so long as the Chinese Government