CO129-330 - Public Offices - 1905 — Page 411

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the Chinese Customs authorities shall not be enhanced except at the request of the Government of India; but that Government shall be at liberty to raise or lower the transit due at their discretion. Provided that they shall not raise the transit due to more than 20 rupees per picul, unless the Government of China, after being requested to do so by the Government of India, shall decline to enhance the consolidated duty by an amount to be specified by the Government of India, or shall fail to enhance the duty by the specified amount within a reasonable period after being requested to do so. After the expiry of three years, the consolidated duty leviable by the Chinese Govern- ment shall be fixed for a further period of five years, and shall thereafter be liable to revision at the expiry of each quinquennial period. The rate at which the duty is to be levied shall be decided by the Government of China in consultation with the Govern- ment of India, and the rate shall not be increased during the continuance of the quinquennial period, except at the request of the Government of India. The transit dne leviable by the Government of India may be increased or diminished at their pleasure, subject to the proviso stated above.

9. We see no objection to the proposal that provision should be made for the export of opium from Yunnan to Burmali, for sale and consumption in that province. The Yunnan provincial li-kin, and the consolidated export and re-entry duty, would be payable in respect of such exports.

10. We have the honour to request that we may be kept fully informed of the progress any negotiations which may be entered into in respect of this matter, and

of that we may be consulted before any promises which would bind this Government are made,

We have, &c. (Signed) CURZON.

Inclosure 2 in No. 1.

KITCHENER.

E. F. G. LAW.

A. T. ARUNDEL. DENZIL IBBETSON.

H. E. RICHARDS

Government of Burmah to Government of India.

April 4, 1902.

I AM directed to submit, for the orders of the Government of India, a copy of a latter, dated the 12th February, 1902, from His Britannic Majesty's Congul at Tengyueh, containing a proposal to permit the transit of Yunnan opium in bond across Burmalı viâ Rangoon to China. The proposal, it will be noted, contravenes Article XI of the Burmah-China Frontier and Trade Convention ratified on the 23rd August, 1894. This Government is concerned mainly with the effect which the scheme might might have on the smuggling of opium into Burmah. This illicit trade would be facilitated in two directions:-

1. The opium might be tampered with when in transit through Burmah in bond. Owing to the small bulk of opium and its high value in Barmab, there would be a serious danger of this, and unless costly arrangements were made which practically insured that no such tampering took place, the scheme would add one more to the many ways which now exist for introducing opium into Burmah illicitly.

2. The production of opium on the frontier would be stimulated. This objection might be partly neutralized by the fact that a licit means would be afforded of disposing of the opium, but nevertheless any scheme which encourages the production of opium on the frontier must, in his Honour's opinion, in the long run increase the supply available for illicit import into Burmah and tend to encourage such import. In view of the dangers pointed out above, his Honour the Lieutenant-Governor is not in favour of the scheme.

Inclosure 3 in No. 1.

Consul Litton to Government of Burmah.

404

Tengyuch, February 12, 1902.

I HAVE the honour to address you on the opium trade of West Yünnan, which is a matter of much importance to British merchants who wish to find a market for their goods in West China.

Hitherto the great natural difficulty, apart from the artificial difficulties created by the Chinese officials in the way of trade in this district, has been the absence of a staple export, the sale of which would enable the people to purchase an increased quantity of our wares.

I believe that such an export might be found in opium. I am aware of the law which prohibits the sale and consumption of the drug in Burmah, but I desire to point out that by permitting the transit of Yunnan opium in bond across Burmah via Rangoon to its markets in Canton and Shanghae, great benefit would result to our West China trade. Careful regulations to prevent sale or fraud on route through Burmah would have to be devised, but I believe that if the Burmah Customs authorities would co-operate with the foreign Customs here, no insurmountable difficulty would arise on this point. The present Chinese Customs Regulations under which Chinese opium exported abroad and then reimported to China is taxed at the prohibitive rate of foreign opium, &.c., 110 taels for 13 lbs., and not at the lower rate of native opium, i.e., 60 taels, is another difficulty; but I think that, in view of the desirability of extending West Yünnan trade, the Customs authorities may be disposed to favourably consider a modification of these rules.

It

may be objected that it is contrary to the policy of the Government of India to do anything to encourage Chinese opium, because such a measure would tend to All lessen the sale of the Indian drug, but I submit that this is a fallacious argument. the Yunnan opium that wants to get east to Shanghae and Canton gets there, but the heavy expense of carrying it over long and difficult land routes, combined with the depredations of brigands and tax collectors, leaves but a narrow margin of profit; whereas it is the opinion of the leading merchants here who have approached me on the subject that, if the drug were treated by the Customs authorities on the same footing as opium sent, say, from the Upper to the Lower Yang-tsze, a handsome profit could be made by sending it from here to Rangoon and so by ocean steamers to Hong Kong. A reasonable transit due might be imposed by Burmah, and thus all parties would benefit. Even if the sale of the Indian drug were slightly diminished by the adoption of the measure I now propose (which I do not believe would be case), we should still be gainers, for the people of West Yunnan would be enriched, and would spend their surplus chiefly on our goods.

Opium containing great value in small bulk is a sort of money, the general medium of exchange all over West China. Opium pays for the great bulk of the foreign goods that come up Szechuan and to East and South Yunnan, and to prohibit its tran-it across Burmah seems to be an obsolete measure calculated severely to cripple our West Yünnan trade.

This matter cannot, of course, be settled in a few days. The Viceroy of Yunnan and other Chinese officials would have to be approached, but I should be glad to learn whether the Government of India would be inclined to regard the proposal favourably, if other difficulties in the way of its adoption can be removed.

I

may add that if a legitimate way of disposing of their opium can thus be opened to the Tengyueh merchants the smuggling for illicit consumption in Burmah may be expected largely to decrease.

Inclosure 4 in No. 1.

Government of India to Government of Burmah.

May 6, 1902.

I AM directed to refer to your letter, dated the 4th April, 1902, with which you submit, for the orders of the Government of India, a proposal made by His Britannic Majesty's Consul at Tengyueh to permit the transit of Yunnan opium in bond across Burmah via Rangoon to China.

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