CO129-337 - Public Offices & Foreign Office - 1906 — Page 611

602

(No. 27.) Sir,

Consul-General Pawong

Canton, May 9, 1906.

I HAVE the honour to acknowledge Sir Ernest Satow's No. 6 of the 27th April, inquiring if I have received a Petition from the Tung Fu Tang relative to the tax on boiled opium, and calling for a report on the matter.

Consul-General Scott, I find, received a Petition of the same tenor as that addressed to you. His reply was that he had already reported the matter to the Legation. His Report, No. 6 of the 31st January last, seems to contain all obtainable information. The situation has changed little since. The principal boiled opium dealers have been forced by the Viceroy to farm the tax, or rather to pay a lump sum and collect as best they can. They have lately petitioned the Viceroy that they are unable to enforce the tax, and that many dealers are closing their shops. He, however, does not appear inclined to relent.

The attempt made in 1902 to increase the duty on raw opium by levying on it a so-called boiled opium tax, on the basis that a given bulk of raw opium represented (I think) double the bulk of prepared opium, was so obviously a breach of the Additional Article of the Chefoo Convention that it could not be enforced. The present boiling tax on the face of it appears to affect native and foreign opium alike, and should not affect one more than the other, premising, of course, that the taxation on native raw opium is as heavy as that on the imported drug.

On this latter point the Commissioner of Customs informs me that the taxation on native opium is not uniform as regards inland dues, but as far as Yunnan and Szechuan opium are concerned the duty is 78 Haikwan taels per picul (i.e., 60 Haikwan taels plus a 30 per cent. increase in 1900).

Besides this, in the latter half of 1905 an additional consolidated tax of 52 Haikwan taels per picul was imposed. The evidence is contradictory as to whether this tax is levied on all native opium or only on the steamer-borne drug.

(No. 33.) Sir,

I have, &c. (Signed) R. W. MANSFIELD.

Inclosure 2 in No. 1.

Consul-General Mansfield to Mr. Carnegie.

Canton, June 7, 1906.

I HAVE the honour to acknowledge receipt of your despatch No. 10 of the 21 ultimo, forwarding copy and translation of a further Petition respecting the additional taxation on opium in Canton.

You will now have received my Report No. 27 of the 9th ultimo, sent in reply to Sir Ernest Satow's No. 6 of the 27th April, and I have little more to add.

The present method of farming is objectionable, but I am informed that a year hence, when the farm has ascertained the consumption and classified the shops, the Provincial Government proposes to take it over and collect the tax itself.

I have, &c. (Signed) R. W. MANSFIELD.

(Translation.)

Inclosure 3 in No. 1.

Viceroy of Canton to Consul-General Mansfield.

June 4, 1906.

I HAVE the honour to acknowledge the receipt of your despatch to the effect that His Majesty's Minister has been notified by His Majesty's Consul at Kiungchow of the extension to that port of the tax on prepared opium, and has instructed you to inform that no such tax should come into force until the question has been properly discussed by His Majesty's Minister and the Wai-wu Pu.

In reply, I have the honour to observe that the new scheme requires all prepared opium shops to take out licences, for which "mark fees" are levied, and is in no sense within the terms of the Chefoo Convention tax on unbroken packages of the raw drug. It does not therefore, in my opinion, ...

Some time ago I received a despatch from your predecessor on the subject of the production of boiled opium licences in Canton, and, in reply, I availed myself of the opportunity to lay my views on the subject clearly before him. The Kiungchow tax is essentially the same as that to which Mr. Scott took exception, and I regret that I did not see my way to give instructions that it should be discontinued.

In accordance with the request contained in your despatch No. 8 of the 7th instant regarding the imposition of the boiled opium tax at Kiungchow, I repeated to the Viceroy that no tax on prepared opium should be introduced without the sanction of His Majesty's Minister and the Wai-wu Pu. I have the honour to inclose copy and translation of his reply.

From neither of the Petitions which you have received do I gather that there is any charge against the Viceroy of discriminating to the prejudice of Indian opium, and his contention that he is within Treaty rights in levying this tax on prepared opium appears to me borne out by clause 5 of the Additional Article of the Chefoo Convention. The only point which seems at all open to question is whether the 4 per cent. ad valorem is levied on the market price of Indian opium or on that price less 80 taels a chest, the commuted likin levied by the Maritime Customs under the Additional Article. Even this, however, does not appear a serious matter now that native opium is equally heavily taxed with the Indian drug. I understand that the tax is levied in a fixed lump sum from each opium shop, based on its average monthly boiling.

That the trade generally will suffer is possible, and also that the consumption of opium generally may diminish, but the latter result could scarcely be deplored. Foreign opium, however, being a luxury for the wealthier classes, would be less affected than the cheap native drug used by the masses.

I avail, &c.