[This Document is the Property of His Britannic Majesty's Government.]
0.0.
OPIUM.
CONFIDENTIAL.
[184795]
14229
¡December 4.
REC
SECTION 1.
156
REGE 25 MAR 16
No. 1.
Sir J. Jordan to Sir Edward Grey. (Received December 4.)
(No. 300) Sir,
Peking. November 10, 1915. IN my despatch No. 11 of the 15th May last, I suggested that the agreement between the Shanghai and Hong Kong Opium Merchants Combines and Mr. Tsai Nai Huang representing the Chinese Government, whereby the former agreed to pay a contribution of 3,500 dollars on every chest of Indian opium sold by them, was probably the prelude to a scheme for the establishment of an opium monopoly. This forecast has been justified by the conclusion of an agreement between the Hong Kong Opium Combine and Tsai Nai Huang whereby the combine sell to Tsai 1,200 chests of certified opium.
I have the honour to transmit herewith a despatch from His Majesty's acting consul-general at Canton, enclosing a copy of the agreement in question and reporting on the proposed opium monopoly for the province of Kuangtung.
Enclosure 1 in No. I.
I have, &c.
J. N. JORDAN.
(No. 91.) Sir,
Acting Consul-General Wilton to Sir J. Jordan.
Canton, October 19, 1915. I HAVE the honour to forward herewith copy of an agreement signed on the 1st October between Ts'ai Nai-huang and the Hong Kong Opium Combine.
It will be remembered that an agreement was signed at Shanghai between Tsai Nai-huang and the Shanghai Opium Combine on the 1st May last to which the Hong Kong Combine adhered. That agreement provided for the free circulation of Indian opium within the three provinces of Kiangsu, Kiangsi, and Kwangtung in return for a payment to the Chinese Government of a voluntary surtax of 3,500 dollars a chest. Previous to the date of the agreement, the Hong Kong Combine had been contributing to the privy purse of the Military Governor a sum of 600 dollars a chest on all Indian opium imported into the province through the regular channels. The sales, however, had fallen off owing to the stronger inducements held out to General Lung and his military satellites by the traffic in Yunnan opium and, as far as the province of Kwangtung and the Hong Kong Combine were concerned, the agreemement did not work satisfactorily owing to the competition with the certified drug of native (Yünnan) and uncertified Indian opium smuggled into the province from Macao, Kuangchouwan, and Tongking.
The skeleton of the present agreement was put together during the visit of Ts'ai Nai-huang to Hong Kong in September last,
At that time the combine was not at one in their views. On the one side were the speculators and the owners in India, for whom certain firms were agents, who were inclined to trust to the May agreement, and to hold out for better terms. On the other side were the firms of long standing in the trade, which were anxious to terminate the trade as speedily as possible on terms which could be regarded as favourable. Ultimately wiser councils prevailed, and the agreement was successfully concluded on Ts'ai's return from Canton. His task here was by no means easy, and he appears to have overcome opposition through the influence of General Lung, to whom he made generous largess and lavish promises.
The present agreement provides for the taking over of 1,200 chests at an average price approximately of 8501., excluding duty and surtax, and arrangements are made in clause so that delivery of the total quantity may be completed not later than the 31st March, 1917, the date of the termination of the May agreement. One-half of the security mentioned in clause 9 has been deposited in the Hong Kong and Shanghai Bank.
[2525 d-1]