676
PUBLIC RECORD OFFICE
Reference :-
། ། ། ། ། ................C.O.882/11?
PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-
COPYRIGHT PHOTOGRAPH-NOT TO
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Bellairs Atkinson could not obtain their supplies at prices they anticipated when tendering, they would have legitimate grievance against you.
I was about to send despatch suggesting reconsideration of suggestion in your telegram of 4th July to purchase further 2,000 chests. Objections which I see to that proposal apply equally to latest suggestion. Unless, therefore, there are special reasons for buying now, you should reconsider matter then after receipt of my despatch referred to.
In the meanwhile it might be well to ascertain direct the views of the Consul- General, Bushire, as to effect both in near future and later on Persian market of the establishment of a Government Monopoly. Your telegram of 17th August* refers.— AMERY.
!
C. 53017/A/28 [No. 24].
No. 151.
STRAITS SETTLEMENTS.
THE OFFICER ADMINISTERING THE GOVERNMENT to
(Paraphrase.)
THE SECRETARY OF STATE.
(Received 8.15 a.m., 27th August, 1928.)
TELEGRAM.
27TH AUGUST. Your telegram of 18th August. Supply of Opium. Purchase of further 1,000 chests to be obtained from Ali Akbar as suggested would have been in partial substitution for the purchase of 2,000 chests suggested in my telegram of 4th July. I should have preferred delivery after March, 1929, but it appeared from your telegram of 16th August§ that Ali Akbar would not have agreed to deferred delivery. Agree to defer further action as you suggest, and meanwhile have telegraphed Consul-General. Bushire. Bellairs Atkinson's contract I should be glad if payment may be made in sterling in London rather than in dollars in Singapore, as we at present lose on exchange. Suggest that Crown Agents endeavour to arrange with Bellairs Atkinson if contract already made. This also applies to Ali Akbar and their existing contract for five hundred chests. It seems improbable that objection would be raised by the firms.
C. 53017/A/28 [No. 22].
SIR.
No. 152,
STRAITS SETTLEMENTS.
THE SECRETARY OF STATE to THE OFFICER ADMINISTERING
(Confidential.)
THE GOVERNMENT.
[Answered by No. 160.]
Downing Street, 30th August, 1928
I HAVE the honour to refer to recent telegraphic correspondence ending with my telegram of the 16th of August, § regarding the issue of tenders for the supply of opium to the Straits Settlements Government. As explained in my telegram of 18th of August, I have not yet taken any steps to call for tenders for the additional 2,000 chests as suggested in your telegram of the 2nd of July, as this appears to me to be open to several objections.
2. In the first place it may be well to await the result of the present departure in buying opium from firms in this country before following that procedure with further purchases. Although it has been my wish that you should not purchase from any firms in the least suspected of complicity in the illicit traffic and although I would have preferred that the system of purchasing through an agency rather than by tender should be adopted, I have never desired that purchases should necessarily be restricted to firms in this country. It is possible, therefore, if the present method should prove not entirely satisfactory, that you may desire to purchase from firms in the Straits Settlements or in Persia, either as well as, or in substitution for, firms in
t.No. 150.
‡ No. 147.
§ No. 148.
* No. 149.
No. 146.
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this country, and I should have no objection to that being done provided, of course, the firms concerned were reputable.
3. Calling for tenders now for o opium to be delivered between July, 1929, and May, 1930, amounts to a gamble on the 1929 opium harvest, the prospects of which it is at present quite impossible to predict. It is probable that merchants would be compelled to quote high prices to cover themselves against a possible shortage if the harvest is a bad one, whereas by waiting, the Straits Settlements Government might gain the advantage of lower prices should the harvest be good.
4. I appreciate your desire to secure adequate and regular supplies of opium sufficient to last for some considerable period ahead, but it is possible that this object might be served equally well by regular purchases of small amounts, to be delivered at once, as by a large purchase at one time to be delivered in small quantities over a long period. It has been represented to me that it would be advantageous to you to invite tenders regularly, once a month say, for 100 chests each month (or whatever other quantity might be considered necessary). The Persian merchant would, of course, come to expect this regular invitation for tenders but this would probably facilitate their arrangements and so reduce prices while in any time of temporary scarcity the Government which would continue to hold large stocks as at present would be in a position to postpone its order for a month or two.
5. The present system of calling for large quantities at a time is very disturbing for the market. One thousand chests is an appreciable proportion of the Persian production of opium and when several persons are at the same time making inquiries for the supply of a quantity of this order, prices are inevitably inflated. With a com- modity of so restricted a supply, ordinary methods of tender may not be the most advantageous and it is possible that, if the suggestion of monthly tenders is not found acceptable, it might be well in future to call for tenders for a less amount than it is actually intended to buy, so as not to disturb the markets. The whole procedure of tendering should, I consider, be further considered before any more purchases are made and as supplies are now assured until the end of 1929, there appears time to do this.
6. There are other reasons why it is undesirable to disturb the market by large and irregular orders. Apart from the interests of the Straits Settlements Government it is generally desirable, from the point of view of controlling the production of opium, that the demand should be regular and reliable, otherwise over-production seems certain to ensue, and with over-production excess stocks are accumulated which tend to disorganize the market and are liable to find their way into the illicit traffic.
7. There is the further consideration that since you suggested calling for tenders for an additional 2,000 chests, the Persian Government has taken steps to institute a Government Monopoly. The exact manner in which the Monopoly is going to work is not yet known and it seems, therefore, desirable that no commitments for the future should be entered into until the position of the Persian opium trade which may be entirely revolutionized is clearer. It is conceivable that the Persian Govern- ment may eventually keep the export business in its own hands and in that case it would be necessary for you to deal direct with the Government. This would, of course, be a very different and much more satisfactory arrangement.
8. It has been suggested on several occasions recently that you should purchase opium from Turkey. In this connexion I enclose copies of letters from Bellairs. Atkinson and Company and J. W. Whittall and Company Limited. It appears that the price of Turkish opium is at present considerably less than that of Persian and although I understand that it is not generally used for smoking, it might be desirable to investigate its possibilities more fully.
9. I shall be glad, therefore, if you will reconsider your suggestion to make further large purchases of opium in the near future in the light of the objections advanced above.
10 I may add that the above considerations apply equally to the proposal in your telegram of 17th August† to purchase 1,000 chests immediately from Ali Akbar; and the proposal is also open to the special objection mentioned in my telegram of 18th August.‡
I have, &c..
L. S. AMERY.
* C. 53017/28 [No. 45], and enclosure in C. 53017/A/28 [No. 16]: not printed.
† No. 149.
‡ No. 150.
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