663
PUBLIC RECORD OFFICE
Reference :-
WHC.O.882/11
PUBLIC RECORD OFFICE, LONDON
| ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO
174
are accepted; and, if litigation were at any time to ensue, this Government could take action in the local Courts and could recover by execution on property within its jurisdiction.
4. The scheme which you urge should be adopted has been put forward for two
reasons:-
(a) because of the suspicion said to attach to M. A. Nemazi, the largest of
the local dealers; and
(b) because it is hoped that the employment of the firms recommended will
result in lower prices by getting behind the Singapore ring.
5. The expectation that the employment of Messrs. Bellairs, Atkinson and Co., and of Hadji Ali Akbar will result in lower prices is not shared by my Government. If there be a ring in Singapore, my Government does not see that there is any advan- tage in breaking away from it and falling into the hands of another ring consisting of Messrs. Bellairs, Atkinson and Co., alias Messrs. M. P. Nicolaidi and Co., and/or Ziegler and Co., and/or Hadji Ali Akbar. The first-named firm is admitted to have no financial resources; the terms asked by Ziegler and Co., are preposterous; and the commission of 24 per cent. on cost price requested by Hadji Ali Akbar gives no A combination of Messrs. Bellairs, security that the cost price will be reasonable.
Atkinson and Co., and Hadji Ali Akbar affords to this Government, it would seem, no better security as regards price. Indeed we have already been informed by one of the local dealers that an English firm, presumably Messrs. Bellairs, Atkinson and Co., is negotiating with his Bushire representatives for the supply of Persian opium to this Government. It is unlikely that any price quoted to Messrs. Bellairs, Atkinson and Co., would be as favourable as that quoted to this local dealer.
6. More important still is the question of the enormous delay and expense of litigation (if litigation with these firms ensued, a contingency which cannot be dis- regarded) and the possibility of recovering by execution the claim which may be made against them.
7. After mature consideration this Government has formed the definite opinion that the most satisfactory method for dealing with Persian opium supplies is that sealed tenders should be called for locally, and that the successful tenderer should always have ample resources in the Colony on which execution can be levied in the event of a claim being made against him. It is also the strong and unanimous opinion of my advisers and myself that any firm should be allowed to tender, as long as it is in a position to furnish sufficient security.
8. My Government also considers that the profits of this trade, which are paid for out of the revenues of the Colony, should remain invested in the Colony, and should thus be enabled to contribute directly or indirectly to taxation and to the advancement of the Colony's trade.
9. Since the foregoing was written, I have received your telegrams of 10th November* and 30th November,† which I here quote in extenso for ease of reference :---
Dated 10th November, 1927.
The Consul-General, Bushire, is of opinion that competition among the Persian merchants is sufficiently keen to prevent Nemazi rigging the market in opium. It is anticipated that the agenta recommended in my telegram of the 2nd September will eventually obtain supplies from the same sources but not from the agents of the Singapore ring.
H. A. Akbar were mentioned merely as possible suppliers who are prepared to wait for payment until after delivery of the opium. It is not proposed, however, that the agents should be tied down to them.
1 suggest that the point raised in paragraph 3 of your Confidential despatch of the 1st October would be met by:-
(1) Obtaining information as to current market prices from the Consul-General.
Bushire, either monthly or fortnightly.
(2) Putting a clause in the agreement giving Government the right to terminate the agreement at a month'i notice should the prices charged be in excess of those certified sa fair by the Consul-General.
Tolegraph whether you agree.
Draft beads of agreement inclusive of the above-mentioned clause have been prepared by the Crown Agents and Wilson, and if you reply in the affirmative these draft heade will be discussed with Bellairs Atkinson and a summary of the proposed agreement will be telegraphed for your consideration.
The employment of Nemazi or local associates must be regarded as out of the question. I have pointed out in previous correspondence objections against employing him but in addition you are aware that as long ago sa last May three foreign Governments were advised against purchasing from him by His Majesty's Government.
This Confidential despatch refers to your Confidential despatch of the 1st October.
* No. 131.
+ C. 30801/B/27 [No. 27]: not printed.
↑ No. 130.
Dated 30th November, 1927.
175
I am not suggesting urgent action but you should know of information which has reached me regarding the cost at a near date of opium from Persia.
I have been told that judging by the trend of events a large and prolonged incrense may be expected.
This is put at half as much again or even double.
Expenses may therefore be largely enhanced if stocks are not ordered soon and the advice given to me proves correct.
Also remember that the details of purchasing and tests cannot be put through in a short time by agents when and if the latter come into being.
Also a rumour that Holland is taking steps to see if the whole or part of her needs can be met by the Turkish.
The amount which can be smoked to be obtained from this source is not unlimited I have been told.
(This refers to your telegram dated the 22nd November.)*
10. I greatly regret the delay which has occurred in dealing with this matter, but during the past month I have been more than ordinarily busy, first in connexion with the session of the Federal Council at which the Budget for 1928 came up for consideration, and afterwards owing to a visit to Kedah, which it was not possible at the last moment to postpone, but during which I was so fully occupied by public engagements that I was only able to deal with urgent current work, and had neither the uninterrupted leisure nor the necesary documents at my disposal to enable me to continue this despatch.
A
11. I and my advisers are not very apprehensive concerning the possible rise of price foreshadowed in the second of the above quoted telegrams. In the ordinary course, we shall not be in the market for the purchase of opium until May next. rise in the present price amounting to even 100 per cent., it is calculated, would not cost us more, at present retail prices and at the present rate of consumption, than about 1 million Straits dollars. On the other hand, a bad bargain, hastily concluded, might quite easily cost us a much larger sum, to say nothing of the extreme embarrass- ment and difficulty which my Government would experience in attempting to justify and vindicate its action when, as would inevitably be the case, it was in due course challenged by Unotheial Members in the Legislative Council.
12. Referring next to the earlier of your two telegrams, the position of my Government is :-
(a) that it is very reluctant to depart from the ordinary practice of obtaining any commodity of which it stands in need by calling for tenders in the open market;
(b) that departure from this, the usual eminently businesslike and demonstrably straightforward practice, calls for justification of a kind calculated to carry conviction to any impartial critic;
(c) that the information at present in our possession is not of a kind that will enable us publicly to justify the suggested departure from the ordinary practice;
(d) that, on the contrary, we have no special knowledge of the firm of Messrs. Bellairs, Atkinson and Co., (formerly Messrs. M. P. Nicolaidi and Co.,) which is calculated to inspire particular confidence in them, or that is of a kind to enable us to persuade Unofficial Members that they are, in fact, deserving of such special confidence ;
(e) that, in these circumstances, unless and until you are able to place me and my Government in possession of the material from which to fashion ade- quate and convincing replies to the very searching questions which adoption of the course you advocate will inevitably cause Unofficial Members, as the guardians of Colonial and public local interests, to put to us concerning the transaction, we view the action proposed to us with the utmost apprehension and misgiving.
13. In this connexion, I note that you say that the employment of Nemazi or any of his local associates is "out of the question," and you add that "as long ago as last May, three foreign Governments were advised against purchasing from him by His Majesty's Government.” It would, therefore, appear to be the fear lest Nemazi, or some persons associated with him, might prove to be the successful tenderers for the supply of opium to this Government, that constitutes the principal objection to
C. 30801/B/27 [No. 21]: not printed.