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of opium taxation, whether in conference with your Excellency or with other Ministers of the Tsung-li Yamên, is greatly at variance with my own recollection of what was said by me.

I have from the first declared my readiness to recommend Her Majesty's Government to acquiesce in any measure that would secure to the Government of China such revenue upon the sale of foreign opium as appeared to be but reasonable in amount. If the amount proposed appeared to me unreasonable, I was prepared, I said, to report it, but not to recommend its approval. The amounts respectively named by your Excellency and by the Grand Secretary Li, appeared to me on various grounds beyond what it was reasonable on the part of China to demand. I was pressed to say what I thought would be reasonable, but I declined. There is, nevertheless, an allusion in the Memorial attri- buted to your Excellency, to a "subsequent proposition" of mine that the maximum charge on opium should be 80 taels per picul. I made no proposition to that effect, but when in reply to my question regarding the li-kin revenue on foreign opium that the Chinese Government considered itself entitled to, I was informed by the Ministers present that the estimated total was 6,000,000 taels a-year, but that the whole of this, it was certain, was not collected, and that the cost of collecting so much as was collected was something like 10 per cent. upon the collection, I certainly did attempt to demonstrate that taking the opium import of a certain year as a standard, a uniform rate of 80 taels per picul, that is to say the Tariff rate of 30 taels, plus 50 taels li-kin, if fairly collected, would add con- siderably to the revenue upon opium now received by the Chinese Exchequer.

I am unable throughout the months that have been devoted to discussion of this question to recall a single utterance of mine that may be fairly held to expose me to the charge of shifting my ground, or whatever else may be the offence implied by the expression "fan fu." The personal reflections ou myself, however, contained in the Memorial are, after all, but of secondary importance. What is more significant is this, that your Excellency, having assumed special charge of the question of opium taxation, should have so imperfectly appreciated the attitude of a foreign representative, a clear understanding with whom is almost indispensable to the security of the opium revenue, and who has throughout shown himself anxious to secure that revenue to China. The appearance of this Memorial in the "Shen Pao " has been of no advantage to any one, but it has naturally alarmed those connected with the opium traffic, and its first probable effect will be the stimulation. of a contraband trade, I cannot doubt to the detriment of

THOMAS FRANCIS WADE.

revenue.

(Translation.)

(Signed)

Inclosure 3 in No. 79.

Grand Secretary Tso to Sir T. Wade,

TSO TSUNG-TANG presents his compliments.

August 1, 1881.

The Grand Secretary received on the 24th ultimo Sir T. Wade's letter referring to a Memorial on the subject of stringent restrictions on opium, a copy of which he had read in the Shangbae "Shën Pao” newspaper. Sir T. Wade denies that he made any pro- position, as therein stated, to the effect that the charge on opium should be fixed at 80 taels per chest, or that anything that he said in the course of the conferences on increasing the duty on opium exposed him to the charge of vacillation. Sir Thomas Wade further stated that the appearance of this Memorial in the "Shên Pao" was of no advantage to any one, and its effect would be prejudicial to the national revenue.

The Grand Secretary is given to understand that the Shanghae "Shen Pao " prints and publishes at once any news it obtains, and that there has never been any supervision or restriction placed upon it, or any regard paid to the importance of the news.

The Memorial in question by the Grand Secretary on the subject of stringent restrictions on opium and advocating an increase of the li-kin and customs duty upon it was circulated by His Majesty's orders among all the provincial Customs authorities. There is no means of discovering from what quarter the "Shen Pao" office obtained a copy, and as the Memorial was not secret there is no occasion to make inquiries for the purpose or to suppress its issue.

In view of the length of time that opium has banefully flooded this country, the Grand Secretary proposed to Sir T. Wade, when he received him at the Yamên, that as a preliminary measure the duties and li-kin upon it should be increased, in the expecta- tion that on its price hecoming dearer, opium-smokers would in some measure abstain

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from it on account of expense, and that in this way some real success might gradually be obtained.

