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the Colony or for smuggling into China. Opium dross and ha lan are bought from the public. Tau taing ko is produced in the Goverment Factory, but it is a recognised perquisite of the opium boilers who would smuggle it on to the market if they could not otherwise dispose of it; and the Government accordingly purchases it from the boilers at a rate of 83.40 per chest of raw opium.
4.
It was formerly the practice of the Opium Farmer to mix with his prepared opium a certain quantity of the ingredients of dross opium and to use the remainder for the praporation of dross opium for the market. The Government, dosiring to keep its prepared opium of as pure a standard se possible, has never had resort to such mixing, and it has at the samo time made it its policy to refrain from pushing in the least degree the sales of its dross opium; with the result that those s∙les have considerably decreased. There is now a more or less constant demand, by a certain class of smoker, which results in a ale of some 300 to 350 taels
monthly.
5.
In consequence of the Government's policy in this matter large surplus stocks of opium dross, ha lan, and tau taing ko ore regularly accumulated, and these re from time to time got rid of by dumping at sen. Since the beginning of 1917 the use of ha lan has been entirely dis- -continued, and in the period 1st January, 1916, to 30th September, 1919, 27,213 taels of this drug have been destroy- -ed. In the s me period 87,477 taels of opium dross and 49,360 tacls of tau tsing ko have been destroyed. The adop- -tion of this policy has involved a considerable financial loss to the Government, as its purchase price has averaged 81.60 per teel for opium dross, 80.60 per tael for ha lan, and 80.10 per tael for tau tsing ko.
6.
In July last it was decided to close the Factory where dross opium was made, after preparing a supply
estimated