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before the Commission sat by the learned gentleman who represented Hongkong on that Commission; and I was then able to confirm the information he had received about the retail trade in broken chests, viz, that it was about 7,000 odd chests annually. I also approved of the draft Ordinance that was then shown to me, and in which retail sales through the Opium Farmer were allowed. I, however, made a suggestion that the Opium Farmer should not be placed over the importing merchant. That suggestion, I am now glad to see, has been adopted in clause II of the amended Ordinance. Sir, with the modifications referred to I have no doubt the Bill will meet with the approval of all parties concerned—so far as a Bill of this nature can be approved.
THE ACTING CHIEF JUSTICE (Hon. J. Russell)—With your Excellency's permission, I should like to say a few words with regard to this Bill. I understand this is the continued debate of the second reading—that the debate was simply adjourned with a view of seeing whether certain propositions that the hon. member (Hon. C. P. Chater) had laid before the Council would be received by the Chinese Government and Her Majesty's Government. In the memorandum which was placed before the Council by the Acting Governor (Mr. Marsh) when the Bill was laid on the table, it was pointed out that all that I, as Hongkong Commissioner, agreed to do, in connection with the Convention, was to undertake that the Government of Hongkong should submit to this Council an Ordinance for the regulation of the trade in opium subject to conditions therein after set forth being performed by China. The principle of that Bill, as laid before the Council, and which was prepared by myself, but of course with the thorough knowledge and approval of the Government, who had seen and approved my draft—I was acting all along under the immediate instructions of the Governor, as well as under written instructions—the principle of that Bill, I say, was the complete control of raw opium within the Colony.
The Commission when it first met had certain proposals put forward by the Chinese Government as to how smuggling into China was to be prevented. With regard to the smuggling of opium or any other commodity in Hongkong, it has been frequently asserted that the Hongkong Government had nothing to do with it, because this was a free port and smuggling a misnomer. But with reference to opium it was found that smuggling was possible in one respect, even within the Colony, and that the freedom of the port was used against the opium farm. The opium which came in free circulated freely, and large quantities were taken to the other side of the border, boiled and prepared there, and then brought back to the Colony and sold to the damage of the opium farmer's revenue.
Now, the only plan submitted by Sir Robert Hart and Shao Taotai, his colleague, was one which this Government could not accept and one which certainly the mercantile community would have protested against. That plan was the collection, by force of law, of Chinese revenue within the jurisdiction of Hongkong. Shortly, the proposal was that three Chinese-owned hulks should be stationed in the harbour, and that all ships, of whatever nationality, coming into the harbour should proceed alongside one or other of these hulks and there discharge all opium which was to go to the south of China. Through ships with opium were to take harbour letters from the hulk keepers stating the quantity on board and deliver such letter and opium to the Commissioner at the treaty port.
It was proposed that all opium landed in Hongkong should pay duty in the Customs whether it was consumed in the Colony or underwent the process of preparation before shipment to British Colonies, the United States, or elsewhere. In other words, China proposed to tax opium whether consumed in Hongkong or re-exported.
The report for 1882, after giving the net importation into each port states:-
The sorts imported and the estimated values are shown in the table below. All the opium imported into China reaches it through Hongkong. As the quantity consumed there is comparatively trifling, the quantity brought into China in native vessels and which consequently does not appear in these returns must be nearly equal to the quantity by which the Hongkong importation exceeds the entries at the treaty ports. A deduction must be made for the amount shipped to the United States for the use of Chinese there.
The total amount that came into Hongkong in 1882 was 85,565 piculs. The total quantity left in Hongkong, that is to say the quantity that did not pass through Sir Robert Hart's hands, in chests amounted to 19,856. Now, everybody knows that Bengal opium weighs 13 piculs per chest, so, therefore, the total number of chests that did not pass through Sir Robert Hart's hands was 16,000 or 17,000. How did we account for that balance? It has been shown by statistics supplied by the Hongkong, Canton, and Macao Steamboat Company that in 1885, 9,145 chests went straight to Macao. That, therefore, must be deducted from the quantity that could possibly be retailed in Hongkong, also what was shipped to Manila, Tonquin, America, and other places.
