[This Document is the Property of His Britannic Majesty's Government.]
C. O. 6406
OPIUM.
CONFIDENTIAL.
SECT
[5410]
ALL 19 FEB 14i
No. 1.
[February 6.]
SECTION 1.
Jud
and on lank asigo ady'
(No. 25.) Sir,
Sir J. Jordan to Sir Edward Grey.-(Received February 6.)
Peking, January 21, 1914, WITH reference to my telegram No. 5 on the subject of verbal proposals communicated to me by the Minister for Foreign Affairs relative to the taking over by the Chinese Government of the present stocks of Indian opium, his Excellency requested me to recommend this offer to the sympathetic consideration of His Majesty's Government, and that, in case of acquiescence, our assistance might be forthcoming to assess a fair and moderate price against the unduly high rates now ruling, and also that an arrangement might be arrived at whereby the payment could be made by instalments.
It was evident that the Minister attached the first importance to the consent of His Majesty's Government to the principle that China might take over the stocks, and had left the details of the scheme to be subsequently worked out by joint co-operation. The Chinese Government appear to be in earnest in their desire to be rid of Indian opium at the earliest moment, and would like to burn the entire stocks immediately after purchase, but they realise that in their present straitened financial condition this may not be practicable, and as public opinion will not tolerate the establishment of an opium monopoly, they propose to let the ultimate disposal of the stocks stand over for the present.
This in all probability means that in the end they will be obliged to destroy the opium, and that we shall be left with promissory notes or Treasury bonds, the value of which it is not hard to forecast.
For these reasons and others given in my telegram I do not advocate the Chinese proposals, to which even the continuance of the present traffic, accompanied as it is with unpleasant associations and exposed at any moment to frenzied and fanatical attacks, would seem less damaging to our prestige.
The problem of the stocks, in my opinion, would never have reached a crisis had i the Indian Government consented to a stoppage of sales in June 1912. The 8,000 chests sold after that month overloaded the market, already congested, to such an extent that the financial catastrophe was barely avoided in January 1913, by the stoppage of the sales. This step, which six months earlier would have been viewed in the light of a graceful concession, came too late to be regarded as anything but a surrender to pressure. I would, therefore, strongly urge the adoption of a scheme on lines similar to those outlined in my despatch No. 2, and in that event it would probably be necessary to take over also the opium sold by the foreign importers to Chinese dealers but undelivered and still in bond, which amounted on the 1st January to 2,509 chests, making in all 14,248 chests.
I have, &c.
J. N. JORDAN.
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