purchase the specified amount, and no other quantity than that specified in the licence. The purchaser has to hand over to the opium shop one copy of the licence on purchasing, and retains the other himself. Purchasers with a licence are subject to arrest and punishment.
We contend that the Government of China having, by Articles 5 and 10 of the British Treaty of Nanking, 1842, expressly agreed to abolish the practice named in Article 5 of the Treaty, and having agreed to---
"Permit British merchants to carry on their mercantile transactions with whatever persons they please,"
it is a gross abuse of this Treaty if the provincial authorities of the Two Kwongs are allowed to carry into effect the enactments contained in the notification above referred to. It is obvious that if clauses 1, 2, and 3 are carried into effect, the result will be that a certain number of native establishments selling raw and prepared opium will be ascertained, registered, and licensed, and this will curtail the sale of raw opium, and only the native establishments registered and licensed will be competent to purchase raw opium from the British vendor, and whether the purchase by the native opium shop be made direct or through an agent, the result will be the same. In effect, the British merchant will have his trade cut down to the limits of those who are permitted by the provincial authorities of the Two Kwongs to trade with him. Such a monopoly would prevent other dealers from participating in the opium trade, thus destroying healthy competition, and thereby crippling business and causing a heavy loss to importers, who will be at the mercy of the few native shops who hold licences authorizing them to purchase raw opium. Holders of licences would be able to combine to dictate purchasing prices, feeling confident of their position as monopolists in the trade.
We submit that the scheme is illogical, and is contrary to Treaty, and is illegal.
With regard to clause 4, viz., "that after ascertainment and registration of the number of shops in the Province of the Two Kwongs no new opium shops doing business in the buying and selling of raw and prepared opium may be established," the result of this clause will be that a monopoly will be created amongst a certain number of existing opium shops, which shops will, as time goes on, decrease in number by either (a) retirement from business; (b) seizure and closure by the authorities of shops for an infringement or alleged infringement of the law; (c) the purchase by capitalists of the shops and of the licences.
In the course of time, therefore, the sale of raw opium will be in the hands of a few, thus creating a monopoly. In this regard we would point out that it would be obviously difficult for a native shop to judge whether or not a licence was a genuine licence. If a licence presented by a purchaser is found to be false, the proprietor of the opium shop is liable to have his shop seized and shut up, and he would sustain the loss of his entire capital through perhaps no fault of his own. This would open the door to fraud, inasmuch as false charges could be trumped up against opium shops in order to get them seized and closed in order to obtain the forfeiture of their capital to the Chinese authorities. This, again, will ultimately result in the authorities farming the licensed shops out to those capable of paying heavy sums for them over and above the ordinary licence fees.
If these conditions are to prevail, native merchants will be chary of entering into the business, and the trade will consequently get into the hands of a few traders. We predict that in a short space of time the provincial authorities, either by closing the existing shops or by farming them out to a few, will get the whole trade into their own hands, thus creating a monopoly, which is expressly contrary to the Treaty of Nanking.
With regard to clause 6, on each and every occasion that an individual wishes to purchase opium, this burdensome procedure has to be carried out, and on each occasion the purchaser has to pay a licence fee. This will of necessity hamper trade and prevent freedom in the buying and selling of raw opium.
We contend that all the regulations, as we have in some detail pointed out, form the nucleus of a monopoly which will monopolize the raw opium trade in the province of the two Kwongs into the hands of a few individuals, and possibly into the hands of the Provincial Government.
It would also be greatly prejudicial to the interests of the Indian Government if such a scheme is permitted to be enforced specially in the present unsettled and unsatisfactory state of the opium trade owing to the action of the Chinese Government
Page 5
399
in closing up the public opium dens, and importers, in view of the further uncertainty of demand from those who would hold a monopoly, would curtail importation, which would mean a material reduction of their purchases from the Government of India's monthly sales.
We think therefore that it is advisable to lay the matter before you, so that immediate steps may be taken to stop the regulations being carried into effect, and we trust that you will support us in protesting against this proposed infringement of our Treaty rights.
In further support of our contention we would beg to refer you to the following :- Article 5 of the British Treaty of Nanking 1842:
"The Government of China having compelled the British merchants trading at Canton to deal exclusively with certain Chinese merchants, called Hong merchants (or co-Hong), who had been licensed by the Chinese Government for this purpose, the Emperor of China agrees to abolish that practice in future at all ports where British merchants may reside, and to permit them to carry on their mercantile transactions with whatever persons they please; and His Imperial Majesty further agrees to pay to the British Government the sum of 3,000,000 dollars on account of debts due to British subjects by some of the said Hong merchants, or co-Hong, who have become insolvent, and who owe very large sums of money to subjects of Her Britannic Majesty."