That there was a retail trade was undoubted, and I pointed out to the Commission that it was necessary, if we possibly could, to devise some means by which this retail trade should be preserved in the Colony. There had been nothing but the obnoxious bulk plan put forward, and asing rejected it, I felt that after the report of the Smuggling Commission of 1883, China had a grievance against this Colony, as this Colony had against China, and that we ought to do what we could to provide a remedy without detriment to ourselves. Was that possible? It seemed to me it was.
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the control of broken chests, that is to say, that Opium should be sold, unless he had the complete monopoly of sale of quantities less than one chest, and an offer was made that if this were assented to, an increase would be made in the rent of the farm. And why? Because, he said if he had complete control of the trade in broken chests, he could increase his price, smuggling from outside would cease, and also the illegal boiling that was done in the Colony.
But the difficulty was that if the Government had attempted to do anything, the restriction on the opium trade here would have sent a large portion of it to Macao. In 1882 the opium farmer who came from Saigon had been got out of the place by the old farmers, and instead of paying the Government $210,000, as before, they offered $132,000. The Government then took the matter into its own hands and granted licences direct to the various dealers under the Ordinance of 1858. The increased revenue derived from that experiment was very considerable.
Under the management of Mr. Seth, who worked the matter with great care, the Government got, in addition to all expenses, over 100,000 dollars above what they had been offered. But there was an objection raised. It came from home. The home Government saw an objection to the close relation between the Government and the sale of the prepared drug, as it had to superintend its preparation, and the home Government preferred that the matter should be in the hands of a farmer if possible.
I happened, at that time, to be Colonial Treasurer, and I drafted an Ordinance taken from the old Ordinance of 1845 or 1846, giving the Government permission to grant licences for the sale of raw opium as is proposed now. There was a small revenue to be derived from that doubt. I saw the leading members of the importing trade and they saw no objection to it in the first instance, but very soon some of the Chinese dealers, some of whom profited largely by smuggling, raised a trouble and the Government did not proceed with the Bill.
There was nothing done: Macao again stood in the way. Quite recently, the present Opium Farmer has also been asking the Government for complete control over the trade in broken chests, and an Ordinance was actually published in the Gazette in April of last year—a Gazette subsequently cancelled at my request. It was proposed, that no one should sell opium in quantities of less than one chest except the Opium Farmer and his licensees, and it was arranged that no licensee should pay any fee unless the Governor in Council otherwise ordered.
This came out rather inopportunely, because I had hoped to produce this control as the solution for the Chinese Government of the blockade question and the smuggling of opium which led to it. But here it is.
It may be asked why it was altered. Well, it was simply in this way. While Sir Robert Hart was over at Macao negotiating, certain papers and blue books arrived from home, which had been recommended by Sir John Walsham, who had a large experience while at Madrid of the troubles between the Spanish Government and the British Government with reference to the smuggling of tobacco from Gibraltar.
Special officers had been sent out from home to see how that smuggling could be stopped, and it was important to see what they reported. The reasons that were urged by Messrs. Chester and Barton, the officials sent out, were cogent and strong as showing that so long as you allowed small quantities to circulate freely it was impossible to prevent smuggling, and they proposed that tobacco should not be allowed to be exported in less quantities than 50 lbs. This seemed to them perfectly fatal to smuggling.
Now, it was the duty of this Government, if it carried out the terms of the Chefoo Convention and the Additional Article, to help to devise some means by which Hongkong should not be made ...
