374
[This Document is the Property of His Britannic Majesty's Government.]
OPIUM.
C.O.
12296
[March/14.]' TRECO Secrid 12 APR 13
CONFIDENTIAL.
[11817]
No. 1.
Sir J. Jordan to Sir Edward Grey.—(Received March 14.)
(No. 86.) Sir,
Peking, February 25, 1913.
AT an interview with the Chinese Foreign Minister on the 5th February, I discussed the subject of the Chinese proposals referred to in my telegram No. 30 of the 1st February and my despatch No. 60 of the 6th instant.
In reply to my enquiry as to the financial basis of the scheme, Mr. Lu stated that the Chinese Government hoped to carry the proposals through on the broad principles already indicated, but that the Ministry of the Interior were anxious to decide the lines on which the monopoly would be worked before they could well consider the details of the purchase of the stocks. It would, however, be impossible, he thought, to take over the whole of the stocks at one time, for China could not possibly provide so large a sum of money.
He enquired whether the stocks might not be taken over in instal- ments and paid for after the Government had received the proceeds of the retail sales. I pointed out that the banks probably held a lien on the stocks, and it was by no means certain, therefore, that the merchants could actually hand over any quantity of the opinm without payment. I was unable to enter into any detailed financial discussion at present and said that it would be well for the Chinese Government to formulate a scheme for payment which could then be considered on its merits.
The Foreign Minister explained that the real difficulty in founding a monopoly, and so reaching a satisfactory settlement, would possibly be found in the opposition of the provinces. They would only be too glad to undertake this monopoly themselves, and would probably be jealous of any such enterprise if it was to be in the bands of the Central Government.
At a second interview on the 21st February, I conveyed to the Foreign Minister the reply contained in your telegram No. 53 of the 14th February. I laid emphasis on the points that fair remuneration must be made to the opium merchants; that the establishment of a monopoly must be regarded as a means to an end, namely, the eventual eradication of opium from China; that a speedy decision was essential in view of the stoppage of sales and the danger of speculation, which would complicate the final financial adjustments; and that secrecy was most important in the interests of the Chinese Government; that a reference to the question had already appeared in the native press, and that the position would become extremely difficult if the negotia- tions were prematurely disclosed, as prices would certainly rise. Mr. Lu expressed his satisfaction and declared that he would lay the facts before the President on the 24th instant. In reply to his enquiry as to a general idea of the amount of the stocks and the sum necessary for redemption, I gave the number of chests as between 29,000 and 30,000 and placed the purchase price approximately at 8,000,000l., exclusive of freight, insurance, and other due charges for which allowance would have to be made. The stocks had been purchased at prices showing marked fluctuations, but I reminded Mr. Lu that the auction prices were published figures and that the Chinese opium representative at Calcutta was in a position to verify the exact figure for each consign- ment. 1 added that I would instruct Mr. Wilton to go into the question of figures with an officer appointed by the Minister. Mr. Lu promised that he would lay the whole question before the President, who would doubtless issue the necessary instructions to the Ministry of the Interior, and that he would let me know the result of his representations.
In my despatch No. CO, I stated that the Foreign Minister had evidently not worked out the scheme in any detail when he presented his proposals. The result of my conversations with Mr. Lu does not show any advance beyond this point. I gathered the impression, however, that Mr. Lu had been waiting for the acceptance of the Chinese proposals by His Majesty's Government before proceeding with any seriousness to work out any details in connection with the working of the monopoly and the financial question of the redemption of the stocks.
I have, &c.
J. N. JORDAN.
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