Sir T, Wade considered that, on account of the large evasion of duties in the interior, it would be far better to increase the customs duty and do away with the li-kin.

The Grand Secretary assented to this view, and proposed to follow the rule adopted by foreign countries of levying duties on exports in proportion to their value, and the rule adopted by Great Britain of placing a double duty on luxurics for the table, and levy the exceedingly light import duty of 150 taels per chest.

The Grand Secretary Li was in Peking at the time on business, and came with the writer to discuss the question at the Tsung-li Yamên with Sir T. Wade,

Sir T. Wade maintained that to raise the duty to 150 taels was unreasonable, and declared that he could not give his consent to the proposal. At the same time, he broached the idea of raising the duty without doing away with the li-kin, and at first consented to the addition of 5 taels per chest, then to 10 taels, and after a long discussion, to 15 taels as the maximum. The Grand Secretary found it hard to reconcile himself to this proposal. Sir T. Wade then said that any additional duty that China might see fit to impose on opium after it had left the port was a matter that did not concern him at all. Thus, his first proposition was to deal with the two duties together, and his later proposition was to deal with them separately. As both Sir T. Wade and the Grand Secretary had business that required their attention, neither was able to bring the other over to his views.

On subsequent occasions, when Li Chung-tang and the Ministers of the Board of Foreign Affairs received Sir T. Wade, the writer was not present, but he heard that Sir T. Wade reverted to his first proposition of increasing the duty and doing away with li-kin, and, with regard to the increase in duty, consented to a maximum charge of only 80 taels per chest, and said that, to confirm the imposition of this charge, he would have to wait for a reply from the British Government and the Indian merchants.

The Grand Secretary was aware that Sir T. Wade, from his position in Peking, at a great distance from his own Government and India, and from the time required for the interchange of telegrams, was able to act slowly. The Grand Secretary, in the post which he fills unworthily in the Grand Council, on the days on which he is on duty, awaits His Majesty's summons, and when business has to be transacted is expected to place the true facts before His Majesty without delay.

Further, the increase of the duty and li-kin on opium is the most important point of the present question. Now, Sir T. Wade first was in favour of increased duty and no li-kin, then proposed to deal with the duty and to leave li-kin alone, and afterwards pro- posed to raise the duty and not to do away with hi-kin. With regard to the amount by which the duty was to be raised, Sir T. Wade, in the hearing of the Grand Secretary himself, assented to 5, 10, and 15 taels, and afterwards, while discussing wit Li Chung-tang and the Ministers of the Board of Foreign Affairs an increased duty and no li-kin, mentioned 80 taels. This was only verbally, it is truc, and there is no complete proof of the fact, but from first to last the discussions have been vague and without a fixed policy; how, then, could the Grand Secretary have approached His Majesty with this language?

Finally, for the settlement of this question, it is necessary that Sir T. Wade should ask for the instructions of his Government, and desire the Indian merchants to consider the matter and come to a determination upon it. The Grand Secretary, therefore, has nothing to which he can give or deny his consent. If he fails to represent the real facts, he is not doing his duty to his country or his Sovereign. How can he escape punishment?

Will Sir T. Wade try to place himself in the Grand Secretary's place, and consider whether it can be otherwise?

As to the present scheme, when answers have been received from all the Superinten. dents of Customs, His Majesty will decide and act on such Memorial as meets his approval, and thus prevent the discussion of a variety of opposite views. The points that His Majesty considers as of chief importance are the moral improvement and the protection of the people. The national revenue is not his sole consideration, though to add to and not diminish it is of course one of the objects that he has in view.

Sir T. Wade alludes to the injury that was inevitable (to the revenue, from the publi- cation of the Memorial). The Grand Secretary appreciates the depth of kindly feeling shown towards him, and when he learns of any injury will not fail, in acknowledgment of such great good-will, to represent it to His Majesty.

A special reply.

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