Article 10 of the same Treaty:
"His Majesty the Emperor agrees to establish at all the ports which are by Article 2 of this Treaty to be thrown open for the resort of British merchants, a fair and regular tariff of export and import customs and other dues, which tariff shall be publicly notified and promulgated for general information; and the Emperor further engages that, when British merchandize shall have once paid at any of the said ports the regulated customs and dues, agreeable to the tariff to be hereafter fixed, such merchandize may be conveyed by Chinese merchants to any province, or city in the interior of the Empire of China, on paying a further amount as transit dues, which shall not exceed per cent, on the tariff value of such goods.
Article 14 of the French Treaty of Tien-tsin of 1858:
"Aucune Société de Commerce privilégiée ne pourra désormais s'établir en Chine, et il en sera de même de toute coalition organisée dans le but d'exercer un monopole sur le commerce. En cas de contravention du présent Article, les autorités Chinoises, sur les représentations du Consul ou de l'Agent Consulaire, aviseront aux moyens de dissoudre de semblables Associations, dont elles s'efforceront d'ailleurs de prévenir l'existence par des prohibitions préalables, afin d'écarter tout ce qui pourrait porter atteinte à la libre concurrence.”
Also to the correspondence entitled “An Opium Monopoly at Nanking" at p. 3 of the Appendix to the Report of the Hong Kong General Chamber of Commerce, 1907.
Finally, we submit that so long as the Indian Government cultivates the growth of the poppy and sells opium, it is logical that any interference with Treaty rights with regard to the sale of opium in China should be rigorously protested against, and that every means should be taken to compel China to carry out and fulfil her Treaty obligations.
We submit further, that the Chinese Government should not be allowed to make any regulations contrary to Treaty which will affect the free sale of opium from India, the growth of which, under agreement between the British and Chinese Governments is to be reduced gradually over a period of years.
[2020 -3]
We have, &c.
David Sassoon and Co. (Limited),
(Signed)
Per pro.
E. SHELLIM, Manager.
CAWASJEE, PALLANJEE, And Co.
E. D. SASSOON AND Co.
E. LABANEY.
Phirozsha B. Petit and Co.,
S. D. SETNA, Per pro.
Tata, Sons, and Co.,
B. D. TATA.
(And four other firms.)
purchase the specified amount, and no other quantity than that specified in the licence. · The purchaser has to hand over to the opium shop one copy of the licence on purchasing, and retains the other himself. Purchasers with a licence are subject to arrest a punishment.
We contend that the Government of China having, by Articles 5 and 10 of the British Treaty of Nanking, 1842, expressly agreed to abolish the practice named in Article 5 of the Treaty, and having agreed to---
"Permit British merchants to carry on their mercantile transactions with whatever persons they please,"
it is a gross abuse of this Treaty if the provincial authorities of the Two Kwongs are allowed to carry into effect the enactments contained in the notification above referred to. It is obvious that if clauses 1, 2, and 3 are carried into effect, the result - will be that a certain number of native establishments selling raw and prepared opium will be ascertained, registered, and licensed, and this will curtail the sale of raw opium, and only the native establishments registered and licensed will be competent to purchase raw opium from the British vendor, and whether the purchase by the native opium shop be made direct or through an agcut, the result will be the same. In effect, the British merchant will have his trade ent down to the limits of those who are permitted by the provincial authorities of the Two Kwongs to trade with him. Such a monopoly would prevent other dealers from participating in the opium trade, thus destroying healthy competition, and thereby crippling business and causing a heavy loss to importers, who will be at the mercy of the few native shops who hold licences authorizing them to purchase raw opium. Holders of licences would be able to combine to dictate purchasing prices, feeling confident of their position as monopolists in the trade.
We submit that the scheme is illogical, and is contrary to Treaty, and is illegal.
With regard to clause 4, viz., "that after ascertainment and registration of the number of shops in the Province of the Two Kwongs no new opium shops doing business in the buying and selling of raw and prepared opium may be established," the result of this clause will be that a monopoly will be created amongst a certain number of existing opium shops, which shops will, as time goes on, decrease in number by either (a) retire- ment from business; (b) seizure and closure by the authorities of shops for an infringement or alleged infringement of the law; (c) the purchase by capitalists of the shops and of the licences.
In the course of time, therefore, the sale of raw opium will be in the hands of a few, thus creating a monopoly. In this regard we would point out that it would be obviously difficult for a native shop to judge whether or not a licence was a genuine licence. If a licence presented by a purchaser is found to be false, the proprietor of the opium shop is liable to have his shop seized and shut up, and he would sustain the loss of his entire capital through perhaps no fault of his own. This would open the door to fraud, inasmuch as false charges could be trumped up against opium shops in order to get them seized and closed in order to obtain the forfeiture of their capital to the Chinese authorities. This, again, will ultimately result in the authorities farming the licensed shops out of those capable of paying heavy sums for them over and above the ordinary licence fees.
