CO885-11 — Page 604

€ 4

PUBLIC RECORD OFFICE

Reference :-

C.O.882/11

PUBLIC RECORD OFFICE, LONDON

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

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2. The Secretary of State indicated that the Governor would probably find it convenient to appoint a local Committee to assist him in examining the existing position and to explore the possibilities of further effective action, and added the suggestion that one or more prominent Chinese should be invited to serve on any committee which it might be decided to appoint.

• 3. After careful consideration of the conditions obtaining in North Borneo the Court reached the conclusion that the appointment of a local Committee was probably not the surest way of giving full effect to the intentions of the Advisory Committee, and they nominated Mr. F. W. Fraser, C.B.E.. Government Secretary, as their sole Com- missioner with instructions to associate with himself in his inquiries prominent members of the planting, industrial, and Chinese communities and to report to the Governor the information and suggestions thus collected.

4. After a careful study of Mr. Fraser's report the Court have reached the following conclusions as regards the application to North Borneo of the suggestions of the Advisory Committee :-

(1) That the farm system, where it is still in operation, should be abolished an:1 that the opium business should be made a Government monopoly and kept entirely in the hands of the Government.

The farm system has long since been abolished and the opium business is a Govern- ment monopoly and is kept entirely in the hands of the Government.

(II) As a corollary of paragraph (1), that the retail sale of prepared opium should be made only from Government shops, and that all private shops should be abolished. Persons in charge of Government shops should be paid a fixed salary without commission on the amount of business done, and therefore would have no temptation to push the sales.

Mr. Fraser's report suggests that the system proposed could without undue incon- venience and expense be applied to the larger settlements, and as regards European- owned estates a working arrangement might be arrived at which would conform to the spirit of the proposal. Although the system could not be applied to the smaller and more scattered settlements, it could be organized to cover approximately 4/5ths of the consumption. Mr. Fraser, whose views on this suggestion are shared by the Chinese, submits that the scheme is by no means free from objection and that the measure of its success would depend very largely on the class of man employed as Government retailer. As compared with the great neighbouring Colonies the total consumption of opium in North Borneo is smail, and there would be a serious difliculty in obtaining honest and reliable Chinese retailers at a salary commensurate with the scale of the traffic. It is admitted that a salesman on a fixed salary would have no incentive to push sales, but he would have every temptation to supplement his salary by illicit methods which easily suggest themselves, and which might well defeat the objects of the pro- posal. The Chinese consulted by Mr. Fraser, both smokers and non-smokers, were practically unanimous in the opinion that the introduction of this proposal would have no material effect on the consumption of opium.

In view of the above considerations the Court. while unable to agree to the adoption of (II) of the suggestions of the Advisory Committee in its entirety would be prepared to fall in with the proposal insofar as the local conditions in North Borneo permit, having due regard to the fulfilment of the object aimed at and to the practic- ability of carrying that object into effect.

(III) That a uniform maximum limit should be fixed for the amount of prepared opium placed on sale for consumption, calculated according to the number of adult Chinese male population, e.g., X taels per 10,000 adult Chinese males in the territory, and that the annual imports of raw opium should be limited to the amount required for that rate of consumption.

The Court are prepared to accept the principle of this proposal, but it is not con- sidered possible or desirable to apply the principle too meticulously to North Borneo. It is an admitted fact that certain clans of Chinese are heavier smokers than others, and it is considered that a sudden influx of Chinese belonging to clans who are notoriously heavy smokers might well result in a shortage of supplies, the effects of which would be serious. Any undue limitation of supplies would also be liable to lead to such abuses as hoarding and profiteering, which would be difficult to detect.

(IV) That the possibilities of the system of registration and licensing, which has already been introduced in some of the Far Eastern territories, should be thoroughly explored.

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Public opinion is in general strongly opposed to this proposal, which has been tried with indifferent success in Burmahi, Java, and elsewhere. Arguments against

its adoption are mang and válid. Prominent are the following:-

(a) General dislike of registration by Chinese

(b) The deterrent effect on immigration.

(e) Hardship on Chinese, especially of the poorer class who live at a distance from retailers. Registration would involve personal visits by these people to the nearest retailer.

(d) There is a considerable class of Chinese who, not being regular smokers, occasionally partake from social motives. In order to be in a position to return hospitality many of these would register as regular smokers, and from being casual smokers might become habitual smokers.

(e) The objection of the police authorities who recognize in the proposal a broad and easy road towards corrupt practices on the part of an Asiatic police force.

(f) Many non-smokers would register purely in order to obtain the drug which

they would retail at a large profit.

In view of the particular conditions obtaining in North Borneo as outlined in the above considerations (a) to (f) and of the negativo results of registration and licensing secured in Burmah, Java, and elsewhere, the Court are not prepared at the present juncture to do more than watch the results of registration in neighbouring territories with a view to its possible ultimate adoption in North Borneo.

(V) That the possibility should be considered of making uniform, so far as

circumstances permit

(a) the price at which prepared opium is retailed in the different terri-

tories, and

(b) the penalties for infraction of the law in regard to the import,

export, sale, and use of prepared opium.

It has hitherto been the practice to fix the retail price of opium in North Borneo in consultation with the authorities in Labuan and Brunei. These prices have always been lower than those obtaining in the Straits Settlements and Federated Malay States. In raising prices to a higher level regard must be had to conditions in other neigh- bouring States, otherwise smuggling and other abuses would inevitably result. Subject to these considerations the Court are in general in agreement with the proposal to secure uniformity.

(VI) (VII)

The Court concur in these proposals.

To summarise, the conclusions of the Court of Directors on the first five suggestions

of the Advisory Committee are as follows:-

(1) 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 Govern- ment will agree to restrict opium sales exclusively to Government shops or to abolish all private shops. Government will however consider favourably the practicability of the discontinuance of commissions on sales, and the substitution of fixed remuneration to retailers.

(II) The present practice in North Borneo is based on the principle of rationing. 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 immigration and have a disturbing effect on the resident Chinese population.

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

A. C. PEARSON,

Secretary.

29th May, 1924.

598

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