[This Document is the Property of His Britannic Majesty's Government]
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through placing too much reliance upon the willingness and power of their own Government to see that treaties are observed. By taking strong measures now His Majesty's Government will be endeavouring to maintain British prestige and the sacredness of treaties.
In a previous letter we suggested that as the Chinese treated the Chefoo convention and additional agreement as so much waste paper His Majesty's Government should formally abrogate these treaties. At the time His Majesty's Government could not see their way to act on that suggestion on the ground that the Chinese would retaliate by harassing the trade in other ways. Now the position is different. By the action of China the trade in Indian opium is entirely stopped, while as you are aware the native drug is being largely produced in the country itself. If the Chefoo convention and additional agreement were cancelled, and in consequence the Chinese again attempted to put a cordon of revenne launches in Hong Kong waters, British war-ships could be depended upon to deal with them.
The above suggested remedy was the only one which occurred to us at the time as a counter-stroke to China's persecution of the opium trade. In any case, however, matters have come to such a pass that strong measures of some kind have become indispensable. We have no doubt that the collective wisdom of His Majesty's Cabinet can and will devise some means of bringing China to her senses.
We once more beg to draw attention to the fact that this matter does not alone affect the few shippers engaged in the opium trade, but very materially affects also the shareholders of British banks operating in India and China.
The losses incurred already are enormous, and in due course a claim will be made upon China for damages which it is to be hoped will receive the whole-hearted support of His Majesty's Government.
We have, &c.
E. D. SASSOON AND CO. (For David Sassoon and Co.),
D. GIBBONS, Manager.
P.S.-Since writing the above we have received the following further telegram from Shanghai:-
"Local Opium Guild have received a telegram from Hankow Opium Guild stating that importation Indian opium will be prohibited in Hupeh on and after 9th December. Magistrate Kensangshien, city near by Hankow, seized and confiscated ten packages Malwa opium
It is also reported that all opium shops Wuchang forcibly closed yesterday."
OPICM.
CONFIDENTIAL.
[53417]
No. 1.
[December 14.]
SEGHON&C.
2663
Rec?
India Office to Foreign Officc.-(Received December 14.) 24 JAN 3
India Office, December 13, 1912.
Sir,
I AM directed by the Secretary of State for India in Council to forward for the information of Sir Edward Grey a copy of a letter received from Messrs. Sassoons, dated the 6th December, in which they suggest that in view of the position of the China opium trade the sales of Malwa opium should be discontinued by the Govern- ment of India and the amount of Bengal uncertificated opium offered for sale reduced, or that, as an alternative, the Government of India should establish a reserve price for Malwa and for Bengal opin at the opium sales, based on recent high prices, and should refuse to sell below the reserve price.
Subject to Sir Edward Grey's concurrence, the Marquess of Crewe proposes to inform Messrs. Sassoons in reply that, as regards uncertificated opium, he is unable to accept their estimates of requirements, as they differ widely from the official estimates by local authorities in the colonies, on which the present sales are based, but that the Government of India will be asked to consider their representations in respect of the sales of uncertificated and of certificated opium.
I am to suggest that Messrs. Sassoons' representations should be communicated to Sir J. Jordan, and that he should be asked to report how far it is true that "total prohibition is being enforced by China," that all provinces are being closed to Malwa opium, that the entry of Indian opium into China has ceased during recent months, that stocks have heavily accumulated, and that there is no outlet for them. His advice on the present situation is desirable.
I ain, &c.
Enclosure in No. 1.
J. W. HOLDERNESS.
E. D. S.
D. G.
Sir,
Messrs. E. D. and Messrs. D. Sassoon and Co. to India Office.
17, St. Helen's Place, London, December 6, 1912. YOU are doubtless aware of the correspondence which has passed between the Foreign Office and ourselves regarding the attitude adopted by China on the opium question. Matters have now reached a very acute stage, as total prohibition is being enforced by China.
Shippers and traders in opium are confronted with two very serious difficulties. On the one hand, the grave action of China in attacking the trade without regard to treaties, and, on the other, the persistence of the Indian Government in continuing to sell large quantities of opium for shipment to China for which, owing to the closing of the ports and the heavy stocks in Hong Kong and Shanghai, there can be no real demand.
We will first deal with the question of Malwa, as a sale is advertised for the 13th instant, so the matter is particularly urgent.
According to our latest mail advices the stock of Malwa in Hong Kong and Shanghai amounted to 12,176 chests-to say nothing of the large quantity on the way for which there is no outlet whatsoever. As some indication of the degree of demoralisation to which the market has been reduced, we may say that permits for shipment to China ("revanahs," as they are called in Bombay) have dropped from about 2,500 rupees per chest to 1,100 rupees. To force upon a market in this state further quantities of Malwa would have very serious consequences for merchants, for traders, and indirectly for the banks, as, with no outlet for disposal, it would be too heavy a load for banks and merchants to carry. Extra duties exacted in India caused inflation of prices of Malwa opium sold for shipment to China, and if the
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