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such establishments infringe the stipulations of Article V of the Nanking Treaty with Great Britain and Article XIV of the Tien-tsin Treaty with France, by which it was laid down that British merchants are permitted to carry on their mercantile pursuits with whatever persons they please, and that no privileged commercial companies or combina- tions organized with the object of exercising a monopoly in trade should be permitted to be established in China.
In the opinion of His Majesty's Government these Government offices for monopo- lizing the trade in opium involve a direct infraction of the above-mentioned Treaty stipulations. I am instructed, therefore, to call the attention of the Chinese Govern- ment to this question, and to point out the danger of allowing provincial authorities to deal independently with a question which is now under the consideration of the Chinese and British Governments.
I avail, &c.
(No. 18.) Sir,
(Signed)
Inclosure 2 in No. 1.
Consul Ker to Sir J. Jordan.
J. N. JORDAN,
Nanking, August 1, 1907.
IN continuation of my despatch No. 17 of the 24th ultimo, on the subject of the proposed Government opium monopoly, I have the honour to inclose herewith copy and précis of the Regulations now drawn up to replace the original proposals of the Revenue Department. They have not yet been published.
The Viceroy's approval seems to be given in the same tentative manner as in the case of the former proposals, and it is by no means certain that the scheme will be found capable of being carried into effect.
I am sending copy of this despatch and inclosures to Sir Pelham Warren.
Inclosure 3 in No. 1.
I have, &c. (Signed)
W. P. KER.
Nanking Government Opium Monopoly.
Précis of Regulations drawn up by Financial Commissioner and Sun Taotai.--(Communicat d July 29, 1907.)
YUNING Bank to provide 500,000 taels for the establishment of the "Kiangnan Head Office for the Suppression of Opium and for making Provision for the Monopoly of the Sale of Government Prepared Opium."
This Office has three objects: the purchase of raw opium; the sale of prepared opium; the suppression of opium. It is to be established first at Nanking; branches afterwards at Cbinkiang, Chingkiangpu, Hsu-chou, &c. Other places to wait success of Head Office.
2. At all places where there is a Government prepared opium office anti-opium offices are to be established in numbers proportionate to the size of the district. The Nanking Head Office shall lead the way, and take in hand the provision of anti-opium remedies and the licensing of smokers according to the Regulations of the Central Government. Until the licensing of smokers comes into force, the branch prepared opium shops are to report their sales every three days.
3. (This Article has been already translated.)
4. As soon as operations are commenced the raw opium dealers shall have a limited time within which to report their stocks in hand, for purchase by the Government Office. If the stock is very extensive the Government Office can purchase by instalments at market prices. No sales on the premises to be allowed.
All dealers contracting to supply opium to the Government Office must, before buying raw opium of any kind, obtain a pass from the Office specifying the place of purchase and the quality and amount to be purchased. Stations for prevention of smuggling shall be established at certain important points on roads and waterways. For the sake of economy, the existing li-kin stations can be used for this purpose. opium passing such places must be examined and compared with the pass; if in order
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it will then be released; if not, it will be confiscated or a fine imposed. Opium passing from one province to another shall be escorted across the frontier by a messenger from the li-kin station, in accordance with the Hupei Regulations for opium duty,
When the opium arrives it shall be carefully examined by the Government Prepared Opium Office, and a price shall be arranged with reference to existing prices elsewhere and the quality of the opium, provided, on the one hand, that the merchant shall receive a fair profit, and, on the other hand, that he shall not make extortionate demands.
5. This Article dwells on the difficulties of the task and the reasons for its being carried out, nevertheless, by the Government instead of by merchants as at first proposed. A list follows of the titles of the officers to be appointed, with the duties and responsibilities attaching to each,
6. This Article contains regulations for keeping the different qualities apart by using three separated places for storing the raw opium, for boiling it, and for putting the prepared opium into jars; also regulations for stamping of the jars by the proper officials.
7. Regulation of prices of prepared opium. It was originally intended to keep prices moderate for the convenience of users, but, in view of the Imperial legislation and the necessity of discouraging the use of opium, prices must be high. The prices proposed by the Revenue Department are to be tried for one year, but afterwards the sales are to be annually diminished and the prices annually raised with a view to eventual abolition.
8. Each jar of prepared opium is to contain oz. extra (ie., 101⁄2 oz.) to allow for waste in retail selling, thus giving no excuse for adulteration, which will be strictly punished.
9. On account of the unnecessary expenditure that would be entailed by having factories at the branch places, the Nanking Head Office only shall be allowed to boil opium but each branch office shall buy the raw opium required for its own consumption and send it monthly to Nanking to be boiled.
10. At places where a Government office is established all raw opium held by shops or private individuals shall be reported to the office. If in large quantities, the office shall purchase the stock; if in small, a limit of two months shall be allowed during which it may be boiled; but after this period no raw opium can be held. Preventive officers to act in co-operation with the police to enforce this rule. Travellers, however, can carry up to 20 oz. for their own consumption.
11. Investigation to be made into the production of poppy at Hsuchou with view to reduction. The Head Office to send inspectors for this purpose to act in conjunction with the Hanchon local authorities. All intending purchasers from Hsuchou must get a pass from the Hsuchou branch office, specifying amount and destination. Opium purchased without a pass or in excess of the pass shall be confiscated or a fine imposed. These passes are to be collated every three months and sent up to the Head Office. The expenses of this investigation are to be met by a fee of 5 taels on every picul, to be paid by the cultivators, one-fifth of the proceeds to go to the Hsuehou local authorities.
12. Anti-Opium Remedies -The sale of such is to be allowed if the formula is first submitted showing that they contain no opium or morphia. The Head Office will appoint experts to go from time to time and bay such pills for analysis. Shops selling pills found to contain opium shall be closed and a fine imposed.
The above Regulations can be added to as required. The original Regulations of the Revenue Department regarding investigation of consumption, prices, and issue of stamps (ie., Articles 1, 4, and 6 of the original Regulations) are to hold good.
Viceroy's Rescript on above.
In view of Imperial commands the matter must be taken in hand in spite of all difficulties. The Regulations are approved and are to be put in force experimentally. But special precautions must be taken at starting, and attention must be given to particulars not covered by the above or requiring alteration. The officials required for the new Office have been duly appointed. Yangchou, Chinkiang, &c., are to make provision for branch establishments as proposed. The above Regulations will be published by Proclamation; form of this to be settled later. As regards Hsuchon, the proposals are generally approved, but the sanction of the Throne must be obtained before the fee of 5 taels per picul is imposed. A report is also to be submitted to the Governor at Soochow and his rescript obtained.
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