E 3
16. There can be no doubt that this amazing increase is the direct result of the shortage of illicit raw opium which, severe towards the end of 1938, has deepened steadily throughout the whole of 1939 and still shows no signs of easing. With the extension of the Sino-Japanese conflict to South China the Hong Kong market has been virtually cut off from its supplies of Chinese raw opium and, as there has been a continued scarcity of Iranian raw opium, the price of smuggled opium in Hong Kong has risen to a figure which approximates to the selling price of Government opium. Further evidence of this state of affairs is to be found in the list of seizures for the year. Only 10,107 taels of raw opium were seized as compared with 27,084 taels in 1938, 23,149 taels in 1937, 68,373 taels in 1936 and 46,333 taels in 1935.
17. The opium account for the year shows a profit of $300,709.44.
18. Chinese Raw Opium. Of the 10,107 taels of raw opium seized during the year 7,380 taels were Chinese raw opium as compared with 25,075 taels in 1938. The most important seizure was made in May, when 2,650 taels were found beneath the coal in the bunkers of the S.S. Tak Sang in Hong Kong Harbour. There is no reason to believe that this opium had formed part of a larger consignment the bulk of which had already been disposed of outside the Colony but that the amount discovered was intended for sale in Hong Kong. A fireman was arrested who pleaded guilty to a charge of possession and received a sentence of 12 months' imprisonment. The only other major seizure was of 1,500 taels aboard the S.S. Wing Wo.
19. Persian Raw Opium. There were 38 seizures of Persian raw opium totalling 2,727 taels as opposed to 72 seizures and 2,009 taels in 1938. Three of the seizures were of amounts over 500 taels but, except for the fact that in each case the indications were that the opium was intended for local consumption, there are no features of special interest to record.
20. Prepared Opium. Seizures of prepared opium were also slightly smaller than last year, the total being 10,230 as against 12,758 taels. More than half this amount was prepared opium of the well known Red Lion brand, the origin of which is uncertain. The biggest seizure was of 2,840 taels found in a dump on the hillside at Pokfulam and the next biggest was of 1,902 taels which were ingeniously concealed in a special cement lined compartment inset in a sleeping platform on the premises of the Wing Fong Bricquet Co. at Tsun Wan.
21. Opium Divans. 1,095 divans were raided in 1939, 440 in Hong Kong and 655 in Kowloon. As has been stated before in these reports, the great difficulty in dealing with divans is that they are always under the management of hired "keepers" who are fully prepared to accept responsibility and, if necessary, to go to prison, secure in the knowledge that they will be compensated when they are released. Divans which have been raided and closed down reopen at the same address under a different keeper in an incredibly short space of time. To meet this a policy of intensive raiding by districts was adopted during the year. Certain districts were subjected to continuous pressure for a period of months during which period every known divan was raided again and again until at last the address was abandoned for purposes of divan keeping. It is not claimed that this policy offers a solution of the divan problem, but it has undoubtedly been effective in breaking up some well established haunts and in causing the divan owners considerable trouble and expense. An interesting sidelight on the illicit opium situation is provided by the fact that in the latter part of the year it was not uncommon to find Government opium or an admixture of Government opium in the seizures made in divans.
VI. HEROIN.
22. It is satisfactory to be able to record a steady improvement in the heroin situation in the Colony throughout the year. The intensive campaign against smugglers, pill factories and divans which was begun during the latter half of 1938, has been continued without remission and with good measure of success.
To some extent this success has been due to adventitious factors, namely a general shortage