2
of countries outside China, for smuggling with its attendant evils will continue until the necessary steps are taken at the fountain-head. We consider that this argument contains a non sequitur. We admit the desirability of the measure proposed by Sir John Jordan:",in point of fact we have already carried it into effect. But it seems clear to us that the restriction of exports of uncertified opium cannot in itself put a stop to smuggling and it is incorrect, therefore, in our opinion to regard the existence of smuggling as any proof that these exports continue to be in excess of the requirements of the non-China markets. We deal with these points separately in the following paragraphs.
4. The quantity of non-certified opium motilied for export in the current year is 13,200 chests. From our telegram dated the 3rd November, 1911, it will be seen that this amount was suggested by us in pursuance of our policy of assisting China in her anti-opium campaign, although, as we stated in the telegram, the data then at our disposal would have justified our taking a somewhat higher figure for the normal and genuine requirements of the non-China markets. The further statistics subsequently forwarded with your revenue secretary's letters dated respectively, the 10th, 22nd, and 24th November and the 1st December, 1911, have not only confirmed us in the view that our estimate was very moderate, but have convinced us that the amount exported in 1910, viz., 16,000 chests, was in no way excessive. The reduced figure of 13,200 chests fixed for this year, so far from being in excess of genuine requirements, is clearly insufficient to meet them, and we respectfully suggest that any statement to the contrary must be based on information proceeding from interested sources. It has been our own experience, and we have no doubt that the same condition holds in the case of traders in China, that merchants who have accumulated large stocks of opium for consumption in China, in the hope of making enormous profits over their transactions, invariably represent whatever amount we may fix for export to non-China markets as being in excess of actual requirements, and urge the possibility of its being smuggled to China.
6. This latter consideration brings us to our further contention, which we have on more than one occasion pressed upon your Lordship, that no reduction of non-China exports, short of absolute stoppage, will prevent such smuggling. As long as prices in China are decidedly higher than the non-China consumers are willing to pay, so long. must smuggling be profitable. If China insistently demands more opium than, under treaty obligations, we are allowed to certify, and is willing to pay abnormal prices for it, we may reduce our export of uncertified opium to vanishing point without effecting the purpose at which we are aiming. The more those exports are reduced the more will the non-China markets be starved, unless they are prepared either to outbid the China smuggler, or to substitute Persian and Turkish for Indian opium. A tendency in the latter direction is, indeed, already noticeable, as shown by the quantity of Persian and Turkish opioni transhipped at Bombay for Singapore during 1911. While only 64 chests of Persian and none of Turkish opium were consigned from Bombay to Singapore in 1909, 581 chests of Persian and 78 of Turkish opium were so consigned in 1910, and 1,127 and 363 chests, respectively, in 1911. It is possible, in view of these figures, that the only result of a further restriction of our exports would be to benefit the Persian and Turkish opium interests. In any case we consider that any such restriction regarded as a method of discouraging smuggling would be not only extremely expensive, but ineffective, and we confidently assert that our action in the matter has not failed to be consistent with the general policy which has been accepted by His Majesty's Government in opium matters.
We have, &c.
HARDINGE OF PENSHURST,
O'M. CREAGH.
HARCOURT BUTLER.
S. A. IMAM.
W. H. CLARK,
R. H. CRADDOCK.
R. W. GILLAN.
ار
[This Document is the Property of His Britannic Majesty's Government.]
OPIUM.
CONFIDENTIAL.
[34581]
No. 1.
Sir Edward Grey to Sir J. Jordan.
40
[August 23.]
SECTION 1.
(No. 236.) Sir,
Foreign Office, August 23, 1912. WITH reference to your despatch No. 220 of the 9th May last, I transmit to you herewith for any observations which you may have to offer a copy of a letter from the India Office, enclosing a despatch from the Government of India in regard to the general question of restricting the export of uncertified opiuni from India, in view of the smuggling of such opium into China.
You will observe that the Government of India contend, firstly, that as long as prices in China are decidedly higher than the non-China consumers are willing to pay, so long will smuggling continue to be profitable; and, secondly, that the further restriction of the aggregate of uncertified opium exported is likely to fail in its object, since the result is a corresponding increase of Turkish and Persian opium.
In this latter argument there appears to me to be considerable force. The restriction of the export of Indian opium to particular countries according to their actual needs which I am endeavouring to obtain, as for instance in the case of Macao, is bound to be relatively effective in the suppression of smuggling, while it will do no injury to Indian trade interests; but I should be glad to learn whether, after consideration of the figures now supplied by the Indian Government and particularly those concerning the increase of Turkish and Persian opium, you are still of opinion that it would be desirable to urge on the Indian Government that they should restrict the aggregate amount exported.
I am, &c.
[2604 -1]
India Office, August 15, 1912,
#
E. GREY.