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before the Commission sat by the learned | pood we should bring in an Ordinance pro- gentleman who represented Hongkong on that riding that a product of India consumed in a Commission; and I was then able to confirm the British Colony should be taxed by the Empire information he had received about the retail of China. That of course could not be accepted. trade in broken chests, viz, that it was about There was a modification then proposed by Sir 7.000 odd chests annually. I also approved of Robert Hart, which was that we should first the draft Ordinance that was thn shown to me, allow them to collect the revenus on all opium and in which retail sales through the Opium landed here, and that then the Governinent Farter were allowed. I, however, made a sugges should send in returns, showing how much had tion that the Opium Farmer should not be placed been consumed in the Colony and how much had over the importing merchant. That suggestion, been exported elsewhere, in which case he was I am now glad to see, bas been adopted in clanse prepared to return the duty he had collectul H of the amended Ordinauce. Sir, with the on that quantity. That, we could not agres to. modificatious referred to I have no doubt the Bill No other plan being forthcoming, as Sir Robert will meet with the approval of all parties coucern- Bart himself has recorded in a memorandum of . so far as a Bill of this nature can be approved the 14th July, I submitted a plan I had thought ont and had placed before the Government. That THE ACTING CHIEF JUSTICE (Hon. J. plan was based on the principle of taking note of Russell-With your Excellency's permission and registering every chost of opium that come I I should like to say a few words with regard into the Colony and every chest that went out. to this Bill. I understand this is the con- had, of course, taken every opportunity of making tinned debate of the gseond reading-that the myself acquainted with the details of the opium debate was simply adjourned with a view trade, and I had, as my hon. friend (Hon. O. P. of seeing whether cortain propositions that Chater) has said, obtained through him certain in- the hon. member (Hon. C. P. Chater) had laid formation from the large importing houses bere. before the Council would be received by the Chi- Que matter referred to before in Council was that nese Government and Her Majesty's Govern- although 36,000 chests of opium passed into the ment. In the memorandum which was placed hands of the Chinese in the Colony, nevertheless before the Council by the Acting Governor (Mr. 55 per cent. of that Bengal drug was shipped by Marsh) when the Bill was laid on the table, it was them by steamers and of Malwa 80 per cont. was pointed out that all that I, as Hongkong Commis-shipped by steamers to open ports. Consequently sioner, agreed to do, in connection with the Con- the 36.000 chests of opium put forward as the retail vention, was to undertake that the Government trade carried on in Hongkong had to be roduced of Hongkong should subunit to this Conueil an 55 per cent. of Bengal and 8 per cent of Malwa, Ordinance for the regulation of the trade in as this was shipped by Chinese in chests. A great opinu subject to conditions therein after set deal was made before this Council, and the Cham- forth being performed by China. The prin ber of Commerce was led to think that an en-
turns. The report for 1882, after giving the net importation into each port states:-
The sorts imported and the estimated values are shewn in the table below. All the opium imported into China reaches it through Hongkong. As the quantity consumed there is comparatively triffing the which consequently does not appear in these returns amount brought into China in native vessels und must be nearly equal to the quantity by which the Hongkong importation exceeds the entries at the A deduction must be made for the Treaty parts. amount shipped to the United States for the use of
Chinese there.
eiple of that Bill, as laid before the Coan-ormous retail trade of 35,000 chests would be ell, and which was prepared by myself, bit of destroyed. But no one took the trouble to look course with the thorough knowledge and ap-up Sir Robert Hart's returns to soo if there was proval of the Government, who had seen and ap- such a retail trade. I have here one of the re- proved my draft-T was acting all along under the immediate instructions of the Governor, as well as under written instructions-the principle of that Bill, I suy, was the complete control of raw epium within the Colony. The Commission when it first met bad certain proposa s put forward by the Chinese Government as to how smuggling into China was to be prevented. With regard to the smuggling of ouium or any other commodity in Hongkong, it has been frequently asserted that the Hongkong Government bad nothing to do with it, because this was a free port and smug- gling a misnomer. But with reference to opium He then gives those amounts. The total amount it was found that smoggling was possible in one that came into Hongkong in 1882 was 85,565 respect, even within the Colony, and that picals. The total quantity left in Hongkong, the freedom of the port was used against