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but to a considerably larger sum. I do not myself believe that the Chinese Government has ever received 40 taels l-kin per picul, and I cannot but regard the proposal made last summer to recommend Her Majesty's Government to agree to a fixed rate of 50 taels as exceedingly liberal, After much debate at Tien-tsin, I had, however, consented to propose that the rate be fixed at 60 taels, but the Grand Secretary Li still pressing for an advance upon this amount, I did at least promise to recommend that a rate of 70 taels bo agreed to, provided that certain conditions important to the general trade be satisfied.

Of these conditions I shall have more to say in due time; but first, in order finally to dispose of the taxation of opium, I must record an alternative proposal of the Grand. Secretary Li: the augmentation, namely, of the Tariff duty now levied by the Maritime Customs at the port of entry, the collection of li-kin being left, as in time past, in the

hands of the native collectorates.

I had in effect myself suggested the possibility of such an alternative when the Grand Secretary was in Peking last summer, but purely as an idea of my own, which I had not been authorized by my Government to put forward; and I had mentioned 15 taels, that is an additional, half duty, as the amount of increase that I could name to my Government as reasonable. The Grand Secretary Li proposes, if the new methods of collecting li-kin be not sanctioned, that the Tariff duty be at least doubled, that is, that an addition of 30 taels be made to the present Tariff duty of 60 taels.

After much debate I promised to recommend an addition of 20 taels in lieu of the 15 taels addition that I was earlier prepared to support, a total Tariff duty, that is to say, of 50 taels in lieu of the present duty of 30 taels, the li-kin on opium at the ports or inland being of course collected in the old way.

But again this counter-proposition is no more than a suggestion of my own, which I undertake to submit to my Government for consideration. I have received no authority whatever to put it on its trial; and so of every other proposition regarding the opium revenue. The adoption or rejection of this measure or that must depend in the first instance upon Her Majesty's Government, and in the case of the greater number of schemes now propounded the consent of other Governments will be also indispensable.

If the Governments of England and China determine to adopt the scheme of Mr. Samuel, by which the former Government would become sole purchaser and distributor of opium; or the scheme of the Canton monopolists; or the scheme sketched under authority of the Grand Secretary Li, by Ma Taotai, which would make Hong Kong the head-quarters of the sale and distribution of opium, a fixed rate of li-kin being assured to the Chinese Government; or the modification of this scheme, by which a Chinese agency would purchase all opium in India at a fixed rate of value, the Chinese Government reserving to itself the regulation of the amount of any further charge-in each and all of these cases the two Governments would be free to act together, independently of the opinion of any third party. But to the acceptance of any of the other schemes that have been spoken of, the acquiescence of other Governments is essential.

This observation applies equally to the Opium Clauses of the Agreement signed at Chefoo in 1876; to the limitation of these to the port of Shanghae, as proposed by your Imperial Highness in 1880; to the proposition of the Grand Secretary Li to levy a li-kin of 80 taels with the Tariff duty of 30 taels through the Maritime Customs; to the alterna- tive propositions of his Excellency Li to substitute an increase of the Tariff for the customs levy of the higher rate of li-kin; lastly, to my own proposal to recommend a h-kin of 50 tacls, or an addition of 20 tacls to the present Tariff.

The proposition of the Grand Secretary Tso to levy a li-kin of 120 taels upon opium, to be levied by the Chinese authorities independently, is not included in the above list; but with reference to any other of the schemes enumerated, it may be observed that the Government of China would find itself obliged to obtain the consent of the other Treaty Powers to any change that had simply the approval of Her Majesty's Government.

I am not of opinion that it would be so hard to obtain their consent. The foreign opium imported is almost exclusively produced in British India, and I cannot suppose that any Treaty Power would decline to concede any modification of the provisions affecting opium that had been accepted by the British Government, if only the complaints regarding undue taxation inland, with respect to which all the Powers alike make common cause, were redressed. These complaints, it appears to me, will have to be redressed; and anxious as I am to support any measure that may terminate discussion of the opium question, I should think it my duty, when reporting the measure for which the Chinese Government may declare its preference, to recommend that a settlement of the other question, the taxation of the import and export trade inland, be made by Her Majesty's Government a condition of the acceptance of any arrangement affecting opium.

