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PUBLIC RECORD OFFICE

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FLETC.O.882/11

PUBLIC RECORD OFFICE, LONDON |

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It is unlikely that the Persian merchants would be prepared to wait for their money until the opium had arrived at Singapore and been tested there. Even if they would agree, as suggested by the Consul-General, to a proportion of the purchase price being held back until the Singapore authorities were satisfied that the opium was up to the required standard, Mr. Wilson feared that in the event of an unsuitable consignment being received, it would be very difficult to obtain satisfaction from a merchant in

.Persia.

3. As an example of the kind of difficulties which he had in mind, Mr. Wilson referred to the possibility of opium being mixed with gummy materials which would make it impossible to convert it into chandu by the usual process. If one were dealing with a merchant on the spot, one could, no doubt, come to some satisfactory arrange- On the other hand (apart from the question whether the Consul-General has a sufficient staff to deal with the correspondence which might arise), Mr. Wilson felt that in a case of this kind it would be very difficult to deal satisfactorily with a merchant in the interior of Persia with whom even the Consul-General would not be in direct personal contact.

ment.

4. Mr. Wilson was accordingly decidedly in favour of buying through an English firm with an expert knowledge of the trade. He felt that this would probably not only make the financial arrangements more simple but would also give him a greater assurance that the opium supplied would be up to his requirements, particularly if it could be arranged that whichever firm may be selected to be dealt with should open an Agency, or appoint a representative at Singapore.

5. From the Department of Overseas Trade point of view the important thing is to deal with a firm with English connexions, so that the home trade will benefit.

6. It was accordingly decided that, before discussing the matter further, Mr. Wilson should get into touch with the representatives of three English firms (Messrs. Ziegler, Hadji Ali Akbar, and Bellairs, Atkinson and Company), with the assistance of the Department of Overseas Trade, to see what sort of arrangements and facilities could be offered by these three firms

7. Of the three firms, Sir Malcolm Delevingne was prepared to vouch for the honesty and integrity of Bellairs, Atkinson & Company. This firm, however, has been very hard hit by the arbitrary action of the Formosa monopoly, which they used to supply. The firm appears to be on its last legs, and unless they secure this business they will probably have to shut down. They have no great financial resources, and would accordingly have to be employed on an Agency basis.

8. Both Zieglers and Hadji Ali Akbar are houses of some substance and financial standing, and any arrangement made with either of these firms would probably be on a merchanting basis. Of these two firms Hadji Ali Akbar had already enlisted a Member of Parliament on their behalf, and were strongly recommended by the Depart- ment of Overseas Trade representatives in Persia. On the other hand, the Department of Overseas Trade regard Zieglers as a more satisfactory firm to deal with.

9. There was some discussion as to the possibility of co-operative buying in con- junction with Siam, the Netherlands East Indies, French Indo-China, North Borneo, and Sarawak. Apart from the advantage of cutting out competition in what is practically the only market, it was suggested that such an arrangement would be advantageous in that it would enable the joint buyers to set up a full-time Agency in Persia to look after their interests. It was, however, felt generally that it would probably be very difficult to come to a satisfactory working arrangement with the non-British authorities. If, however, it should ultimately be decided to deal with some firm on an Agency basis, and if the arrangements made worked satisfactorily, it might be possible later on to suggest to the Siamese, &c., authorities that they should buy through the same Agents. This would secure some, at any rate, of the benefits of co-operative buying. It was thought that this consideration indicated that there might be some advantage in making Agency arrangements with Bellairs, Atkinson and Company rather than in buying from Zieglers or Hadji Ali Akbar as merchants. Further discussion on this point was, however, deferred until Mr. Wilson had had an opportunity of meeting representatives of these three firms.

10. Some reference was made to a statement that the Persian Government were intending to set up a Government opium monopoly. It was felt that this factor might accentuate the tendency, which had already become apparent with the entry of more of the Far Eastern Government monopolies into the market, for the price of Persian opium to rise. It was accordingly suggested that whatever might be the outcome of the present discussions, the Straits Settlements Government would be well advised to explore the possibilities of other sources of supply.

C. 30801/A/27 [No. 77].

169

No. 125.

STRAITS SETTLEMENTS.

THE SECRETARY OF STATE to THE GOVERNOR. (Sent 5 p.m., 2nd September, 1927.)

TELEGRAM.

[Answered by Nos. 126 and 130.]

CONFIDENTIAL. Your telegram 3rd May.* Purchase of Persian opium. After full discussion Wilson recommends appointment of Bellairs Atkinson as Agents on commission basis. Figure suggested by firm 1s. 6d. per lb., but this was in con- nexion with proposal to supply as merchants, and Wilson of opinion that they would accept 1s. a lb. on purely commission basis. Proportion would be retained to form guarantee fund. They would have representative in Persia to carry out necessary supervision and testing.

It is proposed that in the first instance they should buy from Haji Ali Akbar, who are prepared to sell at cost price plus 2 per cent., and will agree to postpone- ment of payment till opium delivered and tested at Singapore.

I

After carefully considering alternative proposals which have been discussed, agree with Wilson's recommendation. Other Departments concerned have no objec- tion. Telegraph whether you agree to conclusion of agreement with firm named for five years, determinable by one year's notice on either side with provision for renewal.

-AMERY.

C. 30801/A/27 [No. 85].

No. 126.

STRAITS SETTLEMENTS.

THE GOVERNOR to THE SECRETARY OF STATE. (Received 8 p.m., 17th September, 1927.)

TELEGRAM.

[Answered by No. 130.]

17TH SEPTEMBER. Confidential. Your telegram of 2nd September, Con- fidential. Persian opium. The question is not urgent as we have in hand nearly a year's supply. In the circumstances I propose to reply by letter rather than by telegram as proposal appears to leave the question of price too indefinite. It will also be necessary to consult the Federated Malay States Government who are directly interested in price of prepared opium supplied to them by the Straits Government.

C. 30801/A/27 [No. 95].

No. 127.

SIR HUGH CLIFFORD (GOVERNOR, STRAITS SETTLEMENTS)

to

SIR S. H. WILSON (UNDER-SECRETARY OF STATE, COLONIAL OFFICE). [Answered by No. 129.]

MY DEAR WILSON,

I AM not very happy about the proposed arrangements for our opium supply. The Department cabled to me on 2nd September recommending Bellairs, Atkinson as our Agents for the purchase of opium from Persia; but as the matter is not urgent from our point of view, as we have an ample stock of opium on hand, I propose to reply by despatch, not by wire, and must first consult the Government of the

*C. 30801/A/27 [No. 35]: not printed.

Government House, Singapore, 22nd September, 1927.

+ No. 125.