the that is to say the quantity that did not pass opium farm. The opium which came in free through his hands, in chests amounted to circulated freely, and large quantities were taken | 19,856. Now, everybody knows that Bengal to the other side of the border, boiled and pre-opium weighs 13 picals per chest, so, therefore, pared thore, and theu brought back to the Colony the total number of chests that did not pass and sold to the damage of the opium farmer's re- through Sir Robert Hart's hands was 16,000 or venue. Now, the only plan submitted by Sir Ro- 17,000. How did we account for that balance ? bert Hart and Shao Taotai, his colleague, was one It has been shown by statistics supplied by which this Government could not accept and one the Hongkong, Cauton, and Macao Steam- which certainly the mercantile community would boat Company that in 1885. 9,145 chests went hava protested against That plan was the collec-straight to Macao. That, therefore must be tion. by force of law, of Chinese revenue within deducted from the quantity that could possibly the jurisdiction of Hongkong. Shortly, the probe retailed in Hongkong, also what was shipped posal was that three Chinese-owned hulks should to Manila, Tonquin, America, and other places. be stationed in the harbour, and that all That there was a retail trade was undoubted, ships, of whatever nationality, coming into aud I pointed out to the Commission that it was the harbour should proceed alongside one or necessary. if we possibly could, to devise some other of these halks and there discharge means by which this retail trade should be pre- all opium which was to go to the south of served in the Colony. There had been nothing China. Through ships with opium were to take but the obnoxious bulk plan put forward, aud har letters from the halk keepers stating the quasing rejected it, I felt that after the roport of the tity on board and deliver such letter and opium Sanggling Commission of 1883, China had a to the ommissioner at the treaty port. It was proposed t at all opium landed in Hong- kong should pay duty in the Customs whether it was cousumod in the Colony or under- went the process of preparation before ship went to British Colonies, the United States, in 1879 had a memorial sent in to it by the Boil- elsewhere. In other words, hina pro-ed Opium Farmer asking that he should have
or
grievance against this Colony, as this Colony had against China, and that we ought to do what we could to provide a remedy without detriment to ourselves. Was that possible it seemed to me it was. The Government here
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the control of broken chests, that is to say, that years. In Singapore the whole monopoly is no Opium should be sold, unless he had the com- in the hands of the Opium Farmers, but in the plete monopoly of sale of quantities less than one Bill I prepared I extended the sale to the cbest, and an offer was made that if this were as. Opiam Farmer and his lioonsees, with a view sented to, an increase would be made in the of his granting licenses to people in rent of the farm. And why? Becanse, be said the trade so as not to deprive them of if he had somplete control of the trade in broken the business they bad been carrying on for chests, he could increase his price, smuggling from a long time. But it was in view of what outside would cease.andalso the illegal boiling that was done in Singapore. The Opium Farmer wenton in the Colony. But the difficulty was that there, when any opium is to be taken away, watches if the Government had attempted to do anything, the shipping of it. When he sells opinu. he the restriction on the opium trade here would sees it on board the ship, and if he has any sus- have sent a large portion of it to Macao. In 1882 | picion as to what the ship is going to do, if the opium farmer who came from Saigon had there is any danger of the vessel bringing the been got out of the place by the old farmers, and opium back, he sends a steam launch to escort it instead of paying the Government $210,000, as for a long distance. And that is what the Farmer before. they offered $132,000. The Government proposed to do here. The Opium Farmer him. than took the matter into its own hands and self, first of all. by granting the licences to the granted licences direct to the rarions dealers un-licensees would have the absolute control of these der the Ordinance of 1858. The increased revenue people as his own porninees and it was thought that was derived from that experiment was very he would take guarantees that opium was not considerable. Under the management of Mr. boiled against himself. The Opium Farmer Seth, who worked the matter with great care, the might be the greatest smuggler himself, it was Government got, in addition to all expenses, over suid. but the Government would have taken care 100,000 dollars above what they had been offered. that he should not connive in any way at smagg But there was an objection raised. It came ling. The way he would have protected himself pro- from home. The home Government saw an ob- bably would have been that he would have arrang jection to the close relation between the Governed with his licensees that the purchasers should ment and the sale