4

you to instruct the officials concerned to desist from levying any further taxation on foreign opium at the ports of import.

The constant disregard of your treaty obligations is causing considerable losses to the foreign opium merchants, and I must again request you to cause the regulations to be so altered as to exempt lodian opium from their incidence.

I should at the same time be obliged if you would answer my letter of the 8th August and my telegram of the 10th August.

Copies of the two receipts referred to above are enclosed.

5

untenable in view of the two receipts enclosed in my immediately preceding despatch, which explicitly state that the payments were on account of the tax on foreigu opium. Moreover, the tutu's assertion that this tax is collected at the end of each month is directly traversed by the fact that these two receipts are dated the 4th and 15th August.

The tutu also passes over without comment the further objection to the regulations that they interfere with the Indian opium trade by restricting the sale of opium to official establishments at a limited number of places.

I have, &c.

LANCELOT GILES.

I have, '&c.

LANCELOT GILES.

132

Enclosure 5 in No. 1.

Receipt dated August 4, 1912.

(Translation.)

RECEIVED this day on account of

Foreign opium tax

Pei-chou (Szechuan) opium tax

Fêng-tu

August 4, in the 1st year of the Republic.

(Translation.) Sir,

Cash.

67,050

3,200 1,218

(Stamped in the Accountancy of the Yamên of the Prefect of Kiukiang)

(Translation.)

Enclosure & in No. 1.

Receipt dated August 15, 1912.

RECEIVED this day on account of

Foreign opium tax

Native

August 15, in the 1st year of the Republic.

(No. 32.) Sir,

Cash,

89,100 7.850

(Stamped in the Accountancy of the Yamen of the Prefect of Kiukiang.)

Enclosure 7 in No. 1.

Acting Consul Giles to Sir J. Jordan.

Kiukiang, August 22, 1912.

I HAVE the honour to enclose copy and translation of a despatch from the Tutu of Kiangsi, which I received just after I had closed my despatch No. 31.

This despatch is couched in the tutu's now almost stereotyped form of reply to expostulations against the illegality of the Kiangsi anti-opium regulations, that is to say, he evades the points at issue and confines himself to reiterated declarations that the regulations do not infringe treaty provisions.

It is apparent that the Wai-chiao Pu have not, so far, acceded to the requests contained in your memoranda of the 26th June and the 13th July, that the tutu should be instructed to withdraw the illegal restrictions imposed on the Indian opium trade by the new regulations. I think there is but little hope of the tutu giving way in this matter unless considerable pressure is brought to bear on him by the Central Government.

The tutu ignores the argument that these regulations are not such as were con- templated by article 7, paragraph 4, of the opium agreement, inasmuch as they were not published by the Chinese, but only by a provincial government. He asserts that as they do not restrict the wholesale trade they are therefore unobjectionable. As I have already pointed out, the right to deal in Indian opium wholesale is a privilege of no value if there is no outlet through the retail trade for the merchandise in question.

As regards the tax imposed by the regulations, the standpoint adopted by the tutu, that it is only levied on the consumers and is not a direct tax on raw opium, is

Enclosure 8 in No. 1.

Tutu of Kiangsi to Acting Consul Giles,

August 18, 1912.

I HAVE the honour to acknowledge the receipt on the 11th instant of your letter.

[Quotes letter of the 8th August, 1912, in extenso.]

I have on various occasions reported, both by telegraph and by despatch, to the Central Government that the new anti-opium regulations of Kiangsi did not, as a matter of fact, impose any restrictions on the wholesale trade of Indian opium, and were in conformity with the provisions of the opium agreement; while there was no reason why the retail trade should not be controlled and checked in the manner laid down by these regulations. In view of this, how could there have been instructions for their withdrawal? The Chinese Government are observing the opium agreement, and the effective administration of these regulations is conclusive proof thereof. Consequently, there should be no cause for further misunderstandings.

With reference to the levy of a tax of one-sixth of the market price of opium, it is collected at the end of each month on the total amount of opium retailed at the official sales establishments, and is really a tax on the consumers, and not an additional direct tax on raw opium. The Government of this province have not failed to comply with that provision of the opium agreement which prescribes that no additional tax may be levied on Indian opium which has paid the consolidated duty, and the special aim of the present tax is merely to exercise still further control over Chinese merchants and opium smokers. The tax levied at Kiukiang is no other than this, and I have not learned that it has been altered to a tax on unbroken packages of Indian opium.

Article 3 [sic] of the opium agreement provides that no restrictions may be placed on the wholesale trade of Indian opium, but this article does not apply to the retail trade. As regards the wholesale trade of Indian opium, the Government of this province will scrupulously observe the opium agreement, and free traffic in this commodity will be permitted as heretofore. These advantages your nationals are entitled to enjoy under treaty. On the other hand, in the matter of putting an end to the consumption of opium and of controlling the opium retail trade you should show sympathy with our aims, and thus secure to China the privileges to which she is similarly entitled under treaty, in this way fulfilling the object of the opium agreement, that both parties thereto should meet with equally favourable treatment.

Having received your letter, it was my duty to explain in detail how treaty requirements were being complied with, and to demonstrate to you that these new anti-opium regulations were being effectively carried out.

You are intimately acquainted with the principles of law, and you wish to strengthen the bonds of friendship between our two countries, I trust, therefore, that you will not raise any further objections.

Enclosure 9 in No. 1.

Memorandum.

(Seal of Tutu of Kiangsi.)

IN response to several complaints by His Majesty's Minister against the action of the officials of Kiangsi province in imposing restrictions on the trade in Indian opium

Fia

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