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揭露
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In their defence the importers state that in the year, since the formation of their combine" with the Chinese dealers about 20,000 chests have been taken out of bond and 23,000 chests actually sold for cash, despite the Chinese Government's doing everything possible to exclude Indian opium from all the provinces of China. The responsibility for the practical doubling of the wholesale price of the drug is laid upon the native dealers, whose action is justified as inevitable in face of a keen demand for a diminishing commodity; but the resulting immense profit on stocks which a year ago the importers were ready to sell ex-duty at an average of 3,000 taels a chest is not alleged to pertain only to those dealers.
Messrs. Levy and Ezra orally explained that it would not be fair to purchasers from the combine to lower its rates, though they added that those purchasers had recently dropped their price by 1,000 taels.
The large stock in pawnshops and dealers' hauds may, as the importers told me, indicate no slackening of consumption on account of the rise in price, but only be a But I venture to precaution on the buyers' part against a further advance in cost.
think that, if no steps are taken to effect au ending of the business within a definite period, the comparatively small balance of stock will dwindle more and more slowly and the price rise faster and faster in consequence of the Chinese dealers' reliance on the security of that stock's remaining in foreign hands and under their cognisance. The importers no doubt will never refuse to sell; but by their own confession they will not sell under the rate fixed by the dealers, who are, also confessedly, bound to take every possible advantage over consumers that the situation may give them. The time for a definite termination of the trade appears to have come, and it is suggested as fair to all the interests concerned, that a final convention be made under which China should restore the conditions obtaining previous to her campaign against the Indian drug for a period of six months, the consideration being that at the end of that term all stock remaining in foreign or native hands in the Shanghai Settlements should be delivered to her against treasury bonds at the rate of 3,000 taels a chest ex-duty, and all licences to sell opium cease.
The reopening of all China to Indian opium would be justified in part as a penalty for her continued breach of treaty, and in part as a means of supplying the inveterate smokers, whose existence is admitted, with a reasonable stock to enable them to get free of the habit, while the shortness of the period, after which any connection with the trade would bring British subjects under our Order in Council's amuggling provisions, constitutes a very light cost for freeing her finally of what she holds to be a curse.
The reopening would deprive the importers of all shadow of grievance, in view of the period being sufficient at last year's rate of consumption, with all China closed to clear off the whole stock.
The ensured purchase of any balance at the price acceptable a year ago would obviate the alleged danger of a panic through throwing the whole stock on the market, while checking the supposed inability of their Chinese customers to resist squeezing the retailers and the consumers.
The payment in treasury bonds would obviate any conspiracy to embarrass China by holding over large stocks, though this risk is, I think, very remote, and more probably the whole stock would be out of the importers' hands loug before the end of the term.
Six months' notice to the shops in the Settlements would not be unreasonably short in view of their huge profits recently, and the Settlements would thus come into line with the rest of the country.
Enclosure 2 in No. 1.
I have, &c.
E. H. FRASER.
Consul-General Sir E. Fraser to Messrs. David Sassoon and Co. and other British Opium Importers, Shanghai.
Gentlemen,
Shanghai, April 4, 1914.
I HAVE received instructions from the Foreign Office through His Majesty's Minister to warn you that five more provinces may be closed to Indian opium at an early date and it would, therefore, be prudent of you to take advantage before it is too late of every opportunity to dispose of your stocks.
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The Foreign Office observes a steady upward movement in opium prices at Hong Kong and in the treaty ports which, together with the steady diminution in the monthly returns of opium sold, suggests that an attempt is being made to charge monopoly rates to the Chinese dealers.
Enclosure 3 in No. 1.
I am, &c.
E. H. FRASER.
Messrs. David Sassoon and Co. and other British Opium Importers, Shanghai, to Consul-General Sir E. Fraser.
1914.
ģ
Sir,
Shanghai, April YOUR letter of the 4th April has been considered by ourselves and the other British opium merchants here, and we have the honour to call attention to the following points which have not, perhaps, been fully appreciated by the Foreign Office.
In the letter before us we are advised that it would be prudent to take every advantage, before it is too late, of every opportunity of disposing of our stocks.
We beg to state that we are doing all in our power to dispose of our stocks, but the opportunities of doing so have been limited by the action of the Chinese Government in practically closing the whole of China since the end of 1912 to Indian opium contrary to treaty..
Having thus deprived us of all outlets for the commodity is it to be wondered at that it takes time for the stocks to be consumed?
In spite however of the closing of the markets of China to us, we would ask you to consider the results we have achieved and of which we are, we think justly, proud.
In the beginning of 1913 there were nearly 31,000 chests of certified opium; these have now been reduced to 11,600, of which 3,600 have been sold and paid for, but are awaiting delivery, so that there are now only 8,000 chests to be disposed of. For the first six months of last year about 1,200 chests a month were delivered. In the second half of the year there were two or three months of very heavy deliveries due partly to the relaxation of the restriction on outlets from Shanghai due to the insurrection in the summer, and partly to buying on speculation for hoarding.
In January 1914 the deliveries were 1,025 chests; in February 1,179 chests. Last month the market was affected by the trade depression and by the previous hoarding of stocks. During March and this month deliveries of all other kinds of merehandise have fallen off, money has been very tight in Chinese business circles, and the result has been that the local retail shops instead of making further purchases have been drawing on stocks previously taken delivery of, and which have been treated as having gone into consumption. A large amount of that opium was bought and pawned with the pewnshops, and this has lately been going into consumption. Further, the rigorous search for arms, due to the fear of another revolt and to the White Wolf movement, has made further secret export of opium impossible, as soldiers, finding opium when searching for arms, would certainly confiscate it. Furthermore, trade in Hong Kong has been for some time at a standstill owing to the currency question in Canton which has paralysed business in South China.
We venture to submit that in view of the above statement made by the Foreign Office that it observes a steady diminution in the monthly returns of opium sold is hardly justified, and in any case is satisfactorily explained by the facts of the case.
The Foreign Office further says that the steady upward movement in prices, coupled with the alleged diminution in returns of sales, suggests that an attempt is being made to charge monopoly prices to the Chinese dealers.
We should be much obliged if you would point out to the Foreign Office that all increases in prices made by the combine invariably follow, and do not precede, the increases made by the dealers.
If the demand remains pretty constant, as it does, while the stocks to meet the demand continually dwindle and cannot be replaced, a rise in price is inevitable. The Chinese dealers therefore find that they are in a position to demand higher and higher prices from the local retail shops, and the price at which the combine sells does not affect the price obtained by the native dealers that depends on demand and supply. The combine will supply all that the market can absorb it has supplied 3,600 chests, for which the dealers paid 18,000,000 taels over and above deliveries; it has never
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