CO882-10 — Page 504

To summarise, the conclusions of the Court of Directors on the first five sug- gestions of the Advisory Committee are as follows:-

(I) No action necessary. The Farm System has been abolished and the opium

business is already a Government monopoly.

(II) Owing to scattered nature of the population and the comparatively large number of distributing depots that are necessary, it is unlikely that Government will agree to restrict opium sales exclusively to Govern- ment shops or to abolish all private shops. Government will how- ever consider favourably the practicability of the discontinuance of commissions on sales, and the substitution of fixed remuneration to retailers.

(III) The present practice in North Borneo is based on the principle of ration- ing. Government are willing to consider a stricter application of the principle, and would agree to the annual imports of raw opium being restricted on the basis of population, provided that a uniform ration is agreed to by the conference.

(IV) The conditions in North Borneo are not suitable for the introduction of any system of registration or licensing. A free inflow of Chinese labourers and settlers is vital to the progress and development of North Borneo, and Government would hesitate to introduce measures which, in the present state of Chinese feeling, must necessarily restrict immi- gration and have a disturbing effect on the resident Chinese popula-

tion.

(V) The Government would favourably consider conforming with any agree- ment which may be reached for uniform prices and uniform penalties for infraction of the opium laws.

A. C. PEARSON,

The British North Borneo Company,

37, Threadneedle Street, London, E.C.2.

($495) WL, 15586-1337 125 10/24 3.2.R. LM. Cp. 14.

Secretary. 29th May, 1924.