If these conditions are to prevail, native merchants will be chary of entering into the business, and the trade will consequently get into the hands of a few traders. We predict that in a short space of time the provincial anthorities, either by closing the existing shops or by farming them out to a few, will get the whole trade into their own hands, thus creating a monopoly, which is expressly contrary to the Treaty of Nanking.
With regard to clause 6, on each and every occasion that an individual wishes to purchase opinm, this burdensome procedure has to be carried out, and on each occasion the purchaser has to pay a licence fee. This will of necessity hamper trade and prevent freedom in the buying and selling of raw opium.
We contend that all the regulations, as we have in some detail pointed out, form the nucleus of a monopoly which will monopolize the raw opium trade in the province of the two Kwongs into the hands of a few individuals, and possibly into the hands of the Provincial Government.
It would also be greatly prejudicial to the interests of the Indian Government if such a scheme is permitted to be enforced specially in the present unsettled and unsatisfactory state of the opium trade owing to the action of the Chinese Government
5
399
in closing up the public opium dens, and importers, in view of the further uncertainty of demand from those who would hold a monopoly, would curtail importation, which would mean a material reduction of their purchases from the Government of India's monthly sales.
We think therefore that it is advisable to lay the matter before you, so that immediate steps may be taken to stop the regulations being carried into effect, and we trust that you will support us in protesting against this proposed infringement of our Treaty rights.
In further support of our contention we would beg to refer you to the following :- Article 5 of the British Treaty of Nanking 1842 :
"The Government of China having compelled the British merchants trading at Canton to deal exclusively with certain Chinese merchants, called Hong merchants (or co-Hong), who had been licensed by the Chinese Government for this purpose, the Emperor of China agrees to abolish that practice in future at all ports where British merchants may reside, and to permit them to carry on their mercantile transactions with whatever persons they please; and His Imperial Majesty further agrees to pay to the British Government the sum of 3,000,000 dollars on account of debts due to British subjects by some of the said Hong merchants, or co-Hong, who have become insolvent, and who owe very large sums of money to subjects of Her Britannic Majesty."
Article 10 of the same Treaty:
"His Majesty the Emperor agrees to establish at all the ports which are by Article 2 of this Treaty to be thrown open for the resort of British merchants, a fair and regular tariff of export and import customs and other dues, which tariff shall be publicly notified and promulgated for general information; and the Emperor further engages that, when British merchandize shall have once paid at any of the said ports the regulated customs and dues, agreeable of the tariff to be hereafter fixed, such merchandize may be conveyed by Chinese merchants to any province, or city in the interior of the Empire of China, on paying a further amount as transit dues, which shall not exceed per cent, on the tariff value of such goods.
Article 14 of the French Treaty of Tien-tsin of 1858:
"Aucune Société de Commerce privilégiée ne pourra désormais s'établir en Chine, et il en sera de même de toute coalition organisée dans le but d'exercer un monopole sur le commerce. En cas de contravention du présent Article, les autorités Chinoises, sur les représentations du Consul ou de l'Agent Consulaire, aviseront aux moyens de dissoudre de semblables Associations, dont elles s'efforceront d'ailleurs de prévenir l'existence par des prohibitions préalables, afin d'écarter tout ce qui pourrait porter atteinte à la libre concurrence.”
Also to the correspondence entitled “An Opium Monopoly at Nanking" at p. 3 of the Appendix to the Report of the Hong Kong General Chamber of Commerce, 1907.
Finally, we submit that so long as the Indian Government cultivates the growth of the poppy and sells opium, it is logical that any interference with Treaty rights with regard to the sale of opium in China should be rigorously protested against, and that every means should be taken to compel China to carry out and fulfil her Treaty obligations.
We submit further, that the Chinese Government should not be allowed to make any regulations contrary to Treaty which will affect the free sale of opium from India, the growth of which, under agreement between the British and Chinese Governments is to be reduced gradually over a period of years.
[2020 -3]
We have, &c.
David Sassoon and Co. (Limited),
(Signed)
Per
pro.
E. SHELLIM, Manager. CAWASJEE, PALLANJEE, And Co.
E. D. SASSOON AND Co.
E. LABANEY.
Phírozsba B. Petit and Co.,
8. D. SETNA, Per pro. Tata, Sons, and Co.,
B. D. TATA.
(And four other firms.)
C
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