CO882-(4-5) — Page 348

PUBLIC RECORD OFFICE

Reference :-

BEC.O. 882

5 PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO

6849.

(No. 99.)

SIR,

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No. 12.

The EARL OF DERBY to St G. F. BOWEN.

[Answered by No. 13.]

Downing Street, May 2, 1884.

I HAVE the honour to acknowledge the receipt of your Despatch of the 22nd of March, forwarding a statement of the receipts and expenditure on account of the opium revenue for the year ending 29th February last.

·

2. It is satisfactory to note that the total receipts have not fallen far short of the original estimates, made in Mr. Marsh's Despatch of the 6th of March 1883, but I observe that there was a very considerable falling off in the receipts of the last six months, as compared not only with the abnormally large receipts of the first three months, but even as compared with the receipts of the second three months, whereas Mr. Marsh in his Despatch of 11th September last, said "an estimate of the revenue "for the next six months may, in my opinion, be safely based on that yielded during "the last three months."

3. I presume that the unsettled state of affairs in China can hardly have had any considerable effect on the amount of the opium revenue, which is only derived from opium boiled in Hong Kong for local use and for export to California and Australia; and I shall be glad to learn whether you are satisfied that this falling off is not due to illicit boiling or any other fraud upon the Government, or whether it is due to a diminution in the export of prepared opium, and whether you anticipate a recovery in the receipts during the current year, as compared with the second half of the past year.

14786.

No. 13.

I have, &c.

DERBY.

SIR G. F. BOWEN to the EARL OF DERBY. (Received August 29, 1884.)

[Answered by No. 14.]

Government House, Hong Kong, July 19, 1884.

(No. 264.) MY LORD,

In my Despatch of the 6th instant,§ I stated that I was preparing and would shortly forward a reply to your Lordship's Despatch of the 2nd May ultimo,|| respecting the opium revenue of Hong Kong.

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2. I have thought it desirable to collect and to cause to be printed, and I have now the honour to transmit herewith, very full information on this important and delicate question, in the shape of a " Memorandum § by the Hon. James Russell, Treasurer, (now Mr. Justice Russell), on the subject of the Excise revenue raised in Hong Kong on the preparation of opium, with appendix, subsequent papers, and a Report by the Acting Colonial Secretary, (the Hon. F. Stewart), and the Treasurer, (the "Hon. A. Lister)." I wish the present Despatch and its enclosures to be regarded as a continuation of my previous Despatches on this subject with their enclosures. When read together, these papers will be found to contain full materials for forming a judgment on the opium question so far as it affects the Colony of Hong Kong. transmit them for the information of the Secretary of State, and of the Colonial Department; and also in the event (always possible) of inquiries and remarks being again made in the Imperial Parliament by those members who have given attention to this subject.

3. Mr. Justice Russell, while he filled the offices of Colonial Treasurer and Registrar General, thoroughly mastered the opium question in all its bearings; and I am confident that your Lordship will appreciate as highly as I do the valuable assistance in connexion with it which he has rendered, and which he continues to render to the local Government. His able memorandum of March 14, 1883, and his subsequent official letters, deserve attentive perusal; as does also the full and concise report of July 11, 1884, prepared at my request, conjointly by the Acting Colonial Secretary

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• No. 11.

† No. 1.

‡ No. 9.

No. 12.

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(Mr. Stewart), and the Treasurer (Mr. Lister), and which brings down to the present date the history of the opium revenue.

4. After careful examination by myself and the Executive Council, we concur generally with the opinions and views expressed in the accompanying papers, and we recommend them to your Lordship's favourable consideration.

5. It will be seen that the questions raised in your Lordship's Despatch of the 2nd May ultimo," have been dealt with in the joint report of Messrs. Stewart and Lister. It will be perceived that the large falling off in the opium revenue during the last six months of the year ending March 1884, was due to causes partly general, and partly arising from the special conditions of this branch of trade in Hong Kong. It became known here that on the 1st July 1883, the import tax on the prepared opium at San Francisco would be almost doubled in amount. This knowledge naturally stimulated the importers during the period immediately preceding that date. The equivalent of a year's supply was shipped off from Hong Kong, Macao, and Penang in three months, and, as a natural consequence there was a very large falling off in the succeeding half-year. In addition to this fact, it will be remembered that the strongly restrictive policy of the Government of the United States, and of the Governments of the Australian Colonies with regard to Chinese Immigration, has had the effect of dininishing the number of Chinese residents, and consequently the demand for opium

in those countries.

6. It is, moreover, to this diminution in the number of Chinese emigrants that the present crisis in the opium question at Hong Kong, is, in an indirect manner, more particularly due. It will be gathered from the enclosed reports that on three several occasions there have been secessions to the neighbouring Portuguese Colony of Macao by important Hong Kong firms of opium merchants, but that these firms have always hitherto been obliged to return to this Colony, owing principally to the want of banking and shipping facilities at Macao. With regard to the latter point, it should be borne in mind that, of late years, by far the most lucrative part of the business done by the large ocean steamers between this port on the one hand, and, on the other hand, San Francisco and Australia, has been the conveyance of Chinese emigrants. But the policy of the Imperial Government with a view to the suppression of the notorious coolie traffic of some years back, forbids the granting of enigration licenses to ships carrying Chinese passengers which call at Macao. Indeed any Chinese emigrant ship calling at Macao after leaving Hong Kong, would have entailed on the owners or agents, a prosecution for perjury in addition to other penalties; for a declaration on oath is required by the emigration laws in force before a license to carry Chinese passengers can be obtained in this Colony. The Macao boilers were thus driven to extreme and expensive shifts to get their opium properly shipped without passing it through Hong Kong, and paying duty upon it. They are now, however, in a great measure relieved from this difficulty. Chinese emigration to Australia having practically ceased for the present, the steamers on the Australian line, including the steamers of the eminent American house of Russell and Co., are now able to go round by Macao, and opium for Australia can be conveniently shipped at that port. The above considerations, coupled with the low rate at which the Macao opium farm is at present leased by the Portuguese Government account for the fact that the opium boilers who left for Macao when the Hong Kong Government took the opium farm into its own hands last year, have not on this, as on previous occasions, been soon compelled to return to this Colony. It is to this fact more especially, coupled with the diminution of late of the shipment of opium to the United States of America, that we must attribute the great falling off in the opium revenue during the last six months of the year ending March 1884.

7. At the commencement of the current year, a new policy was adopted by my Government with the advice of the Executive Council, with the view of preventing so serious a loss of revenue. Licenses were refused to the two large firms (i.e., the Yan

Wo, and Teap-Shing), which had also establishments in Macao and Penang, because they refused to boil all their opium in this Colony, the object of this measure being to encourage the small native firms of boilers, and to prevent the above-named firms from obtaining at a nominal cost, the great advantage of figuring in foreign markets as mercantile houses of Hong Kong.

8. However, the immediate result of this policy was, as will be seen by a reference to the figures at page 47 of the enclosed papers, to reduce the opium revenue almost to the amount derived from the boiling for local consumption. And, although many of those best qualified to judge seemed to be of opinion that in the long run these

• No. 12.

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