CO885-11 — Page 656

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PUBLIC RECORD OFFICE

Reference:

C.O.882/11

PUBLIC RECORD OFFICE, LONDON

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

136

The

refugees. The only immediately practicable step towards effecting ultimate reduction in Hong Kong is to continue to attack smuggling interests which otherwise will more and more control the situation. (2) Step taken in Hong Kong has now passed beyond the experimental stage and the fact that there is no sign of increased consumption to balance the increase in Government sales shows its success which is further evidenced by the fact accepted in the Colony that the smugglers have had a serious setback. In addition the daily average of opium offenders in jail has fallen from 540 to 361, a very important factor in view of its chronic overcrowding. (3) If no effective opposi- tion is offered the position of the opium smuggler will grow daily stronger. interests concerned to oppose ultimate reduction and the profits of the return to illicit business become progressively more formidable. The Hong Kong market is extremely desirable and before the recent action annual profits from smuggling were not less than 1,000,000 dollars. In addition there is still enormous wholesale opium smuggling business from South China for which Hong Kong is the natural port of shipment, and through which the Colony is brought into disrepute. Such business will be encouraged further by any relaxation or failure of the only effective attack that Hong Kong is in a position to make on any part of the smuggling system. The League cause will be better served by steps taken here to regain control than by continuing to allow smugglers to cater for greater part of Hong Kong consumption, and thus adding lifficulties to be surmounted later. (4) I urge that present circumstances are full justification for action being taken now as authorized by Mr. Amery's Confidential despatch of 25th January, 1926,* to supplement from other sources restricted supplies from India. This right should be exercised now if ever on the grounds of rapid and That degeneration unforeseen degeneration of China with its effect on Hong Kong. has further resulted in constant expansion of our population, and I would point out that in his telegram of 11th September, 1922,† the Officer Administering the Govern- ment reported that legitimate opium consumption of this Colony had been reduced to 304 chests monthly, whereas allowance made from India for whole of next year is only 196 chests which is very far below the needs of a Chinese population estimated at 647.000 in 1922 and now at least 900,000 and continually augmented by influx of refugees from China. (5) Persian opium is at present being smuggled into South China on a large scale, and I submit the objects of the League would be better served by agreement between the Persian Government and His Majesty's Government provid- ing for an (? omission) and regular supply to Hong Kong which would thus be excluded from the operations of this class of smuggler. Such an agreement would be a further step towards the international control of opium traffic. (6) I again venture therefore to urge most strongly that it is necessary to grant supplies required if Hong Kong situation is not to get completely out of hand, and to permit temporary importation from Singapore which is now essential to fill the gap before supplies can arrive from Persia. I submit also that the domination of Hong Kong opium market by smugglers may be expected to produce greater international difficulties than any misrepresentation of successful attempt to make opium smuggling in this Colony less profitable now being made by this Government.

C. 30236/27 [No. 43].

No. 99.

HONG KONG.

THE SECRETARY OF STATE to THE GOVERNOR,

(Paraphrase.)

(Sent 10.45 a.m., 17th December, 1927.) TELEGRAM.

YOUR telegram of 12th December. Regret it is impossible to depart from the decision conveyed in my telegram of 7th December§ on opium question.-AMERY,

* No. 112.

† 45629/22; not printed.

‡ No. 98.

§ No. 96.

137

C. 52836/28 [No. 2].

HONG

No. 100.

KONG.

(Secret.)

SIR,

THE GOVERNOR to THE SECRETARY OF STATE. (Received 18th February, 1928.) [Answered by No. 102.]

Government House, Hong Kong, 12th January, 1928. His Majesty's Government has recently taken two decisions which will seriously affect the opium problem in southern China, namely :—

and

(a) that opium shall not be bought by the British Government from the Persian Government for the Hong Kong Government's Opium Monopoly: see the correspondence ending with your telegram of the 17th December, 1927* : (b) that Indian opium shall not be sold by the British Government to the Portuguese Government for the Macao Government's Opium Monopoly: see the correspondence ending with your Confidential despatch of the 17th October, 1927.†

It is very important that the nature of the consequences which will flow from these decisions should be clearly realized, for their effect can only be, I fear, to defeat the objects which the League of Nations aims at in regard to the opium traffic, that

is to say, its control with a view to eventual suppression.

2.

The reasons given me for the decisions taken by His Majesty's Government are as follows:-

(a) In the case of Hong Kong it was felt that largely increased sales of Govern- ment opium could only be defended, if it could be shown that a useful purpose, namely, the capture of the Hong Kong opium market at present supplied by smugglers, would be achieved. It was feared that even at reduced prices the smugglers would undersell the Government and re-establish their position. Moreover, even if the market were captured, the situation in Hong Kong would still be that prepared opium could be bought without restriction as to quantity, for control of consumption by registration and rationing is impracticable. Also His Majesty's Government would have difficulty in defending at Geneva large purchases from Persia for a British Colony, having regard to the efforts the League is making to induce Persia to decrease cultivation of the poppy (your telegram to Mr. Southorn, dated 15th October, 1927). Finally, there was no sufficient expectation of ultimate reduction of opium consumption in Hong Kong to warrant purchases from Persia on behalf of the Colony (your telegram to me, dated 7th December, 1927§).

(b) In the case of Macao you authorized me to make a small loan of Indian opium, but you stated that there could be no question of India making good to Hong Kong the opium transferred to Macao, or supplying opium to Macao for the purpose of repay- ing the loan or for carrying on that Colony's monopoly. You said that Persia had been the normal source of opium supplies for Macao for some time past, and that, so far as you knew, the Macao Government had no difficulty in getting supplies from Persia (your telegram to me, dated 30th June, 1927). His Majesty's Government fully appreciated the efforts of the Portuguese Government to introduce measures of control at Macao to give effect to the obligations assumed under the Opium Agree- ment of 1925, and had every sympathy with the desire of the Portuguese authorities to make these measures as effective as possible. But there could be no direct supply from India to Macao, because it is the definite policy of the Government of India to extinguish the export of Indian opium to the Far East in the year 1936 by means of progressive annual reductions and to distribute, pending final extinction, the reduced annual totals of exports only to the eight countries to which export is at present allowed under direct sale, namely, Hong Kong, Malaya, Ceylon, North Borneo, Sarawak, Siam, Indo-China, and the Netherlands East Indies. Nor could there be any supply of opium to Macao from India ria Hong Kong, because the provisions of Article 6 of the Opium Agreement of 1925, to which both Portugal and Great

* No. 09.

+ C. 30049/27 [No. 8]: not printed.

‡ No. 90.

|| C. 30049/27 [No. 41]: not printed.

§ No. 96.