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of humanity alone, and that India might well be proud of her share in the regeneration of her great neighbour. The position, however, is radically different when it is a question, not, as it then was, of consenting to forego future profits, or even of acquiescing in the abolition of the trade before the stipulated time, but of finding sum of money, which would probably amount to several millions sterling, from resources which, as your Lordship is aware, are already faced with more demands than they can easily satisfy. The idea that India is, in various ways, being exploited for the benefit of British manufacturers is, unfortunately, still prevalent among a large section of the educated public. That feeling would be confirmed and intensified if the cost of the proposal now before us were to fall on the people of India,
11. We now pass to a consideration of the argument that the alleged injury to British trade interests, caused by the existence of the opium stocks in China, has been occasioned by the action or inaction of the Government of India themselves. We understand that two reasons have been advanced for this view. The first reason is that, by our refusal to agree to Sir John Jordan's suggestion for the stoppage of sales in June 1912, the problem was complicated by the addition of over 10,000 chests to a market the outlets of which were rapidly dwindling. Sir John Jordan presumably las in mind his telegram of the 8th June, 1912, to the Foreign Office, in which, referring to the opium merchants' request for the suspension of sales, he said that "the piling up of opium in Shanghai for which there is no market must lead to a catastrophe." The allegation, we understand, is that, by our neglect of that warning, we have provoked some catastrophe now impending.
12. It would, we think, be unprofitable and unnecessary to discuss again the various points which were in issue in the telegraphic correspondence which took place at that time. But we must note again the practical difficulty mentioned in our tele- gram of the 6th Juns, 1912, which rendered it impossible to postpone sales without three months' previous notice. Your Lordship is already cognisant, we understand, of the material extent to which this narrows down the apparently important issue involved in this complaint. We would also invite your Lordship's attention to the following considerations: At no time while that proposal was under discussion were we informed that the observance of treaty engagements by the Chinese Government was in no circumstances to be counted on. On the contrary, we understood from Sir John Jordan's telegram of the 11th June, 1912, that the then situation in China was due to the disorganisation produced by the revolution, and it was definitely stated therein that the Chinese Government were sincere in their desire to uphold the opium agreements. We further understood from the Foreign Office telegram of the 17th June, 1912, that there was a distinct possibility of using the question of the recognition of the Chinese Republic to obtain an observance of the opium treaties. The situation, in fact, was, as we were led to understand it, a temporary one, and there was no indication that the efforts of diplomacy were likely to fail. We were aware, on the other hand, that the suspension of sales would be an irrevocable step, which would mean in practice the final abandonment of our treaty rights, and so long as there was a possibility that those rights, or a portion of them, might be secured, we should have regarded ourselves as fulse to the position of trust which we occupy in India if we had consented to forego them, Six months later, however, it became apparent to us that Sir John Jordan's belief in the sincerity of the Chinese Government had been nothing more then a pious hope, and accordingly, in a telegram of the 30th December, 1912, we told your Lordship that proposals we had put before you were based on the assumption that His Majesty's Government were unable to secure the immediate fulfilment of China's treaty obligations. In your telegram of the 2nd January, 1913, we were informed that that assumption was correct, and the following day we issued orders which brought to an end further exports to China.
13. Finally, we totally reject the postulate on which Sir John Jordan's complaint in this matter is based, viz, that the difficulty arises out of dwindling markets. The implication that there is no longer a legitimate demand for the stocks now held at the treaty ports is not compatible with the fact that in recent sale transactions in China our opium has been fetching the enormous price of 11,000 rupees or 12,000 rupees a chest. On the other hand, it is a patent fact that, from the outset of the abolition arrangements, the Chinese Government has been unwilling to abide by the spirit of their agreement with His Majesty's Government, and constantly endeavouring to compel us to go beyond its terms. Thus the closure of provinces has been pressed for before the production and import of the indigenous drug had even momentarily ceased. Similarly, we have had to agree to the final cessation of the export trade before the reciprocal engagements of China were discharged; and, in the meantime, it is admitted
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that illegal obstructions of every kind have been placed on the admission of the opium already imported into legitimate consumption. What is now happening, when the final disappearance of Indian opium is in sight, would merely have been antedated, if the discontinuance of the export trade itself had taken place a few months sooner. closer the stocks in China approached to vanishing point, the greater would have become the impatience of the Chinese to accelerate the end, and rid themselves finally of a trade which has always been associated in their minds with foreign intervention and the profits of which are mainly absorbed by foreigners.
