CO129-369 - Acting Governor May Governor Sir Lugard - 1910 [10-11] — Page 166

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.88

Our fundamental stand is taken on the

Additional Article at to the Chefoo Convention, which lays

down that, 1, foreign oplum on being imported shall pay T. 30

tariff duty and T. 80 likin.

2. after such payment has been made it may be

repacked in bond, and have issued to it a transit certificate,

freeing it from all farther taxes or duties whilst in transport

into the interior.

3. such transit certificate shall have validity

only in the hands of Chinese subjects.

4. on arrival at its destination it shall be

subject to no other tax or contribution other than such tax or

contribution, as is levied on native opium.

Although not so specifically stated in the

additional Article, His Majesty's Government contend that the

payment of transit likin, in respect of opium for consumption

in a Treaty Port, frees it ipso facto from all farther taxes

or contributions within the Treaty Port area. To this contention

however, the Chinese Government have not subscribed.

Since the coming into force of the Addition-

-mal Article it worked smoothly and was as a rule faithfully

observed by the Chinese Government. From time to time, it is

true, attempts were made to tax it indirectly by levies, nominally on prepared opium, but these attempts were invari-

-ably successfully resisted on the ground that, owing to the

unknown incidence of taxation on native opium, it would thero-

-by be subjected to differential treatment.

In 1906 China first formulated her policy

of opium suppression, and invited therein the co-operation of His Majesty's Goverment. To this adhesion was given under certa -ain conditions and China commenced a campaign, the vigour of which surpassed previous expectation. For some reason or other, perhaps because she is not herself one of the large opium producing provinces and hence unable to show zeal by eradicating the growth of the poppy, the province of Kuangtung, instituted suppressioM