PUBLIC RECORD OFFICE
Reference :-
C.O. 882
5 PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO
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To fully understand the present position, it is necessary to examine and review the history of the course of trade in opium during two periods, viz. :-
1st. Before June 1887.
2nd. Since that date to the present time.
All opium from India, or Peris, or Turkey, intended for China is brought to Hong Kong as raw opium. Up till June 1887 it was nearly all landed and stored here, and only transhipped to such places in China as wanted it, because the payment of duty and lekim was thus deferred until the commodity was wanted, as Hong Kong is a free port.
In consequence of frequent complaints against the Government for allowing smuggling from here, a commission was appointed in 1885 to inquire and repost. That commission ascertained that about 20,000 piculs of opium were annually left at Hong Kong and which could not be accounted for by the foreign Inspectorate of Customs at the treaty ports. It was known that a great deal of this was smuggled, but the amount was mere conjecture, because there were up till 1887 two ways by which opium could pay its duty on entering China, one through the native collectorate, the other through the foreign customs collectorate. The latter furnished statistics. The former did not.
Thus opium could be lawfully imported by junks to either treaty or non-treaty ports, but if in foreign vessels it could only be imported into China at treaty ports, and there- fore the foreign customs, which had nothing to do with junk collection, showed only the account of opium imported in foreign vessels.
It was known that large quantities of opiuin lert here for China in junks. Some went to Swatow and along the coasi, some to Formosa, some to Canton and to the intermediate non-treaty ports; and to encourage and induce the transmission by native craft, so that the native authorities might get hold of the duty instead of the foreign customs, large discounts were offered to shippers by junks. It was the efore natural that the foreign customs returns should show a large quantity of opium left at Hong Kong and un- accounted for, as the native customs authorities could not be made to account, or, if they did, they could account as they liked, for there was no check.
The commission ascertained that from year to year the lekim and other charges on opium were being increased, which, of course, tended to increase smuggling from Hong Kong.
The commission's report shows that bands of as many as 100 men armed with muskets, revolvers, and spears, escorted opium smuggling over the frontier, and as much as $12,000 worth of opium would be known to be smuggled by one party. Such occurrences were frequent up to June 1887.
es
The additional article to the Cheefoo Convention of 1876 was made in July 1885. In it Her Majesty's Government stated that "the clause in the Cheefoo Convention in reference to opium was not sufficiently explicit to serve as an efficient regulation for "the traffic in opium, and, recognising the desirability of placing restrictions on the
consumption of opium, have agreed to the present additional article."
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It was arranged that all opium duty and lekim entering China should be collected by the foreign customs, and that a uniform rate of 30 taels per picul duty and 80 taels lekim should be collected at the same time. It was also arranged that customs hulks would be provided at all the treaty ports into which opium would be placed in bond on its arrival, and that the combined tax should only be payable on removal.
This increased duty it was considered would lead to increased smuggling from the free port of Hong Kong unless some arrangements were made with the Colony for the control of opium, and Sir Robert Hart proposed customs hulks in our harbour and a Chinese bonded warehouse on shore, to which all opium should be taken and kept, and only released on paying duty to China.
In pursuance of the Cheefoo Convention and the additional article, a Commission was appointed in 1886 "to inquire into the question of the prevention of opium smuggling into China" and the result was that an arrangement was come to that Hong Kong would keep tally of all opium arriving here and establish an export and import office for regulating and controlling the movement of opium, a control which has been accomplished with very satisfactory results.
As the collection of all opium duty was for the first time entrusted to the foreign customs, and as a great deal of opium was shipped by junks from Hong Kong it was arranged that a station should be established in Chinese Kowloon for issuing duty certificates to junk-borne opium.
The Hong Kong Government, with the object of carrying out the views of Her Majesty's Government to co-operate with China in collecting her opium tax and to increase its own revenue, prohibited the free sale of opium within the Colony.
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This was a great innovation, as the sale of opium had been carried on freely by retail by more than 40 shops, which sold in any quantities, one ball, half a ball, or even one tael weight. But to properly control the movement it was found necessary to prohibit the possession of small quantities by all persons except the opium farmer, who required
for his trade.
These arrangements were given legal effect to by Ordinance No. 22 of 1887. Up till then no check was placed on the trade. Whether 10,000 chests or 5,000 were smuggled from Hong Kong was the merest conjecture.
Since the early days of the Colony the revenue has had a contribution from a tax upon opium. Since 1858 that tax has been raised by granting the sole privilege of preparing and selling prepared opium to one or more persons. That grant might be to a farmer or to licensees of Government. But opium in its raw state has not been interfered with until recently. It is only in its cooked state it is usable in the Colony. In its raw or unmanufactured state it is simply an article of general commerce, and, as it was no part of the duty of one State to look after the revenue of another, the Colony left China to attend to its own opium revenue until the Chinese Government established a number of stations round the island, and a cruiser service for overhauling the junks frequenting this port, [and] forced the Colony to take action.
Her Majesty's Government were satisfied that China had good ground of complaint against the smuggling from Hong Kong, and the Commission in 1883 recognised the danger to Chinese revenue from our proximity as a free port.
The Hong Kong Government agreed with Her Majesty's Government that every lawful aid should be given to China for the better collection of its opium revenue.
This Government also saw that the better control within the Colony would benefit its own revenue by suppressing illicit boiling.
Before the Ordinance No. 22 of 1897 was passed there was an enormous impetus given to the smuggling trade. At that time the prepared opium privileges were granted to a farmer for three years, ending in February 1889, at $15,200 a month. When the new Ordinance came into force the only person who could smuggle was the opium farmer, and certain guarantees were taken from him that he would not do so, but it was Boon found that he did. The policy, however, of concentrating the boiling and preparing and selling prepared opium in the hands of one man, instead of many, seemed to be the right one, if proper guarantees were obtained from the opium farmer or certain limits were placed on the quantity that he could draw for that purpose.
Hence the farm for 1889, 1890, and 1891 limited the drawing power of the farmer to 3,600 chests per annum at a rental of $39,800 a month.
That has been found too much for the legitimate requirements of the present farmer, and the limit proposed for the new farmer is 150 chests a month, unless by a special permit of the Governor.
All this limitation is made in the interests of China, and to carry out the views of Her Majesty's Government, as to aiding China in the matter of preventing opium smuggling, which from Hong Kong has now practically ceased.
During the year 1889 all the opium seized by the customs at Canton amounted to less than 4 piculs, at Kowloon to about 6 piculs, and this might have been opium brought up by sailors from India or Singapore or Penang or Macao.
With these details Lord Knutsford's question can be better dealt with, and also the question raised recently by Mr. Whitehead, a Member of Council, as to levying duty on raw opium by means of a bonded warehouse.
But
Lord Knutsford points out that this Government had tried the experiment.of granting licenses to a number of persons, and that it was not very successful. That is so. it was in this wise.
The Government in 1883 was driven to that course by a combination of the opium farmers. The revenue raised from the farm was $132,000 per annum up till 1878, when Sir John Pope Hennessy induced the Saigon farmers to come here, and they got the farm for three years at $205,000 per annum. But the old farmers established themselves at Macao, and as they had the command of the sale of opium in Australia and America, from which they derived large profits, they almost ruined the Saigon farmer. He had to contend against the Macao people sending in cheap prepared opium into Hong Kong. He had no proper excise staff, and had trusted to make his money out of the large sales in foreign markets.
The old farmers arranged with him to go, and obtained the farm for one year at $210,000 from Sir John Pope Hennessy.
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