[This Document is the Property of His Britannic Majesty's Government.?
OPIUM.
CONFIDENTIAL.
[5643]
No. 1.
166
[February 7.]
SECTION 4.
Sir,
India Office to Foreign Office.-(Received February 7.)
India Office, February 6, 1914. IN continuation of my letter of the 24th December, 1913, I am directed by the Secretary of State for India in Council to forward, for any observations which Sir Edward Grey may wish to offer, a copy of two telegrams from the Government of India on the subject of the opium stocks in the Far East.
Enclosure 1 in No. 1.
I am, &c.
T. W. HOLDERNESS.
Government of India to the Marquess of Crewe.
(Telegraphic.) P.
January 30, 1914. BRITISH Minister at Peking has repeated to us his telegram No. 5 to Foreign Office. When his despatches to which he refers reach us we will report further. We wish, however, to say at once that we regard with the greatest consternation this utterly unforeseen demand on us which is foreshadowed in his telegram. On the strength of reports by Jordan of non-observance by China of treaty obligations, and with the full support of His Majesty's Government, we have hitherto maintained that, having regard to the large sacrifice in respect of opium which we have already made, no case existed for further releasing the Chinese Government from its obligations in reference to opium stocks which are gradually being absorbed. We are strongly averse to attitude in this matter being weakened. Quite apart from the strong moral position which we hold in relation to treaty conditions which are peculiarly favourable to China, it is necessary to consider the matter from an economic and practical point of view. Our straightened financial circumstances at the present time are known to you and you are aware of the difficulty with which we are able to arrange to maintain in 1914-15 an adequate railway programme, a difficulty which in subsequent years is likely to recur. Should we be faced with a great and sudden demand on basis of suggestions made by Jordan, which may eventually involve a much greater loss than he is able to estimate, the necessity will arise either for a corresponding increase in your sterling loan in coming year, or for a sudden and drastic reduction of the railway programme. Perhaps the first alternative may not be practicable: the far-reaching and serious consequence of the second familiar to you. The effect on opium merchants, and on the banks by which they are financed, of sales to us at the price apparently contemplated by Jordan cannot be foreseen. It might possibly be disastrous. To clear this up full enquiry would be necessary probably at Hong Kong and Shanghai; this is a further weighty reason against any precipitate action or commitment. We desire further to say that any material weakening of our financial position would delay the development of the policy of educational reform which His Majesty announced at Delhi. Sanitary improvements would be similarly hampered, and a stumbling-block would be set in the way of carrying out changes which may be recommended by the Public Services Commission. Further, our ability to finance the construction of the new capital would probably be hampered. The keenest criticism and hostility would be evoked in this country by these consequences should they result from action now suggested,
We most earnestly beg that this proposal may be opposed to the utmost by you, and if eventually, on humanitarian, political, or other grounds, a concession has to be made, we submit that the cost should be borne by His Majesty's Government since the concession will be made in deference to supposed British trade interests and in order that a section of British opinion may be gratified.
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