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To Hong Kong: 9. 1 turn now to a brief review of the suggestions which form part of the Advisory Committee's second resolution.

(1) Requires no comment.

*

(II) In your despatch No. 178 of the 16th of May, the receipt of which I take this opportunity to acknowledge you have agreed to adopt this suggestion. It would, I think, be well to proceed at once with the gradual 'supercession of the existing system by a system of direct Government retail sales; as, apart from the consideration men- tioned in the Advisory Committee's resolution, the complete elimination of the private trader will, in my opinion, greatly reduce the difficulties to be faced when further I may progressive measures for the control of the use of opium are undertaken. observe parenthetically that this policy was adopted in the Federated Malay States some time ago.

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(III) Is attractive, if for no other reason than that its general adoption under the aegis of the League of Nations would at once remove one of the grounds on which attacks on the Far Eastern Colonies have from time to time heen made by ill-informed persons or Societies, particularly if (as I can well believe would be the case) the Colony's legitimate requirements could be met by a considerably smaller ration than that allowed under such a scheme. I recognize, however, that there are con- siderable, though not I think insuperable, difficulties in the way of the adoption of a policy possibly involving an arbitrary restriction of the amount of opium legitimately placed on sale in the Colony. As you are no doubt aware, at the beginning of 1920 an attempt was made by the Government of the Straits Settlements to reduce the con- sumption of chandu by introducing a system of rationing whereby retailers were sup- plied with only 90 per cent. of their former average purchases, but the attempt had to be abandoned after a few months' trial owing to the great dissatisfaction produced by the hoarding and profiteering which occurred. Given, however, a system of com- plete Government control over retail sales and possibly some form of registration of consumers, these difficulties would no doubt be considerably lessened, at any rate the suggestion is well worth sympathetic consideration.

(IV) The British Representative had hoped to be able to propose definitely at the meeting of the Advisory Committee, that the interested Powers should be recom- mended to adopt a system of registration and licensing of opium smokers. Even before the despatch of my telegram of the 5th of Mayt (which was sent at Sir Malcolm Delevingne's request) my officers had informed him that I did not feel able to consent policy in to His Majesty's Government committing itself to the adoption of such a Hong Kong; and as a result of your telegram of the 11th of May,‡ the proposal in its original form was abandoned.

I consented, however, to Sir Malcolm Delevingne raising the question of the registration of smokers in the form in which it appears in the Committee's resolution, because I am convinced that if some such system could be devised which could be effectively administered at a reasonable cost and without unduly antagonising the Chinese population, a great step would have been taken towards the really effective control of the use of the drug.

In your despatch No. 179 of the 16th of May, you have dealt at length with the difficulties in the way of adopting such a system in Hong Kong, but I trust nevertheless that the local Committee, the appointment of which I have suggested, will examine the suggestion with care, in all its bearings.

[

As you are no doubt aware, opium smokers are already registered and licensed in various territories in the Far East, notably in the Netherlands East Indies. recognize, however, that the unique geographical position of Hong Kong invests the problem with peculiar difficulties, and it may perhaps be necessary for the Colony to be accorded special treatment. The accompanying copy of a despatch from His Majesty's Consul at Tengyueh, regarding the position in the Shan States, where a system of registration has recently been introduced, and where also it would appear, the problem of Chinese en passage has had to be considered, may be of interest to you.

(V) Will, no doubt be duly considered by your Government.

(VI) and (VII) Require no comment.]

[To Straits Settlements: 9. I turn now to a brief review of the suggestions which form part of the Advisory Committee's second resolution.

(I) Requires no comment.

(II) This policy was adopted in the Federated Malay States some time ago; the Governor of Hong Kong has also recently agreed to do so; and inasmuch as it would not materially change the present policy of your Government I have no doubt that

‡ No. 4.

* No. 6.

↑ No. 3.

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you will see no objection to its adoption in the Straits Settlements. The change will necessarily take a little time; but it would, I think, be well to proceed with it at once, as, apart from the consideration mentioned in the Advisory Committee's resolution, the complete elimination of the private trader will, in my opinion, greatly reduce the difficulties to be faced when further progressive measures for the control of the use of opium are undertaken.

(III) Is attractive, if for no other reason than that its general adoption under the ægis of the League of Nations would at once remove one of the grounds on which attacks on the Far Eastern Colonies have from time to time been made by ill-informed persons or Societies. The result of the attempt which was made by your Government at the beginning of 1920 was a sufficient indication of the difficulties in the way of the adoption of a policy involving an arbitrary restriction of the amount of Government opium placed on sale, where hoarding and profiteering are possible. Given, however, a system of complete Government control over retail sales and possibly some form of registration of consumers, these difficulties would no doubt be considerably lessened. At any rate the Advisory Committee's suggestion is well worth sympathetic consideration.

(IV) The British Representative had hoped to be able to propose definitely at the meeting of the Advisory Committee that the interested Powers should be recommended to adopt a system of registration and licensing of opium smokers, but as a result of representations which were made by the Government of Hong Kong, this proposal was abandoned.

I consented, however, to Sir Malcolm Delevingne raising the question of registra- tion of smokers, in the form in which it appears in the Committee's resolution, because I am convinced that if some such system could be devised which could be effectively administered at a reasonable cost and without unduly antagonising the Chinese popula- tion, a great step would have been taken towards the really effective control of the use of the drug.

I am of course aware that the Committee which was appointed in the Straits Settlements in 1919 (vide paragraph 33 of the enclosure to Mr. (now Sir) F. S. James's Straits Settlements Confidential despatch of the 27th of October, 1919*) considered that the registration of opium smokers in the Colony was impracticable; and that the Federated Malay States Committee (vide enclosure to Mr. (now Sir) F. S. James's Malay States Confidential despatch of the 25th of November, 19191) expressed the views that a system of registration and rationing of consumers could not be made effective without costly machinery, and that its introduction might have disastrous effects by discouraging the immigration of Chinese labour.

Nevertheless the fact remains that, as stated in paragraph 4 of this despatch, the existing position cannot be regarded as satisfactory, and it would appear that the time has now come when it is imperative to devise further measures for the more effective application of Part II of the Convention. I trust therefore that the local Committee, the appointment of which I have suggested, will examine the question with care and without prejudice.

As you are no doubt aware opium smokers are already registered and licensed in various territories in the Far East, notably in the Netherlands East Indies and I would suggest that the system in operation there should be carefully studied. I realize that the conditions in the Netherlands East Indies are not altogether comparable to those in Malaya, but they are probably not so dissimilar that the experience of the Netherlands East Indies Government will not be of considerable value to your Government.

(V) Will, no doubt, be duly considered by your Government.

(VI) and (VII) Require no comment.]

10. In order to be able to take an effective part at such a Conference as that proposed by the Advisory Committee, it is essential that the British Delegation should be fully acquainted with the local conditions of the Far Eastern Colonies, so far as they affect the due observance of the Convention, and with the views of the Govern ments concerned as to what measures for the more effective observance of Part II of the Convention, are practicable in their respective territories.

11. I request therefore that unless you see any objection you will proceed without delay, as suggested in paragraph 7 of this despatch, to appoint a local Committee u. investigate the recommendations of the Advisory Committee, and that you will forward, in sufficient time to reach me by end of May at latest, for the information of the British Delegation to the proposed International Conference, the Report of the Com-

*70831/19: not printed.

+ 73564/19: not printed.

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