The Grand Secretary Li objects that this will retard the settlement of the opium

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question. I entertain no such apprehension. But in any case I feel bound to pursue this The third section of the Chefoo Agreement was negotiated, not because the taxation of opium directly called for negotiation at all. What I had in view was the adjustment long called for of the taxation affecting all trade other than in opium. The reference to opium is due simply to this, that as adoption of the proposals I made would have occasioned a loss of the revenue due on opium to China, I volunteered certain other proposals which might protect China against that loss. I have now been co-operating for two years with the Representatives of other Powers in conferences with the Tsung-li Yamên regarding the general trade, and I do not consider myself free, without consulting them, to take a line of my own.

If my meaning be not plain to your Imperial Highness, a single interview with the Ministers of the Tsung-li Yamên will, I am confident, suffice at the same time to convince them that I do not for a moment abate my desire for such a termination of the opium discussion as will be satisfactory alike to the Government of China and to my own.

I refer, for the moment, simply to the revenue derived by each from the trade in opium. Should the arrangement accepted by both be of such a nature as to bring about an eventual extinction of the trade, no one will be better pleased than myself. If during this long discussion I have dwelt rather on the financial than the moral interest of the opium question, it is because I am convinced that so long as the opium produced in China is sufficient to supply the needs of the Chinese, the reduction of the quantity of opium imported, or even the total exclusion of foreign opium, will not remoralize the opium smoker. Nor is this conviction exclusively mine. It is held as firmly by many Chinese of the highest standing.

It is easy to assert that as no Government but the British Government imports opium into China, and the Chinese suffer morally and materially from opium smoking, the evil done to the Chinese smoker lies in consequence wholly at the door of the English. If it be true that the drug was first imported into China by the English (which is disputed), the quantity even now imported into China is far too small for the consumption of more than a very limited number of consumers. The wants of the majority are supplied by opium manufactured from the poppy grown on Chinese soil.

In the western provinces of China, from north to south, British Indian opium is not to be met with, while in every place the native opium is manufactured and taxed. It is useless to complain of the conduct of England or of any other country, so long as this state of things is allowed to continue.

But I will pursue the moral question no further. When I have ascertained which of the numerous schemes that are now before it has the preference of the Chinese Govern- ment, I shall without loss of time submit it to Her Majesty's Government.

In a late conversation with the Grand Secretary Li, his Excellency expressed a hope that if either of the schemes that would involve establishment of Agencies in India or at Hong-Kong were accepted, no objection would be opposed to the appointment by the Chinese Government of foreigners in whom it had confidence, to assist the Chinese chiefs or members of such Agencies. At Hong-Kong his Excellency Li appeared to think it might be desirable to station a Chinese Wei Yuan" and a member of the Customs Inspec-

torate.

A full reply upon any of these points being beyond my powers, I could only assure the Grand Secretary that so far as I was personally concerned I saw no objection whatever to any arrangement of the kind, that I should not hesitate to state this impression to Her Majesty's Government, and that when making my report to Lord Granville, his Excel- lency might count upon my cordial advocacy of the proposition,

The Grand Secretary has further put the question whether, in the event of the Government of India agreeing to any arrangement under which the taxation of the opium trade would be exclusively left in the hands of India and China for thirty years, this arrangement might not be set aside a few years hence by a successor of the present Viceroy of India? Should any arrangement of the kind indicated be agreed to, it will become, I présume, the subject of a Convention of some sort between the Governments of England and China, and I trust that it is not necessary to assure your Imperial Highness that conditions agreed to by Her Majesty's Government, no matter in what form, are certain to be faithfully abided by.

I renew, &c. (Signed)

THOMAS FRANCIS WADE.

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