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PUBLIC RECORD OFFICE

Reference :-

THERE C.O.882/11

mumimini

PUBLIC RECORD OFFICE, LONDON

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

2.

172

As you are aware, the Governments of the Federated and Unfederated Malay States all draw their supplies of prepared opium from the Government factory in Singapore, and as they are directly interested, in consequence, in the price at which this Government buys its supplies, I have deferred replying in amplification of my telegram until I had had an opportunity of consulting the Chief Secretary, Federated Malay States.

3. My hesitation in agreeing to the conclusion of the proposed agreement is due; as already stated, to the fact that it appears to leave the cost price too indefinite. Without in any way reflecting on the honesty of purpose of the firm in question, it is evident that without some adequate safeguard being provided against an excessive cost price," there is not merely no inducement to either Messrs. Bellairs, Atkinson and Co., or Messrs. Hadji Ali Akbar and Sons to quote the lowest price, but the interests of the latter firm, in view of their commission being based on a percentage of the cost price, would lie directly in the opposite direction.

LC

4. At the present time this Government obtains its supplies through local dealers, who have their own representatives or agents in Persia. While there is reason ring," have a work- to believe that these local dealers, if not actually constituting a ing arrangement by which toorkeen competition is obviated, there is this advantage in the present arrangement that the dealers being on the spot, and being men of sub- stance, it is possible for the Government to obtain redress with comparative ease in Great stress has the event of the price being excessive or the quality defective.

been laid on the fact that the chief of these local dealers is named Nemazi, and that members of his family are alleged to have been involved in disreputable practices in Hong Kong and elsewhere; but I fear it has to be admitted that few dealers in opium are free from every vestige of suspicion, and it is not by any means unlikely that the firms which it is now proposed to appoint our agents will, in fact, be buying from the agents of the very persons whom it is desired to ostracize. I hold no brief for the Nemazi family; but after reading all that has been written about the Singapore dealer of that name, Mr. M. A. Nemazi, I feel disposed to share the views expressed by Sir Edward Cook in his letter to Mr. Waterlow, which formed an enclosure to your Confidential despatch of the 8th July, 1927.*

5. As stated in my telegram above referred to, this Government has already in stock supplies of Persian opium sufficient to last for the next twelve months, and the matter is therefore not one of extreme urgency. I have consequently thought it advisable to lay my views before you more fully than could conveniently be done by telegram. If some means could be devised by which this Government could be assured of obtaining its supplies at a price lower than, or at all events not higher than, it would have to pay under the present arrangements, I should have no objection to an agreement being made on the lines indicated in your telegram. It is difficult to suggest any such means, but it occurs to me that the end in view might be attained if the percentage were to be partly based on the amount by which the "cost price fell below a stated figure. Alternatively, it might be possible to provide a periodical check by means of information regarding the ruling market rate which might be furnished by His Maesty's Consul-General at Bushire, who has already offered his good offices in the letter, a copy of which was enclosed in your Confidential despatch No. 2 of the 18th January, 1927.†

I have, &c.,

C. 30801/B/27 [No. 15].

No. 131.

HUGH CLIFFORD,

Malayan Civil Service,

Governor.

STRAITS SETTLEMENTS.

THE SECRETARY OF STATE to THE GOVERNOR.

(Paraphrase.)

(Sent 8.45 p.m., 10th November, 1927.)

TELEGRAM.

CONFIDENTIAL. Your Confidential despatch 1st October.

35

I fear that purchase

of Persian opium from Nemazi or local associates must be regarded as out of the question. As you are already aware, apart from the objections which have been

* C. 30046/27 [No. 21]: not printed.

+ C. 30046/27 [No. 4]: not printed.

* No. 130

173

indicated in previous correspondence, His Majesty's Government as long ago as May last intimated to three foreign Governments the undesirability that he should be em- ployed. It is hoped that the Agents proposed in iny telegram 2nd September* would eventually purchase directly from the same sources and not from Agents of the Singapore ring. It is not proposed to tie Agents down to H. A. Akbar, who were referred to merely as potential suppliers who were prepared to defer receipt of pay- ment until after delivery. It is the opinion of the Consul-General, Bushire, that competition among Persian merchants is sufficient to prevent the market being rigged by Nemazi.

As regards the point raised in paragraph 3 of your despatch, I would suggest that this could be met by obtaining from Consul-General, Bushire, monthly or, if desired, fortnightly information as to current market rates and by inserting a clause in the agreement providing for right of Government to terminate it at month's notice

if prices paid exceed prices which Consul-General certifies as reasonable. inform me by telegraph whether you agree to this.

Please

Draft heads of Agreement, including clause on above lines have been prepared by Crown Agents in conjunction with Wilson. If an affirmative reply is received to above question, draft Heads will be discussed with Bellairs Atkinson, and in order that you may give the matter consideration summary of the proposed agreement will then be telegraphed to you.-AMERY.

C. 53017/28 [No. 1].

No. 132.

STRAITS SETTLEMENTS.

THE GOVERNOR to THE SECRETARY OF STATE. (Received 16th January, 1928.)

(Confidential.)

SIR,

Government House, Singapore, 22nd December, 1927. WITH reference to your telegram dated 24th October, 1927,† and in continua- tion of my Straits Settlements Confidential despatch No. 338 dated 1st October, 1927,‡ on the subject of the employment of Messrs. Bellairs, Atkinson and Co., and Messrs. Hadji Ali Akbar for the purchase of the Persian opium required by this Government, I have the honour to inform you that I have fully discussed the proposed scheme with my Executive Council and that the Council is unanimously against its adoption.

2. This Government fully understands that the question of the consumption of opium is not a purely domestic matter, but it considers that the method of purchase, the dealers or agents employed, the terms and conditions on which purchases should be effected, and the price to be paid, are primarily domestic matters since the price to be paid must be met from the revenues of this Colony. In the present state of our finances all large payments are very carefully scrutinized by the Unofficial Members of the Legislative Council who are highly suspicious of any transaction that is capable of being interpreted as being dictated by His Majesty's Government. The latter, it is feared by them, is more likely to be guided in its decisions in this regard by con- siderations connected with its general policy and influence at Geneva than by those which bear directly upon the financial and other interests of the Straits Settlements and of British Malaya; and, this being so, I would ask you to realize that it is absolutely necessary for my Government to be in a position successfully and effectually to meet all objections, and to put forward a really convincing case in support of the exceptional action which, in this matter, you are urging so strongly upon my acceptance. I regret to say that the information at present in my possession does not enable me to do this. I will return to this point in a later paragraph of this despatch.

3. The requirements of this Government with regard to purchase of opium are firstly, security of supplies; secondly, security as regards quality; thirdly, security that the price charged is not exorbitant; and fourthly, a knowledge of commitments for a reasonable time in advance. These requirements have all been satisfied by the local dealers from whom Persian opium has been bought in the past. These dealers have established connexions in Persia, and as far as this Government's information goes, are to a large extent in competition with each other. If the opium supplied is not up to the quality or standard ordered, this Government is able to exert pressure locally on the suppliers; the reports of the Government Analyst as to morphine content

‡ No. 130.

* No. 125.

+ No. 129.