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[This Document is the Property of His Britannic Majesty's Government.
OPIUM.
CONFIDENTIAL.
[26345]
No. 1.
MA
211
[June 21.} ?
REGE 2 AUG 12
SECTION 1.
550
Sir J. Jordan to Sir Edward Grey.-(Received June 21.)
(No. 240. Confidential.) Sir,
Peking, May 31, 1912. WITH reference to my despatch No. 234 of the 23rd instant and previous correspondence on the subject of the violation by the Chekiang authorities of the Opium Agreement of 1911, I have the honour to enclose herewith copy of a despatch which I have received from His Majesty's consul-general at Shanghai reporting the representa- tions made to him by Mr. E. J. Ezra in regard to the impending bankruptcy of
his firm.
I have also the honour to enclose for your information extracts from the newspaper articles and correspondence to which reference is made in Mr. Fraser's despatch.
I am sending copies of Mr. Fraser's despatch and of the newspaper extracts to the Viceroy of India.
Enclosure 1 in No. 1.
I have, &c.
J. N. JORDAN.
(No. 79. Confidential.) Sir,
Consul-General Fraser to Sir J. Jordan.
Shanghai, May 23, 1912.
I HAVE the honour to report that yesterday afternoon Mr. E. J. Ezra called to represent that unless reparation for the action of Chekiang were obtained within one to two mouths his firm of Edward Ezra and Co., would be bankrupt,
Mr. Ezra stated that before the revolution started ho had invested in Indian opium some 1,250,000 taels. The revolution stopped trade, a misfortune of which he could not complain; when the two parties came to terms, there was a brief revival of which he took advantage to settle many chests with the native dealers; the action of Chêkiang not only stopped all business except of a hand-to-mouth sort but prevented dealers from fulfilling their contracts. The result is that for some four months his firm and the other importers have had no income to meet the heavy charges of the foreign banks which had as usual advanced against the drug. The two British banks have let old loans run on while declining to make new contracts; but the Belgian and French banks demand higher and higher margins, and the latter has raised its rate of interest on a loan of 500,000 taels to 15 per cent. per annum. The market has, since the obstructive policy started, fallen from over 3,500 taels-at which Mr. Ezra actually sold four months ago to a nominal 2,600 taels; and he believes no cash transaction could be done at even 2,000 taels per chest, since no dealer dares to keep any stock up country in face of Chêkiang's circular exhorting all the provinces to follow its example. The native papers allege that the President, in reply to appeals to authorise suppression of the Indian traffic, declared his regret that the Republic had not excepted opium agreements from its promise to maintain all existing international compacts, an omission that made it necessary at present to recognise their binding force; but Chêkiang is showing how little that force is.
Mr. Ezra added that his firm had bought the opium and paid all the proper charges on the understanding that the trade would be protected under the existing agreements. He had acted in a legal manner and yet was denied his legal rights with the result that two-thirds of his capital had already gone in margins and interest on a depreciated stock.
With regard to the newspaper charge that the importers had run up prices and refused to part with their stock, be protested that he was justified in trying to obtain the value enhanced by the imminent cessation of importation, adding that the Indian
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