of the prepared drug, as it bad do what they had been doing for many years. to superintend its preparation, and the home Go-arm themselves with a duty paid certificate be vernment preferred that the matter should be in fore they removed the opium from the shop A the hands of a farmer if possible. I happened a matter of fact the opium that has left ayseif, at that time, to bề Colonial Treasurer, here and gone honestly to China has been cover- and I drafted an Ordinance taken from the ed by a duty-paid certificate before it left the old Ordinance of 1845 or 1846, giving the shop. That was an option and convenienca uo Government permission to grant licences for doubt to bonest dealers. If the people who the sale of raw opiam as is proposed now. There purchased the opium had paid beforehand a was a small revenue to be derived from that duty of 110 tals per picul, the Farmor would no doubt. Isaw the leading members of the import know it was very improbable they would boil it ing trade and they saw no objection to it in the for sale in this colony or elsewhere as against first instance, but very soon some of the Chinese ¦ bim. On 3rd July I placed before the Com- dealers, some of whom profited largely by smug mission my scheme as it at present is proposed to gling, raiseda tronkle and the (4overnmeut did not make it, only the Opium Farmer granting retail proceed with the Bill. There was nothing done: liceuses instead of the Government. I pointed Macaoagain stood in the way. Quite recently, the out of course that we could not do anything unless present Opinin Farin r has also been asking the Macao did the same, and that if Sir Robert Hart Government for complete control over the trade put himself in communication with the Macan in broken chests, and an Ordinance was actaully Government, the Government here would explain published in the Gazette in April of last year fully what they would do and why they were do- a Gazette subsequently cancelled at my request. ing it. He accepted that and on 14th July he It was proposed, that no one should sell opium stated: We communicated the proposal that in quantities of less than oue chest except the you had been making so far as we knew it to Opium Farmer and his heonsees, and it was ar- Peking by telegraph, and received replies saying ranged that no licensee should pay any fee that the Government approved of a settlement unless the Governor in Council otherwise order of that kind." Shortly afterwards, in July, Sir This came out rather inopportunrly, be. | Robert Hart went to Macao. I had the Ordin- canse I bad hoped to produce this control as ance prepared and it is printed in appendix A of my the solution for the Chinese Government of the confidential report. His Honour roferred to the blockade question and the smuggling of opium príncipal changes mado in that draft, as the cut- which led to it. But here it is. dated 29th ting out of the Opium Farmer as the granter of April, 1858. and this was brought forward by the licenses and making it the Coloufal reasurer.] the Opium Farmer because he felt he was It may be asked why it was altered. Well, it was not able to meet the smuggling carried on simply in this way. While Sir Robert Hart was against him. When, as i say, we could not over at Macao uegotiating, certain papers and acoupt the proposal of the Chinese Govern. blue books arrived from homa, which had ment, I submitted the plan by maus of been recommended by Sir John Walsham. which there would be a control over the sale who had a large experience while at Ma- of the raw opium. but I pe posed to work it by drid of the troubles between the Spanish porting it in the hands of the Opium Farmer. : Government and the ritish Government The objection that had been raised before, with with reference to the smoggling of tobac reference to the Government's connection with co from Gibraltar. Special officers had been
ed.
the direct sale of boiled opium, it seemed to me sent out from home to see how that smuggling would be gotover by pining power in the hands of could be stopped, and it was important to see the Opium Farmer and allowing him to licence what they reported. The reasons that were urged people to sell raw opium as until recently be by Messrs. Choster and Barton, the officials sent licenced people to prepare opium. The conse-out, were cogent and strong as showing that se quence was I drafted an Ordinance on that plan. long as you alloweri small quantities to circulate The proposal made in the first instance was freely it was impossib'eto prevent smuggling, and that opium coming into the colony shonld be re- ported and no quantities less than one chest should be sold except by the Opiams Farmor or licensees and that he should do the whole of the revenue work in his own intereste, Now, the whole of this scheme was based on what has existed in Singapore for more than ten
they proposed that tobacco should not be allowed to be exported in less quantities than 50 lbs This seemed tothom perfectly fatal to smuggling Now, it was the duty of this Government if it carried out the terms of the Chefoo Convention and the Additional Article te help to devise some means by which Hongkong should not be made
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