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future. In the absence of strong political reasons I think we shall have to let them buy if they still want to. If you think such purchases might be allowed, are there any special conditions or fixed limit in amount you would desire that we should impose. What we had in mind in suggesting a buying programme was that we should, after consulting with you and Mounsey, give them a general permission to purchase "X" chests in the next 12 months (say) and then wash our hands of it, leaving the details to them and the Crown Agents. (Of course, it would be understood they would only buy from reputable firms as agreed at our discussions in the spring.) Would you see any objection to that procedure which, I hope, might avoid the practically continuous correspondence between us on this subject which has been going on for so long?

I should be glad to have your views as early as possible

C_58017/A/28 [No. 40].

No. 158.

Yours, &c.,

G. GRINDLE.

SIR M. DELEVINGNE (Geneva) to SIR G. GRINDLE (COLONIAL OFFICE).

British Delegation, Hôtel Beau Rivage, Geneva,

MY DEAR GRINDLE,

25th September, 1928.

I HAVE been fully occupied during the last few days with the British proposal for a Commission of Inquiry in the Far East, or I would have answered your letter of the 14th* on the subject of opium purchases by the Straits Settlements Govern- ment sooner.

I have had a talk with Hussein Khan, who is the Persian Minister at Paris and one of their delegates here, with a view to ascertaining how far the Persian Govern- ment intend to keep the control of export in their own hands, and what arrangements they would be prepared to make with the other Governments for the purchase of opium. He told me that several Governments have already approached the Persian Government with a view to making contracts for the purchase of opium, and the Persian Government are quite prepared to enter into such contracts, but not contracts for several years in advance as some Governments wished, in view of the fluctuations in output and price.

I told him about the yearly contracts which the Indian Government had been in the habit of making with other Governments for the supply of opium at a fixed price, and I gathered from him that they would be pleased to entertain a similar proposal. The matter is in the hands of the Minister of Finance at Teheran, and he suggested that the Government of the Straits Settlements or other Governments should negotiate directly with the Persian Government through the medium of our Minister at Teheran.

You will have seen the text of the Persian Opium Monopoly Law of the 17th July last, and you will have observed that the price at which the Persian Government will buy the opium from the cultivators is fixed at the average of the price for the three preceding years, plus 10 per cent. There are obvious advantages from the point of view of the British Government and the League, and I should imagine also from that of the Straits Settlements Government, in buying direct from the Persian Government and making regular contracts, and I suggest that the question of doing so should be taken up. Before, however, any definite step is taken in this direction, I should like to know what is the nature of the arrangements which the Dutch Government have been making in Persia. As I told you, I have been speaking to the Dutch representa- tive on the Opium Advisory Committee, M. van Wettum, on the subject in general terms, and he has promised to let me have, on his return to The Hague (he will reach there to-morrow) a copy, or a summary of the contents, of their contract. Also the official from the Dutch East Indies who recently visited Persia and inquired into the whole situation there and made the arrangements for the Dutch Government, is now at The Hague, and M. van Wettum is going to obtain further details from him. In view of the change which has been made in the Persian situation by the

passage of the Opium Monopoly Law and of the possibility of making direct contracts with the Persian Government, I think we ought now to consider again the question of common action on the part of the Governments interested, or at any rate the possi-

* No. 157.

193

bility of an understanding between them as to the lines on which they will act. It would be absurd for the interested Governments to be competing against one another, or to allow the Persian Government to play off one country against another.

I now come to the request of the Straits Settlements Government for the purchase of an additional 400 chests of opium. With yourself, I find it difficult to understand what is the object of the Governor in wanting to buy this additional supply, or what is the grave risk which he thinks he will be running if he does not buy now.

If the supplies he has already purchased are expected to last to the end of 1929, he has already in hand supplies sufficient to carry him for several months beyond the time of the 1929 harvest. Presumably the danger which he fears is the danger of a failure or partial failure of the Persian crop next year, resulting in shortage of supplies, the marketing of adulterated opium and a rise in price. If, however, he intends always to have supplies in hand sufficient to guard himself against such a danger, he will have to buy in the bad years as well as in the good, or resort to another market. If, however, he can resort to another market, e.g., to the Turkish market, at will, then there is no apparent need for keeping large stocks always in hand.

I don't understand exactly what the Governor means by the sentence in his telegram of the 12th September,* that nine months' supply of opium is not considered by Wilson to be sufficient, unless he means nine months from March, 1929, and if that is the meaning it is not clear why Wilson regards it as insufficient.

On the question which you put to me as to whether these further purchases are likely to embarrass me at Geneva, I don't think I can add very much to what I said in my previous letter to you, in which I went over the whole situation. I have no doubt that the accumulation of large stocks will attract attention in the Opium Advisory Committee, and that I shall be asked about it. I do not know whether the Commission which is going to the Far East to inquire into the general situation is likely to go into the question of opium purchase; I imagine that some of the Governments wish

may

to bring the question before them, and it may be worth considering whether, pending the inquiry, and also pending the consideration of the possibility of making direct contracts with the Persian Government, it is desirable to accumulate stocks far in excess of the needs of the present or immediate future.

ment or

"

I entirely agree with you as to the desirability of making some general arrange- buying programme so as to avoid a continuous correspondence on the subject. I hope it will be possible to have such a programme by direct negotiation with the Persian Government. It is difficult for me to make any suggestion as to what the amount to be provided for under the buying prograinn.. should be; that would depend on the rate of consumption, and on the amount to be obtained from the Indian Government; and the rate of consumption would depend on the policy which is being followed by the Straits Settlements Government with the approval of the Home Government.

In any event I hope purchases won't be made from Elias.

I hope to be back by the middle of October, and it might be as well to have a meeting of the Interdepartmental Committee to go over the whole question in the light of the new situation.

C. 53017/A/28 [No. 41].

No. 159.

Yours, &c.,

MALCOLM DELEVINGNE.

STRAITS SETTLEMENTS.

THE SECRETARY OF STATE to THE OFFICER ADMINISTERING THE GOVERNMENT.

(Paraphrase.)

(Sent 12.20

p.m., 29th September, 1928.)

TELEGRAM.

[Answered by No. 160.]

UNLESS there are local reasons for secrecy please reply in code, in which case

no reference to this telegram need be made.

My telegram of 12th of September. Please inform me what further supplies of opium you consider it essential to purchase this year and total quantity of Persian

* No. 155.

† No. 156.