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· PUBLIC RECORD OFFICE
Reference :-
THERE C.O.882/11
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PUBLIC RECORD OFFICE, LONDON
| ALLY WITHOUT PERMISSION OF THE
BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO
C. 30236/27 [No. 7].
*
No. 90.
HONG KONG.
THE SECRETARY OF STATE to THE OFFICER ADMINISTERING
(Paraphrase.)
THE GOVERNMENT.
(Sent 3.25 p.m., 15th October, 1927.)
TELEGRAM.
[Answered by No. 91.]
YOUR telegram 7th October.* Opium. It would have been well that I should have been consulted before you authorized such a radical change from existing practice. It is of the greatest importance that you should realize that the opium problem cannot be treated as a domestic concern of the Hong Kong Government only but that it has much wider repercussions. From documents recently supplied to you you will have learnt that increased sales in Malaya have caused much concern to His Majesty's
** natural causes
was the reason for these increases. Government even though Opportunity should accordingly have been given to His Majesty's Government of con- sidering whether they would be prepared to undertake defence of governmental action in Hong Kong necessarily leading to increase in sales.
"
As result of discussion with Foreign Office and British Representative League of Nations Opium Advisory Committee, it is felt that it will be possible to defend largely increased sales of Government opium only if it can be shown that the experiment has reasonable prospect of achieving some useful purpose. Your object presumably is to capture the market at present supplied by smugglers. On what grounds do you antici- pate lasting success? Smugglers can and presumably will undersell Government and re-establish their position even though reduced prices prevail.
Even if bulk of "illicit "market were captured what advantage would be gained? Chandu could presumably still be bought without restriction as to quantity, and if with a view to discouraging consumption prices are ultimately again raised effect would simply be to re-establish smuggling trade. Case would be on different footing if this experiment were first step in the direction of establishing real control of consumption (such as by registration and rationing) of which there seems no prospect in Hong Kong. Seeing that measure involves large additional supply of opium by a British Govern- ment His Majesty's Government will find some difficulty in defending proposal at Geneva and in Parliament unless you can make out strong case in favour of experiment. You will therefore understand that it is essential that I should be furnished with a full statement of your objects, which I have no doubt are excellent, and your prospects of success as to which I am more doubtful. If you desire I will wait for your report by mail.
His Majesty's Government adhere to permission to supplement restricted Indian supplies by purchasing from Persia to meet normal demands but having regard to efforts of League of Nations to induce Persia to decrease its opium production question of authorizing large purchases from Persia to meet inflated demands created by Hong Kong experiment would add to difficulty of defending experiment. At recent Assembly of the League the point was made that Persian production has been stimulated by purchases by Government monopolies in Far East consequent on restriction of Indian exports.
Following is for your information in the event of purchases from Persia being authorized for purpose of meeting increased demand :—
The procedure for obtaining further supplies for Straits Settlements is now under consideration and it is important that same procedure should be adopted by Hong Kong when settled in order to a void competition. I doubt whether it will be possible to authorize interim supplies from Singapore in view of Article 6 Geneva Agreement (vide recent correspondence as to Macao). Touch is being kept here with firms who could arrange supplies from Persia at short notice on favourable terms and if necessary (and if you agree) Crown Agents could be instructed to place orders in consultation with Lloyd for interim supplies.—AMERY,
C. 30236/27 [No. 15].
No. 91.
HONG KONG.
THE OFFICER ADMINISTERING THE GOVERNMENT to THE SECRETARY
(Paraphrase.)
23RD OCTOBER.
OF STATE.
(Received 4.10 p.m., 23rd October, 1927.)
TELEGRAM.
Confidential. Your telegram of 15th October,* Opium. Please refer to your Confidential memorandum of 17th March, 1927,† especially paru- graphs 16 and 36 and Colonial Office Confidential memorandum of 19th November, 1926, in particular paragraph 38, also to the survey§ by Mr. Herbert May of opium smoking conditions in the Far East. Following figures are in point. 448 persons were deported during the first 8 months of this year for trafficking in and possession of illicit opium. At least twice as many were considered for deportation and released in view of countervailing merits. Daily average of opium offenders in gaol was 540 and 200 convictions a month were being received and the Government has had seriously to consider remitting opium sentences wholesale in order to relieve pressure on gaol accommodation and public funds. Plain fact is that position has got entirely out of hand and the Government's control of opium in Hong Kong has steadily declined as opium production has increased and settled Government decreased in China. The amount of opium smoked has not in the least decreased and it will not while acts hoth of commission and omission by Chinese authorities place unlimited supplies of Use of term inflated demand in connexion with this opium within the reach of all. Government's recent action is quite incorrect. There is no reason to suppose that lower price will inflate either the demand or the supply. I assume that IIis Majesty's Government and the League of Nations are anxious to deal with the facts of the situation and are concerned rather to see a lower total consumption of opium in Hong Kong than a reduction in Government's sales accompanied by an ever increasing supply of smuggled opium.
Before change in price this Government was providing high grade article for the rich man while the smuggler has supplied the poor. Inflation, if there has been any, has been due to action of China, and Hong Kong cannot control it. Only this week I have received reliable information of the establishment of a dump of no less than 10 tons of Yunan opium in Chinese territory a few hours' steam from British waters.
It appeared to this Government that there was only one practicable method of dealing with the situation which had become intolerable, i.e., to compete with the smugglers by making legal opium available at a price more or less equivalent to theirs after making due allowance for the absence of risk to pocket and liberty. While prices adopted must not be considered as final the smugglers already appear to have suffered a set back and with further price-adjustment if necessary I have every reason to expect that Government will emerge masters of the field and in possession of actual facts regarding opium traffic in and through the Colony. If world wide suppression of opium smoking is ever to be realized such knowledge is an indispensable preliminary see concluding paragraph on page 20 of Mr. May's above-mentioned report.
In conclusion I would refer you to pages 38 and 39 of the minutes of the 8th Session of the Advisory Committee which deal with position in the Netherlands East Indies. This Government being unable (? to institute) licensing or rationing and not possessing unlimited funds for preventive work and being very much nearer source of supply has adopted the third course proposed by Dutch authorities.
I therefore urge. most strongly that this experiment be allowed reasonable. chance of success and shall be glad if you will arrange as suggested in the last para- graph of your telegram for the supply of 40 chests of Persian.opium a month for 12 months, first consignment to reach here by 1st December.
As there is possibility of delay in arranging direct supply I have ascertained from the Governor of Straits Settlements that that Government would be prepared to lend 80 chests to this Government provided it is replaced within 4 months and subject to your authorization.
* No. 88.
* No. 90.
↑ No. 83.
Enclosure in No. 79.
§ C. 30819/27 [No. 11]: not printed. Not printed here.