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must certainly befor Chinese opium obtained from Tung Hing in Chinese territory but paid for through remittances to Haiphong, as is in fact the usual way to pay for opium imported from Tung Hing, where French notes are preferred in opium dealings to the depreciated Chinese currency. That large quantities of Chinese

opium must have been used in the preparation of the large amounts of opium sold every day is certain, because

of the impossibility of using more than a certain amount of Pe: sien opium in blending.

Pchases - Dross.

Dross opium had to be returned in certain proportions from 11 the divans, and some payment was made.

Large quantities were also bought from various

firms, who apparently made it a business to deal in

dross and sell it to the farmer. This would be used

in the proporation of the cheaper brands such as "Horse”. No dross opium was sold made of dross only.

7- Tees paid to the Government of Macau.

Officially the arrangement was said to be

that the Tarmer was to pay $3,000 a chest on all Indian opium obtained from other places than India, but if opium could be obtained from India he was to pay at

the rate of $7,000 per chest, as this opium was so much cheaper than that purchased indirectly. It was said

that this arrangement was to be only a temporary arrangement and that there was no definite contract, and that it could be terminated at any time, quite bontrary to what the Portuguese Delegate declared at Geneva.

That this was so the following points seem to

show. On 13/7/24 the farmer deposited $770,000 with the Government, but on 12/6/24 this deposit was returned to

him.

On

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