[This Document is the Property of His Britannic Majesty's Government
OPIUM.
CONFIDENTIAL.
*
[21312]
No 1.
+297
[June 14.]
SECTION 52
1 JUL TO
Sir,
Messrs. E. Sassoon and Co. to Foreign Office.-(Received June 14.)
9, Fenchurch Avenue, London, June 14, 1910.
ON several occasions during the past three years we have had the honour to bring to your notice sundry attempts on the part of the Chinese authorities to hamper the trade in Indian opium, with the ultimate intention of creating a monopoly in contravention of existing treaties. This attitude on the part of China is very detrimental to the interests of the Indian revenue and to British merchants alike, but up to recently it has been held in check by the timely intervention of His Majesty's Government.
We now, however, beg to bring to your notice the fact that the Canton authorities have by proclamation levied, as from the 9th May, a new tax professedly on prepared opium, but actually on raw opium, seeing that the raw opium dealers are made responsible for the collection of the tax, which amounts to 300 dollars per chest. We may here mention that Kwong Wing Yuen, the party authorised by the bureau to collect the new taxes, is, we are given to understand, to retain 30 per cent. of the amount so collected.
The imposition of this tax is, we maintain, a breach of the Treaty of Chefoo, and the effect on the opium trade has already been most disastrous both to the Indian revenue and to British merchants. As regards the former, we beg to point out that the price realised by the Indian Government at auction for Patna opium in April, before the proclamation of the new tax, was approximately 3,700 rupees.
In May, after the proclamation, it was 3,100 rupees, and in June only 2,200 rupees.
The new tax, though proclaimed for the 9th May, was not actually enforced until last week, as the Chinese authorities, as hitherto, waited to see what position would be adopted by His Majesty's representative towards the protests which would naturally result. His Majesty's consul-general at Canton unfortunately regarded the tax in the light that the Chinese authorities desired, and declined to address any representation to the provincial authorities, holding the view that the tax is a non-differential tax actually levied on prepared opium alone. The governor, the Hong Kong Chamber of Commerce, the China Association, and the merchants interested hold the opposite
view.
According to the additional articles of the Chefoo Convention, duty and li-kin having been paid to the Imperial Maritime Customs, foreign opium is not to be subjected to any further taxation except at the place of consumption, and then only provided that a similar tax is imposed on the native drug. In this instance not only is the tax to be levied at a treaty port-in itself a breach of treaty rights-but whole packages bearing the Customs certificate will also be subjected to this taxation, as in the majority of cases the Canton dealers sell wholesale.
The situation is now very critical, as the opium trade has been brought to a standstill. Merchants like ourselves hold large stocks, purchased at high prices from the Government of India, on the understanding that they will be permitted to carry on a legitimate trade in accordance with treaty rights. In the meantime, stocks are accumulating and prices falling heavily. As the outlet is stopped, it is evident that lower prices still will be realised at the next auctions, thus seriously affecting the Indian revenues, and causing untold loss to British merchants.
Under these circumstances, we beg leave to urge His Majesty's Government to take active and immediate action with a view to having this tax repealed as contrary to treaty, and we hold that we should be fully justified in claiming compensation for the loss which has already been inflicted upon us by this breach of treaty on the part of the provincial authorities.
We desire to protest most strongly against the harassing tactics so repeatedly adopted by the Chinese authorities towards this trade, and from a long experience of Chinese methods we can assert with confidence that if the new tax be allowed to
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