CO129-337 - Public Offices & Foreign Office - 1906 — Page 610

RECEIVED

SECTION 1.

(REGD. 1 SEP 1906)

No. 1.

601

Mr. Carnegie to Sir Edward Grey.-(Received August 13.)

(No. 274.) Sir,

WITH reference to Sir E. Satow's despatch No. 84 of the 27th February last,

Peking, June 22, 1906.

relative to the new taxation of opium imposed by the Viceroy of Canton, I have the honour to inform you that a Petition was received at His Majesty's Legation last April from Chinese merchants engaged in the opium trade at Canton, who represented that the action of the Viceroy seriously affected their business, and requested the intervention of His Majesty's Minister in order to secure the abolition of the levy. This Petition was communicated to His Majesty's Consul-General at Canton, who was instructed to report how matters stood.

In the beginning of May I received a despatch from His Majesty's Acting Consul at Kiungchow reporting the introduction of a tax on opium similar to that instituted at Canton. I thereupon instructed His Majesty's Consul-General at Canton to repeat to the Viceroy what his predecessor, Mr. Scott, had already urged, namely, that no new taxation of opium should be introduced without the sanction of His Majesty's Minister and the Wai-wu Pu (see inclosure in despatch referred to above). Meanwhile another Petition, similar to the one already mentioned—it is not necessary to trouble you with copies of these documents—was addressed to this Legation by various Chinese representatives of certain opium firms in Hong Kong, which was also referred to His Majesty's Consul-General, who was again requested to report on the matter.

I shortly afterwards received Mr. Mansfield's despatch No. 27 of the 9th May, copy inclosed, which contains information respecting the taxation of native opium, and states that, owing to the tax, many dealers were closing their shops, but that the Viceroy did not appear inclined to relent. The next day I learnt from His Majesty's Acting Consul at Swatow that it was intended to impose the same levy at that port. I accordingly had the honour to dispatch to you my telegram No. 112 of the 28th May, which I ventured to request your views as to whether I should address the Chinese Government on the subject, pointing out that if the taxation became firmly established in several places it would become more difficult to get it abolished. Your telegram No. 106 informed me that the matter was under consideration.

I have now received a further despatch from His Majesty's Consul-General at Canton, of which copy is inclosed. Mr. Mansfield states that he addressed the Viceroy in the sense of my instructions, and incloses the reply from his Excellency, who declined to discontinue the tax. Mr. Mansfield points out that in neither of the petitions referred to him was there any charge against the Viceroy of discriminating to the prejudice of Indian opium, that the Viceroy's contention that he was within his treaty rights in levying this tax appeared to be borne out by clause 5 of the Additional Article, and that the question whether the 4 per cent. ad valorem tax was levied on the market price of Indian opium or on that price less the commuted li-kin of 80 taels per picul was of no great importance, seeing that native opium was as heavily taxed as the Indian drug; that this is the case seems open to doubt, in view of the statement contained in the last paragraph of Mr. Mansfield's despatch No. 27.

Mr. Mansfield concludes by saying that the trade may possibly suffer and the consumption of opium diminish, which is an eventuality which can scarcely be deplored.

I have, &c.

(Signed) LANCELOT D. CARNEGIE.

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