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the Shan States do not indicate any increase in opium consumption among the Shans, probably because the opium habit is already general there, and the Shans have always been able to obtain as much as they require. Apart, however, from the increase in consumption among the Kachin and cognate tribes, which is resulting from the extension of cultivation, there is no doubt that the existence of large supplies of opium
> in the Kachin Hills and the Shan States renders more difficult the enforcement of our opium policy in Burma. Hitherto most of the opium grown in these regions has found its markets in China, Indo-China and Siam, but if these markets are closed and no concurrent steps are taken for the suppression or restriction of opium cultivation, this opium must necessarily find its market in Burma. There is also an obvious economic danger in the substitution of poppy for food crops in these regions which are entirely dependent for their food supplies on the locally-grown stocks. It may be added that the present time, when the fall in the price of opium has reduced the incentive to cultivation, is a favourable moment for inaugurating a policy of restric- tion or suppression of poppy cultivation.
5. The subject-matter of the correspondence may conveniently be subdivided into three heads:-
(1) The prohibition of the cultivation of the poppy in the Kachin Hill Tracts. (2) The restriction of the cultivation of the poppy in the Shan States. (3.) The prevention of the smuggling of opium from Burma and the Shan States
into China and Siam.
The general question of the assimilation of the internal opium policy in Burma to that laid down in the International Opium Convention has been dealt with in separate correspondence.
6. The first question has been fully dealt with in the correspondence enclosed with the Mandalay Commissioner's letter, dated the 15th November, 1919. It appears unnecessary to examine that correspondence in detail, for in his letter Mr. Cabell states that he approves of the policy proposed by Colonel Aplin in his letter, dated the 8th April, 1914, a copy of which was forwarded to you with Mr. Mosely's letter, dated the 23rd December, 1915, and as far as Mr. Arbuthnot can judge from the proposals suggested in that correspondence, the only course to adopt is that which these two officers recommend for acceptance. These proposals have been summarised by Mr. Cabell as follows:-
(1.) That the Kachin Hill Tribes Regulation should be amended so as to make cultivation of the poppy in any hill-tract to which the regulation applies illegal;
(2.) That orders should be proclaimed in all villages in the hill-tracts that after the present season the cultivation of the poppy will be entirely prohibited, that any crop found will be destroyed and that the owner of the crop will be liable to prosecution;
(3.) That in the first season after the proclamation of the prohibition all poppy crops found should be destroyed, but prosecution should not be resorted to, but that in subsequent years prosecution should be undertaken, light punishment being inflicted in the case of first offence;
(4.) That Chinese subjects found cultivating the poppy on the Burmese side of the frontier should be similarly treated, and should also be dealt with under the Frontier Crossing and Disturbed Districts Regulation and expelled from British territory.
The amendments to section 31 of the Kachin Hill Tribes Regulation, which were suggested by Colonel Aplin in his letter of 8th April, 1914, above referred to, are also regarded as suitable by the Commissioner, Mandalay Division, and by the Deputy Commissioners of Katha, Bhamo and Ruby Mines. The Deputy Commissioner, Myitkyina, deprecates the taking of any action. Putao, it is suggested, may be left out of consideration for the present.
The Financial Commissioner recommends that action should be taken on the lines proposed by the Commissioner to prohibit the cultivation of the poppy in the Kachin Hill Tracts in the Katha, Bhamo, Myitkyina and Ruby Mines Districts, and also that steps should be taken to amend the Kachin Hills Regulation in the manner proposed by the Commissioner.
7. Mr. Arbuthnot agrees with Colonel Aplin and Mr. Cabell that it is not possible at present to take any measures to prohibit the possession of opium among the
Kachins. If, however, the cultivation of the poppy is entirely prohibited in the Kachin Hills, some arrangements will have to be made for the supply of opium to Kachin consumers. This is a matter which is hardly touched on in the correspondence and which will have to be further considered by the Excise Commissioner in consulta- tion with the local officers. Since, however, it will be at least two years before the policy of prohibition, if adopted, can be made effective, there will be ample time for the settlement of this matter. Meanwhile, it is desirable that a decision on the question of the policy in regard to the prohibition of the cultivation of the poppy should be arrived at at an early date.
8. I am, in this connection, to refer to the correspondence ending with Mr. Keith's letter dated the 3rd December, 1914, and to suggest that the orders conveyed in Local Government's letter dated the 23rd April, 1901, directing that until further orders Chinese British subjects permanently residing in a Kachin Hill Tract should, as regards the cultivation of the poppy and the manufacture, posses- sion, transport and sale of opium, be subjected only to the restrictions for the time being in force in the case of hill tribes to which the Kachin Hill Tribes Regulation has been made applicable, should now be abrogated.
9. The second question raised in this correspondence is that of the restriction of the cultivation of opium in the Shan States. The latest opinions of the local officers are to be found in the note, dated the 28th May, 1919, by Messrs. Stirling and Thornton, letters by the same officers dated the 14th and 24th July, 1919, respectively. and a long letter, dated the 12th March, 1920, from Major Butterfield, Superinten- dent, Northern Shan States, to the Revenue Secretary. Messrs. Stirling, Thornton and Lister discussed this last letter with his Honour on the 5th April at Taunggyi, and their conclusions were summarised in a note, dated the 8th April, 1920, prepared by the Chief Secretary. In this note Messrs. Stirling and Thornton reaffirmed their adherence to the proposals made by them in their note of the 28th May, 1919. The proposals are that Government should issue an immediate notification of its intention to control the output of opium in the cis-Salween States after two years from the date of the notification. These two years should be devoted to preparing estimates of the amount of opium required in the Shan States. The control exercised should be such as to reduce the cultivation in the cis-Salween States to the barest minimum required for the internal consumption of the States. Indeed it might be possible to reduce cultivation below this minimum, as the trans-Salween States would probably always have a surplus for export to the cis-Salween States. The result of their proposals would be that at the end of two years the total prohibition of cultivation would be effective in many localities in the cis-Salween States. Where cultivation was permitted in these States, it should be under licence and at a heavy revenue rate, the terms of which could be considered and determined in a notified period of two years. Licensed cultivators should be permitted to sell only to the recognised vendors of the various States. Presumably the method by which effect would be given to these proposals would be by the extension, to the cis-Salween States, of certain sections of the Opium Act, and by framing rules under that Act for the regulation-
(a) Of the cultivation of poppy under licence:
(b) Of the sale by the licensed cultivators to recognised opium vendors; and (c.) Of the amount to be sold by these vendors.
But until the enquiries, which Messrs. Stirling and Thornton consider necessary before any form of control is instituted, have been completed, it is impossible to make any useful suggestion in respect of the form which these rules should take. The policy, however, suggested by Messrs. Stirling and Thornton appears to be the only practical one, and if that view is accepted all that is required at present is to issue the notifica- tion intimating the intention of Government. The Financial Commissioner recom- mends that steps should be taken at an early date to give effect to the suggestion.
10. The third question which is raised in the correspondence is that of the prevention of smuggling from Burma and the Shan States into China and Siam. For the moment the traffic in opium from the Shan States into China has considerably diminished and the present tendency is for opium to be imported into Burma froin China. There has, however, in the past been a great deal of sinuggling of opium from the Shan States, and if the supplies in unnan at any time prove insufficient, this smuggling on a large scale is likely to be revived. The prohibition of cultivation of opium in the Kachin Hill Tracts and the restriction of cultivation in the cis-Salween States of the Shan States would obviously make for a great reduction in the amount
C [5201 s-1]