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If the attitude of Governments affected was not to be misunderstood and mis- interpreted, it seemed necessary, in view of the attitude still maintained by the Chinese Government and its representatives at Geneva, that the facts in regard to the produc- tion of opium in China and the illicit traffic in opium from China should be publicly stated. Unless the general public were informed as to the situation, they would fail to understand why the Conference was unable to accomplish more than it did. The declaration* which is annexed to this Report was accordingly drawn up and adopted by the Conference for this purpose. It embodies the facts which were laid before the Conference by the French representative and myself. After adoption, it was issued to the Press and immediately published in full in the Bangkok newspapers. It will be included in the Minutes of the Conference and submitted to the Council of the League.

The discussion on the illicit traffic also led to an understanding being reached for closer and more regular co-operation between the preventive services of the Powers affected. Exchange of information and views in regard to the traffic is already pro- vided for by Article VIII of the Geneva Agreement, and there has been some inter- change, with useful results, between the British Possessions, the Netherlands East Indies, and the Philippines. The League Commission recommended that this co- organize on a operation should be carried further, that the Governments should **

preventive common plan the existing national preventive services," and that the services should keep in constant touch " (Volume I, page 139). It was not clear what exactly was intended by the suggestion for a "common plan," and the explanations given by the Chairman of the Commission did not disclose that the Commission had in mind any definite line of action. It was pointed out that the circumstances, as well as the administrative arrangements, of the different Possessions differed widely. In the case of some, opium is smuggled over an extensivé land frontier, in the case of others it is brought in by sea from a distance. The measures taken necessarily A Committee, consisting of the representatives vary according to the circumstances.

of the local administrations present at the Conference, was appointed to consider what could be done to improve and extend the existing co-operation, and they prepared the lines of an arrangement* which was accepted by the Conference and which is annexed to this Report. I urged that periodical meetings of representatives of the local administrations should be held in order to ensure a closer contact and fuller exchange of views, at any rate between those territories in which the circumstances are similar, and an informal understanding that this should be done was come to as regards the As will be noticed later, British Possessions, the Netherlands East Indies, and Siam.

the Conference has proposed that the arrangement should be extended to cover other questions besides that of the illicit traffic.

"

An important proposal made by the League Commission for checking the illicit traffic, was that the prices of Government opium in the several territories should be (Volume I, reduced to a level sufficiently low to make smuggling unprofitable page 140). This would have involved a reversal of the long-established policy in the British Possessions of limiting consumption by raising the price of Government opium to the highest possible figure; and further, there did not seem sufficient grounds At a for believing that the proposal would, in the end, achieve the object in view. Conferencet which I had at Penang on my way to Bangkok with the Governor, Sir Cecil ('lementi, and officials of the Colony and Federated Malay States, the Governor expressed himself in favour of giving the proposal a trial, but the information avail- able both from Malaya and from Hong Kong as to the prices at which the smugglers are able to obtain illicit opium appeared to show that they would always be able to sell at prices considerably below any that the Governments could fix and would reply to any reduction of Government prices by a corresponding reduction of their own. "Even if the smugglers could, by the adoption of this policy, be driven out of the market they would return as soon as any attempt was made to restrict consumption. No fresh light was thrown on the question by the discussions in the Conference and, in accord- ance with my Instructions, therefore, and for the reasons above-mentioned, I stated that His Majesty's Government, while considering the question of prices as purely one of expediency, were not able to accept the proposal in present circumstances. France. the Netherlands, and Siam also stated that they were unable to accept it, though France and Siam had, in districts bordering on their northern frontiers across which opium is smuggled, fixed lower prices for Government opium than the normal prices for the rest of their territories. The proposal, therefore, dropped.

Not printed here.

† No. 29.

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After the discussion of the illicit traffic, the Conference proceeded to consider whether further measures could be taken with a view to the ultimate suppression of opium smoking, and discussed seriatim the recommendations which had been made by the League Commission. The measures discussed may be classified as (1) further measures of control and restriction, (2) counter-measures to eliminate as far as possible the causes which lead to addiction.

Restrictive Measures.

(1) Institution of Complete Government Monopoly.-Article I of the Geneva Agreement provides for the establishment of a Government Monopoly but allows certain exceptions in respect of the manufacture of prepared opium and its retail sale. So far as regards manufacture of prepared opium, the only case in which the manufacture is not at present being carried on by the Government is that of Kwong Chow Wan. Here the practice has been to allow opium to be prepared by licensed " boilers " on the ground that they can cater for differences of individual taste; an attempt to make consumers buy only Government opium from the Saigon Factory did not, it was said, meet with success. The boilers retail direct to the consumers The number of these boilers has now been reduced to three from a much larger number, and it is the inten tion of the French authorities to abolish the system altogether. They were not able. however, to accept immediately the principle of Government manufacture in respect of Kwong Chow Wan. As regards refail sale, the Conference agreed (subject to reser- vations by Siam* and, as regards the Chan States by India) on the abolition, as recom- mended by the League Commission (Volume 1, pages 1-10-1), of the exceptions in the Geneva Agreement, and a new Article was drawn up which is included in the Supple mentary Agreement concluded by the Conference

At the request of the French Delegate a proviso in general terms was added at the end of the new Article to allow the temporary continuance of retail sales by the Kwong Chow Wan boilers, but the statement made by the French Dolegate in full Conference, which will appear in the published Minutes, should leave no doubt as to the scope and meaning of the proviso.

..

The position at Macao also came under consideration. It appeared that the Macao Government, when replacing (in 1927) the old farming system by a Government Monopoly, had taken on as an expert" the manager of the old farm and that both the management of the Government Factory and the selection of the licensed retail vendors are left in his hands. Macao is the centre of a large illicit traffic in prepared opium, in particular the Red Lion brand which is found in most parts of the Far East, in the United States and elsewhere The authorities at Hong Kong suspect that some at any rate of this illicit opium is actually made in the factory itself. It was not possible to carry the matter very far in public discussion, but I have put a number of questions, suggested by the particulars and figures given in the League Commis- sion's Report, to Dr. Loho, one of the Portuguese Delegates and Superintendent of the Opium Monopoly at Macao, and he luas promised to send me a full reply, I muy add that Dr. Lobo is regarded by the Hong Kong authorities as not above suspicion himself.

It came out in the report of the League Commission (Volume II, page 348) that the retail sale of Government opium in the Colony of Hong Kong is not carried on in Government shops, that is, shops owned and run by the Government, but by persons licensed or appointed by the Government who are paid a fixed salary by the Govern- ment, but who provide their own premises and are not in the strict sense employees of the Government. While this system is in accordance with the letter of the Ĝeneva Agreement, it was, I believe, the intention of His Majesty's Government when deciding to make the retail sale a Government Monopoly, that the retail sale should be carried on in Government shops. This is what has been done in Malaya. I discussed the matter with the officials from Hong Kong who attended the Conference, and arranged with them that the whole position should he reconsidered. It will be seen that the new Article provides that the retail sale shall take place only from shops owned and managed by the Government except where local circumstances make the establishment of Government shops difficult.

(2) Registration, Licensing and Rationing of Opium Smokers.—The League Cóm- mission's recommendations on this point (Volume I. pages 141-2) were not accepted

The

* In Siam smoking is restricted in general to the public smoking establishments or divansm some of these are owned by the Government, but the large majority by licensed persons. Siamese Government say it would be very difficult to find the staff to convert the latter into Government shopa.

BIT

RECORD OFFICE

Reference'

AC.O.882/15

T T Į Į JĮ Į J T T Į Į Į I

PUBLIC RECORD OFFICE, LONDON)

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