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Enclosure 2 in No. 1.
Agreement.
THIS AGREEMENT made at Shanghai the 25th day of January, 1917, between the
Shanghai Opium Combine, of the one part (hereinafter called "the Combine"), and ( Feng Kuo Chang, the Tuchun of Kiangsu; Zee Yao Ling, the Civil Governor of Kiangsu; and Wong Che Shiwui, the special envoy for the prohibition of the sales of opium in Kiangsu, Kiangse, and Kwantung; acting for the Chinese Government, of the other part.
WHEREAS by an agreement dated the 1st day of May, 1915, and made between the Shanghai and Hong Kong Opium Combines, of the one part, and the special envoy for the prohibition of the sales of opium in Kiangsu, Kiangse, and Kwantung, of the other part, the said envoy undertook to petition the Chinese Government to take stringent and effective measures for the detection and suppression of the illicit sales of opium, with a view to its extinction, and enable the said Combine to dispose of their stock of Indian opium legitimately held by them within the period in the said recited agreement specified, viz,, the 31st day of March, 1917;
And whereas owing to unexpected and unavoidable causes the objects of the said recited agreement could not possibly be achieved within the time therein limited;
And whereas both the Combine and the Chinese Government are anxious to complete the suppression of the opium trade in China and being it to a speedy end;
Now it is hereby agreed as follows :-
1. The Combine will sell to the Chinese Government and the Chinese Government will purchase from the Combine the whole residue of the stock of Indian opium remaining in the hands of the Combine on the 31st day of March, 1917, excluding the stock of opium in Hong Kong on the 1st day of January, 1917, at 8,200 taels of Shanghai sycee per chest, or the equivalent thereof in Mexican dollars, according to the rate of exchange ruling on the said 1st day of March, 1917. The Combine estimates the stock of opium in its possession and control on the 1st day of January, 1917, to consist of 2,100 chests.
2. The Combine hereby acknowledges that the object of the Chinese Government in purchasing the said opiam as aforesaid is for the purpose of securing it for medicinal purposes and not otherwise for gaiu,
3. One chest of Malwa opium shall be reckoned to weigh 1 pical, and one chest
of Bengal opium to contain forty balls in accordance with custom.
4. The Combine shall continue to pay the Chinese Government the contribution
of 3,500 dollars of Mexican currency on every chest of Indian opium taken delivery of from the Combine in Shangbai in pursuance of the hereinbefore recited agreement up to the said 31st day of March, 1917.
5. Payment for opium purchases under this agreement shall be made by the Chinese Government by means of Chinese Government bonds guaranteed by the Chinese Government, and secured on the revenue derived from the stamp duty, out of which commencing from the first year hereof a sum not exceeding 2,500,000 dollars shall be annually set aside for the purpose of meeting the obligations hereunder. Nothing herein contained shall be construed in anywise to empower the Combine to have any control over the stamp duty, but the Chinese Government is bound to fulfill all stipulations hereunder.
6. Such bonds shall bear interest at 6 per cent. per annum payable every half year on every ist day of January and every 1st day of July, the said interest to accrue from the ist day of April, 1917.
7. The amount of bonds to be issued by the Chinese Government for the purchase of opium as aforesaid shall not exceed 10,000,000 taels of Shanghai sycee, and shall be redeemable as follows: Twenty per cent, thereof during the sixth year of issue and every succeeding year till the end of the tenth year, when they must all be redeemed.
8. In order to obviate disputes the Chinese Government binds itself not to accept any opium offered by any person or body of persons except the Committee of the Combine.
9. This agreement is executed in sextuplicate for the file of each of the following parties: The Chinese Government, His Britannic Majesty's Minister at Peking, the Tuchun of Kiangsu, the Civil Governor of Kiangsu, the Special Envoy for the Prohibi- tion of the Sales of Opium in Kiangsu, Kiangse, and Kwangtung, and the Chairman of the Shanghai Opiuni Combine.
In witness whereof the said parties hereto have executed this agreement.
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Enclosure 3 in No. 1.
Supplementary Agreement,
SUPPLEMENTARY to the agreement made between the Shanghai Opium Combine of the one part and Feng Kuo Chang, the Tuchun of Kiangsu; Zee Yao Ling, the Civil Governor of Kiangsu; and Wong Che Shwui, the Special Envoy for the prohibition of the sales of opium in Kiangsu, Kiangse, and Kwangtung, acting for the Chinese Government, of the other part, and dated the 28th day of January, 1917 (hereinafter referred to as the "principal agreement").
IT is hereby mutually agreed and declared as follows :—
of the year
1. Payment for opium purchased by the Chinese Government in pursuance of the principal agreement shall be made by means of 6 per cent. bonds of the first Chinese Republic, the issue whereof was authorised by virtue of the law passed by Parliament and duly promulgated by the President on the 19th of February in the second year of the Republic in accordance with the constitution.
2. Such bonds shall bear interest at 6 per cent. per anuum, payable half-yearly, and shall be secured on the revenue derived from the tax on title de ds for land aud the stamp duty as provided in the law authorising the issue of the same.
3. Provided, however, that, notwithstanding the period of thirty years limited for the redemption of the said bouds as provided by law, all such bonds given by the Chinese Government in payment of opium as aforesaid, unless earlier drawn and redeemed, shall be paid off not later than ten years from the 1st April, 1917, out of the proceeds of the sale of the opium for medicinal purposes, purchased as aforesaid, or from other sources, as suits the Chinese Government.
4. Clauses 5, 6, and 7 of the principal agreement shall be deemed to be amended so far as they are inconsistent with the above provisions but not further. In other respects the principal agreement is hereby confirmed.
Dated the 29th day of January, 1917.
Gentlemen,
Enclosure 4 in No. 1,
Mr. Alston to Messrs. D. Sassoon and Co.
Peking, February 26, 1917.
I BEG to acknowledge the receipt of your letter of the 5th instant, written on behalf of all British importers of opium, in which you enclose copy of two agreements made with the Chinese Government and invite my approval of the arrangements thereby made for the sale of the stocks of opium remaining unsold on the 31st March
next.
I have to point out that these agreements were drawn up without consultation with this Legation, and that the introduction of His Majesty's Minister's name in article 9 of the main agreement is entirely unauthorised.
I am not in a position to take cognizance of these agreements or to take any action in regard thereto unless and until they are communicated to me officially by the Chinese Government in the proper manner through the Wai-chiao Pu.
In the event, however, of such communication being made to me, I shall refer the matter for the instructions of His Majesty's Secretary of State for Foreign Affairs, to whom I have forwarded copies of your letter and of the agreements.
I am &c.
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B. ALSTON.