14. The second reason put forward to establish the Government of India's responsibility in this matter has reference to the export of uncertified opium to non- China countries. In paragraph 6 of Sir John Jordan's despatch dated the 3rd December, 1913, the remarks contained in which were brought to your Lordship's notice in the Foreign Office letter of the 31st December, 1913, forwarded with your despatch dated the 30th January, 1914, it is pointed out that from 1910 onwards there has been a progressive reduction in the amount of opium allowed for exportation to those countries, culminating in an export of only 9,000 chests in 1913, and the fixing of the export figure for 1914 at 13,200 chests is represented as a retrograde and mischievous move. Sir John Jordan estimates that the maximum annual requirements of countries outside China are not more than 9,000 chests, and he states that an export in excess of that figure will probably result in the additional opium being smuggled into China, entering into competition with the existing stocks of certified opium, and thereby retarding their sale and hampering the removal of the awkward questions which, we are told, are a source of embarrassment to the Pekin Legation and to His Majesty's Consuls in China. A similar opinion was quoted in the Foreign Office letter of the 10th November, 1913, to the India Office, forwarded with your Lordship's despatch of the 5th December, 1913. 15. Before dealing with the allegation that we are aggravating the present difficulties in China by our policy regarding the non-China trade, we desire to observe that, in apeaking of the progressive reduction from 16,000 chests in 1910 to 14,000 in 1911, 13,200 in 1912, and 9,000 in 1913, Sir John Jordan is not, perhaps, fully aware that the last mentioned figure had, as pointed out in paragraph 5 of our despatch of the 17th January, 1913, no reference whatever to the actual requirements of the non- China markets at the time. When we obtained your Lordship's approval to the drastic reduction of our uncertified exports for 1918, we described it as a strictly temporary measure, designed to facilitate the diversion of the stocks in China to non-China markets. There was a bare theoretical possibility that the owners of the stocks might find it worth their while to sell some of their opium to one or other of the non-China countries, and we were anxious to leave nothing on our part undone which might conceivably facilitate the problem. The course of croats in 1913 proved the complete inutility of that measure. Even with this drastic curtailment of supplies, the price of our non- China opium never exceeded 3,050 rupees a chest, and by the end of the year it had fallen to under 1,600 rupees a chest, while the stocks of opium were being steadily cleared at prices approximating to 10,000 rupees a chest. We respectfully protest against the attempt to set up as a precedent action which we were careful to describe as a purely temporary expedient, and the whole raison d'être of which was the hypothesis that a standard of 9,000 chests admittedly represented much less than the normal standard of legitimate non-China consumption.
16. The allegation that the Indian Government are making an already difficult position still more difficult, by selling uncertified opium in quantities in excess of legitimate market requirements, is one with which we are familiar and which we have on several occasions rebutted to your Lordship's satisfaction. We invite attention to the correspondence, throughout which we have consistently maintained that we have done all in our power to ensure that the aggregate amount of uncertified opium sold by us is not in excess of the legitimate requirements of the countries concerned, if indeed it was sufficient to meet them. We are naturally not in possession of authori- tative information which would enable us to give a definite reply to the question asked in paragraph 2 of the Foreign Office letter of the 10th November, 1913, as to the At contemplated distribution of the chests of opium destined for non-China countries. our monthly auction sales at Calcutta, the purchase of a chest of opium carries with it the right of export, which is otherwise prohibited by law, and the Government of India in ordinary cases take no responsibility for seeing that no more than a certain number of chests go to a specified destination. Our main obligation is to see that our aggregate export does not exceed the aggregate requirements of the non-China countries. In framing our estimate of the latter, we are dependent on such information as your Lordship is able to supply us with, and we have nothing to add to the discussion of the
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