CO885-11 — Page 664

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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The Committee agreed that pending the visit of the Commission of Inquiry the present policy which had been adopted in Hong Kong, namely, the concentration of preventive measures on the importer and larger distributor should be continued and that it was very desirable that the Commission should be appointed and proceed to the Far East as soon as practicable. To this end, the Foreign Office would endeavour to expedite the awaited replies from the Governments concerned.

Home Office, 14th July, 1928.

C. 62836/29 [No. 1].

(Secret.)

SIR,

No. 106.

HONG KONG.

THE GOVERNOR to THE SECRETARY OF STATE.

(Received 3rd April, 1929.)

[Answered by No. 107.]

Government House, Hong Kong, 25th February, 1929.

In your Secret (2) despatch of the 12th April, 1928,* you stated that it would be permissible for the Hong Kong Government to purchase Persian opium to supple- ment the decreasing supplies of Indian opium available to this Colony, so far as these are not sufficient to meet the demand for Government opium at present prices.

1931.

122

1932. 98

1933. 73

1934. 49

1935. 24

2. The prospective allotment of Indian opium to Hong Kong is as follows:-

1929. 1930. Year.

147 171 Chests After the year 1935 nothing will be allotted. This allotment was based upon the average quantity of Indian opium actually imported by Hong Kong during the five years 1922-1926 and a consequent maximum allowance of 220 chests in 1927, which since then has been progressively reduced. Now the population of this Colony was estimated in 1926 to be 874,420 souls. The present population cannot be less than one million souls and the amount of opium which is now consumed annually in Hong Kong is undoubtedly more than in 1922-1926, for the opium habit is as prevalent as ever. In 1918 China was reported to be practically free of the poppy, but to-day the cultivation of the poppy in China is more abundant than ever and the various provincial authorities are chiefly concerned to make, each and all, as much revenue as they can out of the production and consumption of opium. Nevertheless the quantity of Indian opium sold by the Hong Kong Government Monopoly during 1928, in which year we had an allotment of 196 chests, was only 180 chests. But it is ridiculous to suppose that a population which has increased by 14 per cent., and in which opium smoking is as prevalent as ever, did in fact consume 18 per cent. less opium in 1928 than it did in 1926. The truth is, of course, that the Hong Kong market is now supplied in the main not by the Government Monopoly, but by opium smugglers, the reason being that the smugglers sell opium at prices ranging as low as $2.00 a tael, whereas the prices at which the Hong Kong Government now sells opium are-

(a) $50.00 for a three-tael tin of Kamshan, i.e., pure Indian opium, and (b) $14.50 a tael for the Hong Kong brand, which at present consists of 75 per cent. of Indian opium and 25 per cent. of whatever kind of confiscated opiùm is available. It is, therefore, only well-to-do Chinese with a taste for All other Indian opium who purchase from the Hong Kong Government. opium-smokers get their supplies from smugglers.

The situation was fully described in my Secret despatch of the 12th January, 1928,† which I beg you to re-read.

2. I cannot believe that His Majesty's Government really desires that so out- rageous a state of affairs should continue indefinitely in this Colony. I submit, there- fore, that, if I cannot be allowed to purchase enough Persian or Chinese opium to make effective the policy initiated by me in September, 1927, by which the opium- smugglers were for a time driven out of the Hong Kong market, I may at least be allowed to reduce the present prices of Government opium in this Colony sufficiently to make it possible for me to avail myself of your permission to supplement by Persian opium the decreasing supply of Indian opium now available.

* No. 102.

† No. 100.

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3. Accordingly I recommend that I may be now authorized to purchase in such instalments as local conditions may suggest and at such times as in my discretion seems most advantageous, hetween now and the end of 1930, Persian opium to a total quantity of 146 chests, namely, the difference between the maximum Indian allotment of 220 chests in 1927 and the allowances of 196 chests in 1928, 171 chests in 1929, and 147 chests in 1930. I further recommend the following scale of prices for sale of prepared opium in this Colony :

(a) Kamshan, or pure Indian, opium to be raised from the present price of $50.00 per three-tael tin first to $55.00 and finally to $60.00 per three- tael tin;

(b) a new brand composed at first of Indian opium only, but subsequently blended by degrees with a small proportion of Persian opium, boiled to a lower consistency than the Kamshan brand, to be placed on sale in the following sizes one tael at $15.00, four mace at $6.00, two mace at $3.00;

(c) a blend of Indian and Persian opium, the percentage of Persian being gradually increased as time goes on, to be sold in the following sizes, viz., three candareens at 30 cents and six candareens at 60 cents.

4. The object of these recommendations is to sell with the greatest advantage

to our revenue such opium as is at the disposal of the Hong Kong Government. But in order to avoid misconception, it is well that I should categorically repeat the state- ment which I made in Legislative Council on the 1st September, 1927, that "this Government is very willing to prohibit the consumption of opium in the Colony and to forego its revenue from this source as soon as production and consumption of opium in China are suppressed." But, when we know that for each dollar of opium revenue we receive the less, a dollar or more has gone to swell the funds of smugglers, to facilitate increased opium consumption and to postpone the date of final suppression, then we regard the subject in a different light; and we definitely consider that it is preferable that the Hong Kong Government rather than smugglers should make money out of such opium as comes to this Colony. There are many most necessary public works which have remained for years on our waiting list owing to lack of funds. I may mention especially the proposed new Government Civil Hospital on the island, the new Prison, the new Queen's College, and other school buildings both on the island and the mainland, several Police Stations and markets as well as a number of roads. If the Colony's opium revenue, while it lasts, enables us to complete these works, then at least some measure of public good will have been derived from this traffic.

5. I should be glad to have your reply to this despatch by telegram, for it seems likely that the Persian Government, when it makes its opium monopoly effective, will raise the price of its exported opium above the price at present charged by India.

I have, &c.,

C. CLEMENTI,

C. 62836/29 [No. 7].

No. 107. HONG KONG.

THE SECRETARY OF STATE to THE GOVERNOR.

(Sent 5.55, p.m., 2nd May, 1929.) TELEGRAM.

Governor, &c.

SECRET. Your despatch 25th February, Secret.* Opium. I regret that His Majesty's Government cannot approve any departure from the existing policy at present, especially in view of the fact that, as I informed you in my telegram of the 2nd of April,t a League of Nations Commission to investigate the opium problem in the Far East, has now been definitely appointed and consideration of future policy must naturally await the result of those investigations. The proposed adjustment of prices cannot, therefore, be approved and there is no necessity to buy Persian opium at present as Indian supplies with existing stocks will be sufficient to meet the anticipated demand at present prices for some time to come.—ÂMERY.

* No. 106.

† C. 63004/29 (No. 2]: not printed.

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