[This Document is the Property of His Britannic Majesty's Government.]
12
OPIUM.
fc.o. | 24265
[May 4.]
SECTION 2.
CONFIDENTIAL,
[(19655]
16 JUL 14)
No. 1.
Sir J. Jordan to Sir Edward Grey.-(Received May 4.)
(No. 163. Confidential.) Sir,
Peking, April 21, 1914. THE warning contained in your telegram No. 61 of the 1st instant was duly conveyed, through His Britannic Majesty's consul-general at Shanghai, to the opium merchants at that port, and the despatch from Sir Everard Fraser (copy of which I have the honour to enclose) forwards their response to the advice tendered by His Majesty's Government,
The reasons given by the merchants for the recent diminution in the monthly sales do not carry conviction to my mind, nor do I find in the statements made by them any serious attempt to disprove the suggestion that advantage is being taken of the situation to exact monopoly rates for the remaining stocks. As Sir E. Fraser indicates, opium which a year ago was sold for 3,000 taels a chest ex-duty, now realises nearly double that amount, and it is not denied that the enormous profits of the trade are shared by the merchants as well as the dealers. The combine claims credit for the results it has achieved, and avers that it has done all in its power to expedite sales; but the state- ment would carry more weight if it could be shown that it had conducted the trade on a normal scale of profits. The sale of 3,600 chests, over and above ordinary deliveries, for a sum of 18,000,000 taels, is cited as an illustration of the combine's readiness to sell; but to gauge the merit of this achievement one would like to know what this opium with which they parted at 5,000 taels a chest originally cost the merchants, and whether sales could not be expedited by reverting to the price of 3,000 taels a chest which ruled a year ago. The deliveries for March last only amounted to 322 chests, and in these circumstances one is not so greatly impressed with the arguments as to the necessity of maintaining confidence and averting a panic as with the apparent determi- nation of the combine and the dealers to make a rich harvest out of the unique monopoly they enjoy.
The stocks are, I gather, largely destined for consumption in the international settlement, or for concealment underground for use in future years, and in either case the indefinite continuance of the trade is open to grave objection. The settlement offers the anomaly of being almost the only place in China where the opium trade is unmolested, and the Chinese authorities regard the secret hoarding of stores of foreign opium as likely to prove an obstacle to their work of suppression.
To
The solution which Sir E. Fraser suggests does not commend itself to my judgment. reopen the closed provinces to the sale of foreign opium would be a retrograde step which neither the British nor the Chinese Government could, in my opinion, defend. And it would be most unfair to the provinces which, as the result of great efforts and immense sacrifices, have succeeded in securing immunity from foreign opium. The provinces have been declared free after a most searching investigation, and although their present immunity may not prove to be permanent, still it is not for us to encourage a relapse; and I can think of nothing more likely to lead to that result than the virtual breach of faith which Sir E. Fraser's proposal seems to involve
I have, &c.
J. N. JORDAN.
Enclosure 1 in No. 1.
Consul-General Sir E. Fraser to Sir J. Jordan.
(No. 38. Confidential.)
Sir,
Shanghai, April 16, 1914.
BEGGING reference to your telegram No. 18 of the 3rd instant, and to my reply No. 36 of the 6th instant, I have the honour to forward copies of my letter to the opium importers and of their answer.
[2146 d-2]