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HONG KONG, 30th. June 1930.
CONFIDENTIAL.
Sir,
We duly received your letter of 20th. May, S.I.E.No.12/18 No.125, with regard to the extent to which smuggling is prevalent.
All the information we have received goes to show that since the Chinese Maritime Customs Import Tariff was raised at the beginning of last year, the smuggling of goods into China has assumed extensive dimensions and that, insofar as the territory adjacent to this Colony is concerned, it is mainly conducted from Hong Kong on organized plans The goods smuggled range from those of high value in relation to bulk and on which Customs duty and Native taxation is high, such as piece goods and sewing cotton, to all commodities which can profitably be brought into such traffic..
A well organized ring is reported to be engaged, based in Hong Kong with established ramifications, controlling not only the means of conveyance but also the delivery and disposal of the goods; agents of the smuggling syndicate will openly undertake with traders to deliver goods to consignees in circumvention of duty or tax, for a fixed con- sideration. Doubtless you have addressed your enquiries to merchant firms who can give you information upon these points and such organi- zations should be able to locate them and take such measures to suppress them as the Government consider desirable.
We understand smuggling is effected chiefly by motor craft and junks collecting their cargoes in the Colony and landing such goods at unfrequented places on the Coast and in the Canton Delta or at Swatow or Amoy or Canton. These methods form the main operations of the organized smuggling: the vessels, through the organizations based in Hong Kong and probably by individual smuggling, having collected their cargoes in the Colony and landed them at nearby coastal or river point or in some instances as a blind only the valuable cargo, than put in to a Treaty port and enter at the Customs with a quantity of cheap stuff. Once these craft get away from the Colony the expanding area open to them makes it increasingly difficult to follow them up.
With regard to the Chinese Maritime Customs measures to stop smuggling, they rely principally on patrols, informers, search par- ties, confiscation and heavy fines. They would require a great number of ches and a very large preventive service spread over a wide coast ine to cope with the magnitude of the smuggling now taking place.
Smuggling by junks and motor boats, as explained above, forms the main field of operations, but it has also increased considerably on steamers by means of:-