[This Document is the Property of His Britannic Majesty's Govu.n
339
OPIUM.
CONFIDENTIAL.
[10661]
C
门
13078
[January 28.]
SECTION 1.
19 MAR 15
No. 1.
Sir,
Messrs. E. D. Sassoon and Co. to Foreign Office.-(Received January 28.)
THE opium question.
17, St. Helen's Place, London, January 27, 1915.
We are very reluctant at snch a time as the present to re-open this question, but are compelled to do so owing to certain parties in Shanghai, not connected with the trade, agitating for the immediate closing of all the retail opium shops in the Settlement.
You are no doubt aware that, as a result of correspondence between His Majesty's Minister and the Municipal Council, it had been decided to submit a resolution at the annual ratepayers' meeting in March next to gradually reduce the number of shops by periodical drawings, the reduction to be regulated from time to time in accordance with the remaining stock, but in any event the closing of the last shop was to take place not later than the end of 1017. The council based their decision very rightly upon the principle that, in the suppression of the opium trade, no interest should be allowed to suffer.
This procedure does not appear to satisfy certain parties, who, without regard to the equity of the case, or its certain dangerous effect upon the financial well being of the Settlement, are urging upon the council the desirability of closing all shops immediately.
If this agitation meets with success, the remaining stocks, valued at 40 to 50 millions of taels, will become unsaleable. An erroneous impression prevails in some quarters that the council's decision is intended merely to safeguard the interests of a few individuals, whereas the whole business of the Settlement, as well as of the whole country, is involved more or less, the original importers now only holding about 25 per cent. of the stock still remaining.
**
Every foreign bank and practically every large native dealer in imported merchandise is largely interested, and, to quote from the "North China Daily News of the 15th December last :-
"When it is remembered that the net loss in the rubber boom-which was not over 5,000,000 taels to 6,000,000 taels-brought about a blight on the trade of Shanghai for a considerable period, not to speak of its effects on China, it does not need much stretch of imagination to picture what the effect of the attack on opium would be.
involving, as it does, the enormous sum of 40 to 50 millions of taels.
Had it not been for the illegal acts of the Chinese authorities, and their disregard of treaty obligations, the whole of the stocks would long since have been exhausted. Even as matters stand, we have not the least doubt that the remaining stocks could be liquidated within two years, perhaps less, if the council's decision is not upset, and no further restrictions are imposed by the Chinese until their own cultivation has actually ceased.
We beg that His Majesty's Government will telegraph to His Majesty's Minister that, in their opinion, the proposal of the Shanghai Municipal Council is equitable and meets with their approval.
Sir John Jordan mentioned a short time ago that there is a general belief that merchants are reaping a rich harvest by charging monopoly prices for their opium. As such a belief, if not contradicted, is calculated to alienate sympathy, and to place merchants in the position of being regarded as disentitled to consideration, we beg to point out that, since the formation of the combine in Shanghai, nearly four-fifths of the stock, namely, about 24,000 chests, have been sold at an average price of about 4,000 taels, which cannot be called excessive, in view of the very high figure at which it was originally purchased from the Indian Government, and the heavy interest and other charges which merchants have had to bear for three years.
The stocks have been reduced to less than 8,000 chests, a good portion of which has been purchased at high prices by dealers in Shanghai itself.
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These dealers,
: