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6. In the year 1919 the position was again reviewed in view of the impending general bringing into force of The Hague Convention of 1912, by virtue of Article 295 of the Treaty of Versailles. As a result of this review it was generally speaking not found necessary to adopt any radical modification of the policy already adopted, though in various minor directions the opium laws were made more stringent.

7. In the Straits Settlements and the Federated Malay States however the local Governments formed the opinion that the time was ripe for an attempt to hasten the process of suppression by introducing a system of rationing. Accordingly at the beginning of the year 1920 steps were taken to reduce the amount of opium supplied to retail shops by 10 per cent. of the average monthly sales for the previous 12 months. It was, however, found that hoarding and profiteering occurred to such an extent as There was a great to cause great discontent among the poorer classes of consumers. deal of rowdyism, and after a few months' trial the experiment had to be abandoned and the policy of gradual suppression by progressive reductions in the number of retail shops and increases in price was again reverted to.

8. The situation as it appeared to the League of Nations Opium Advisory Com- mittee in 1923 (when they recommended the calling of a Conference of the Powers concerned to consider the possibility of taking further measures to secure the more effective application of Chapter II of The Hague Convention) has been summarized by Sir Malcolm Delevingne in paragraph G of his Report on the Geneva Conferences (Čmd. 2461) as follows :--

Though the convention had only been in operation for three years, most of the Powers had introduced restrictive measures to reduce the practice in their Far Eastern possessions a good many years before, and information had been furnished by the Governmente to the com- mittee as to the nature and effectiveness of the measures taken. The committee came to the conclusion, on the basis of the official reports and other information, that the situation was not satisfactory. The measures which had been taken had met with a considerable measure of success, and substantial reductions in the amount of consumption had followed their introduc- tion; but the maximum effect of the measures appeared to have been reached and the position had become stationary. The committee noted also a considerable divergence between the measures adopted in the different territories. Most, but not all, had made the traffic a Government Monopoly with a view to enabling the Government to keep a close control and eliminating the element of private profit, though in most places the retail trade was in the hands of private shopkeepers, acting under Government licence and supervision. Some Powers had adopted with considerable success the policy of raising the price to a very high figure. Some Powers again, had tried the system of registration of smokers and rationing, but not all with equally good results."

9. It is clear that the League of Nations Advisory Committee appreciated the efforts which had been made in the territories concerned (including our Colonies) to give effect to the obligations undertaken in Chapter II of The Hague Convention, their reason for proposing a Conference being that these measures appeared to have produced their maximum effect. The most important of the suggestions which were put forward by the Advisory Committee as a basis for discussion at the proposed International Conference were :—

That the opium business should be a complete Government monopoly and that retail sales should be made only from Government shops, by persons on a fixed salary, without any commission on the amount of business done; that a uniform maximum limit should be fixed for the amount of prepared opium placed on sale, calculated according to the number of the adult Chinese male population; and that the possibili- ties of the system of registration and rationing, which had already been introduced in some Far Eastern Territories, should be thoroughly explored.

10. In preparation for the Conference a strong Committee was appointed by the Governor of the Straits Settlements to inquire into the use of prepared opium in Malaya with special reference to the suggestions of the League of Nations Advisory Committee. After an exhaustive survey of the situation the Committee issued a Report in February, 1924, containing a number of conclusions and recommendations which may be summarised as follows:-

(1) It was doubtful whether under the existing measures of control a further steady reduc- tion of consumption of prepared opium could be anticipated.

(2) That the eventual suppression of opium smoking in Malaya can only be achieved through control over smokers individually, such as might be secured by a system of registration and rationing. They emphasized, however, that the benefit to be lerived from such a measure is in direct proportion to its effectiveness in practice.

(3) That (having regard to the experience in other countries where the system had been ried) the ultimate success of such a system is problematical, and that any attempt to introduce it prematurely would be certain to fail.

(4) That the Government should accordingly proceed by a series of stages, feeling their The stages recom- way and accumulating information and experience as they advanced.

mended were:-

(a) the complete elimination of the private retail shops and smoking saloons and the sub-

stitution of Government shops and saloons;

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"observer"

(b) concurrently with (a) the adoption of an

system, under which un "'observer "would be installed in each Government shop "to quietly study the

people who come to buy opium and gradually to compile facts as to the number and class of consumers with a view to seeing what the next step should be ''; (c) the creation of a permanent Advisory Committee who (inter alia) should guide the

experiments in connexion with the "observer" system;

(d) that on the basis of the information and experience thus gained, a measure of simple registration of consumers should be framed in such a manner as to cause a minimum of friction;

(e) that the system of registration of smokers (without any rationing provisions) should

be given an exhaustive trial before any further steps are taken; ()this trial should be recognized by the Malayan Advisory Committee to be the pre- liminary step towards an individual rationing system, and should enable the Committee to frame the provisions of the extended measure of individual rationing in such a manner as to give that measure a reasonable chance of success. 11. The chief considerations on which these recommendations were based may be briefly summarised as follows:-

(a) An attempt had been made in 1919 (vide paragraphs 6 and 7 above) to introduce a system of restricting the "bulk" supplies of chandlu placed on sale (without any control over individual consumers), and had completely failed. Moreover, owing to tribal variation "wholesale ration (based of degree of indulgence, it would be impossible to arrive at a

on an estimate of average consumption per caput, and the number of consumers) which would be suitable for application in the various territories in British Malaya;

(6) the success of any system of control is ultimately dependent on at least the acquiescence of the Chinese consumers;

(c) there is inherent in the minds of the less educated Chinese a good deal of objection to anything in the nature of individual registration. It is necessary that the measures adopted should be graded in such a way as to remove this prejudice;

(d) there were practically unlimited supplies of cheap opium available in China. The price of Government chandu in Malaya was so high that enormous profits could be made by successful smugglers. Opium is very easily smuggled; and for geographical reasons (and it may be added the corruptibility of the armies of Asiatic preventive officers who would be required) it is practically impossible to exclude Chinese opiuni from Malaya-and in fact at the time when the Report was written, the smuggling of Chinese opium into Malaya had already become a serious problem and was rapidly increasing;

(c) the premature introduction of measures of control which are not acceptable to the Chinese would be certain to lead to such wholesale evasion (rendered possible by the existence of illicit opium) that the system would break down;

the incentive to smugglers (already great) would be greatly increased, and ultimately the whole situation would get completely out of hand.

12.

In addition to their main recommendations summarised in paragraph 10 above, the Committee also recommended the adoption of certain subsidiary measures, which (for the sake of completeness) it may be well to mention here:- (a) That the number of opium shops should be drastically reduced;

(6) that the system of packing chandu in paper packets should be replaced by a system of packing in tin tubes with the objects of (1) assisting in the detection of illicit opium, the traffic in which may be expected to increase, with the introduction of more stringent measures of control, and (2) reducing the smallest quantity sold, and so (it is hoped) leading to a reduction in consumption by smokers of the poorer class;

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(c) that any further increase in the price of Government chandu would probably (1) in- crease the incentive to smugglers, and (2) lead to an increase in the habit of swallowing" dross which is regarded as the most pernicious phase of the opium habit in Malaya;

(d) that with a view to discouraging the habit of swallowing dross, the price paid by Government for dross returned to it should be increased.

13. The recommendations of the Malayan Opium Committee were accepted by His Majesty's Government as representing the best (if not the only really practic- After the conclusion of the Geneva Confer- able) policy to achieve the end in view.

ences, the Governor of the Straits Settlements was accordingly informed that the Secretary of State approved of the adoption of the Committee's recommendations as a working basis for the policy to be followed in Malaya. The hope was, however, expressed that the measures introduced to carry out these recommendations would be so designed as to make it possible (at the beginning of the 15-year period provided for in the Protocol to the Geneva Agreement) to prevent the use of prepared opium being adopted by persons not then already smokers and to prevent the supply of opium to new immigrants, in so far as those steps might not already have been taken at that date.

14. The Malayan Governments are loyally carrying out this policy, and great progress had already been made.

15.

The Elimination of Private Retailers.

In the Federated Malay States the change over (both for retail shops and smoking saloons) from the system of private retail sale, to sale by Government agents in Government shops was finally completed by the 1st of January, 1926; and in the

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