No. 621.

Sir,

GOVERNMENT HOUSE,

HONG KONG.

10th August, 1938.

16

37570/13

I have the honour to invite attention to Mr. Severn's despatch No.350 of the 4th October, 1913, and Mr. Harcourt's telegram in reply of the 2nd November, 1913, on the subject of the constitution of an opium reward fund. Approval was then given to a system by which forfeitures in respect of opium and other dangerous drugs should be paid into a reward fund which was to be utilized first for payment of rewards, any balance in the fund in excess of $5,000 at the end of each financial year being transferred to revenue.

Section 41 of the

Opium Ordinance No.7 of 1932 gives legislative sanction to this system in the case of opium forfeitures, but no similar authority at present exists in respect of forfeitures of other dangerous drugs. The actual practice appears to have been to pay forfeitures in respect of opium into the fund and to meet from it all rewards whether in respect of opium or other dangerous drugs. The fund is in a healthy position, the balance in it on the 31st December, 1937, being $31,414. The practice of regularly transferring to revenue excesses in the fund appears to have fallen into desuetude.

THE RIGHT HONOURABLE

MALCOLM MACDONALD, M.P.,

&c.,

&C.,

&C.

2.

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