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of opium.

At present the Farmer can use 900 chesta per

annum for all purpoBOE.

3.

As regards prepared opim the new Ordinance

limits to 6 tasla the amount of the drug which may be sold

at one time,or which any person, other than the Opium

Farmer or his licensees, may have in his possession; and

increases largely the penalty for breaches of the sections

dealing with the import and export of morphine and com-

pounds of opium. It provides that prepared opium seized

with regard to which any breach of sections 35(7), (8),

(9), 36 and 37 (as amended by the B111 enclosed herein)

and sections 76 and 77 of the Principal Ordinance (copy of

which is enclosed for convenience of reference) shall be

forfeited to the Crown.

It increases the penalty for concealing

opium in any ship from a maximum fine of $500 to a maximum

fine of $2,000 or, at the discretion of the Magistrate,to

imprisonment for a period not exceeding 12 months. And it

makes important amendments in sections 76(2), 77 and 78 of

the Principal Ordinance.

5. It is anticipated that these alterations in

the law and in the conditions of the Opium Farmer's con-

trast,will result in a great diminution in smuggling of

opium from Hongkong sources. They aim at limiting the

supply to legitimate requirements and this must, in the

Case of a valuable and easily concealed artiole like opium,

be the surest method of prevention. This consideration

leads me to point out that prepared opium can be obtained

in Haoso and Kwong-chow-wan within easy reach of Hongkong,

and that until the supply in those places is limited to

legitimate local requirements so long is the smuggling of

prepared

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