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that in order to carry out the unholy pact between the opium combine and the Chinese authorities, the whole machinery of the Mixed Court, supplemented by an army of private spies and informers is being devoted to the prevention of smuggling of native opium-the object being not to defend the people from a harmful drug, nor to safe- guard the revenue of the country, but to protect the interests of the dealers in Indian opium from the competition of the cheaper Chinese variety. There is some evidence that in spite of the apathy in regard to opium reform displayed by the Chinese Government during the last two years, public opinion in British commercial circles in Shanghai is growing restive on the subject, and that there is an anxiety to get rid of the traffic in Indian opium for good and all.
It is easier, however, to appreciate the evils of the situation than to indicate the appropriate remedy. Sir E. Fraser suggests that it should be made a criminal offence for any British subject to have any interest in opium after the 31st March next. That penal legislation of this kind may be necessary sooner or later is not improbable, but I I presume that apart hardly see how it is possible to introduce it at so early a date. from matters of peace, order, and good government, it is undesirable to create new criminal offences for British subjects in China, except for the sake of enforcing international obligations or of giving effect to Chinese legislation. As things stand at present, under our agreements with China on the subject of opium, the trade in Indian opium in the provinces not yet closed, is undoubtedly legitimate, and unless a new agreement is concluded, it will remain legitimate until the last of the provinces is closed to Indian opium, a consummation which cannot be effected at any rate until some time after the end of March. As for the provisions of The Hague Conference, these seem to contemplate legislation strictly in consonance with the measures adopted by China herself, and I do not think they would justify penal legislation in advance of such measures. The Penal Code of China, which has been suggested as a basis for King's Regulations prohibiting trade in opium, seems to me to afford a still more precarious foundation for such legislation.
Apart from all questions of legal procedure, the enactment of penal legislation independently of treaty obligations is open to the criticism that it would be inconsistent with the policy governing our procedure in regard to the opium question in the last ten years, namely that of encouraging the Chinese Government in the suppression of opium by restricting the trade in Indian opium pari passu with the restrictions imposed on the cultivation and consumption of the native drug. His Majesty's Government can claim with confidence that their position from this point of view has hitherto been unassailable. I have lost no opportunity of impressing on the metropolitan and provincial authorities that the combine agreements signed at Shanghai on the 1st May, 1915, and at Hong Kong on the 1st October in the same year were concluded without my cognisance or support, and the Chinese Government are well aware that if the term of these agreements is extended, the responsibility for such action will rest entirely on their own shoulders. It is the Chinese, not the British, Government that has broken step, and in my opinion it is preferable to endeavour to restore uniform movement, rather than to initiate an independent and more rapid pace on our side alone,
Indications are not wanting that a continuity of policy may not prove so difficult The reference in the Shanghai despatch to the as it appears at the present moment. "Yunnan opium case" is to a scandal that has caused considerable excitement in Chinese circles. A party of official delegates from the Yunnan provincial government to a political conference at Peking, including the Minister of Justice in the new Cabinet, arrived in Shanghai on the 5th ultimo with a large quantity of baggage, which was passed without examination by the Customs in accordance with official applications for special privileges made in Yünnan by the Minister of Justice himself, and in Shanghai by the highest Chinese authority, the Taoyin. It was then discovered that sixty trunks of the party's baggage contained Yünnau opium. Twenty-four of these trunks were found and confiscated, the value of their contents being variously estimated at 375,000 dollars to 1,000,000 dollars. Thirty-six trunks are still missing. Six of the delegates were arrested and tried at the Mixed Court, of whom three were sentenced to various terms of imprisonment, one was fined, and two were acquitted. The Minister of Justice was declared by the prosecution to be innocent, and his appointment to the Ministry has since been confirmed by Parliament; but a large body of public opinion considers that his innocence has not been satisfactorily established. The Taoyin, of Shanghai, was of course not charged, but his complicity was fully demonstrated in court, and he has since resigned office on the plea of ill- health. The whole incident has revived interest in the anti-opium movement and in
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the question of the sincerity of the new Government in connection therewith, and the effect can hardly fail to be to strengthen the hands of the reformers.
At an interview with the Acting Minister of Foreign Affairs this afternoon, I recapitulated the course of events in connection with opium suppression, and asked what was the present attitude of the Chinese Government. Dr. Chen said that the matter had been recently discussed by the Cabinet, and that it had been decided to adopt a policy of vigorous suppression. In particular the request made by the opium combine for an extension of the time limit of the agreement had been decisively and finally rejected, in spite of the sacrifice of revenue thus involved. As regards the closing of the provinces, he promised to examine the questions and communicate with me on the subject later.
I confidently anticipate that application will be made in due course for the joint inspection of Kiangsu and Kiangsi next spring, and for the closing without examination of the few remaining unclosed provinces, into which Indian opium does not as a rule find its way.
If this application is complied with, and if as a result of inspection the two provinces named are placed upon the list, the Shanghai trade will come to an end, and the only important province still open to Indian opium will be Kwangtung. Conditions are too unsettled in that province at present to enable any forecast to be made as to the date at which it will eventually be closed, or as to the procedure which can be adopted for this purpose.
(Copy to India.)
I have, &c.
J. N. JORDAN.
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