CO129-372 - Public Offices - 1910 — Page 512

CONFIDENTIAL.

CO

25500

REC?

Reg219 AUG 10

(No. 111.) R.

Sir Edward Grey to Mr. Max Müller (Peking).

Foreign Office, July 30, 1910, 1:50 P.M.

YOUR despatch No. 210 [of 24th June: Opium tax at Canton]. India Office understand that the tax, for the levy of which the regulations provide, is levied from "prepared opium" merchants whether settled within the limits of the treaty port or outside those limits in other towns in the province.

As regards prepared opium" dealers within the treaty port, the levy from them of the tax would appear to be a clear infringement of the Chefoo Convention, according

to the interpretation placed upon its provisions in the past. (See Sir J. Jordan's note of 2nd January, 1909, to Wai-wu Pu.)

Articles 4 and 7 of the regulations seem devised to get round the stipulation in the Chefoo Convention that no local tax shall be levied on opium so long as it is in unbroken packages and under seal.

You should urge the Wai-wu Pu to issue instructions without delay for the withdrawal of article 6 of the regulations, so far, at any rate, as it applies to treaty ports, drawing attention to the views of His Majesty's Government on this point, and at the same time state that His Majesty's Government regard articles 4 and 7 as likely to interfere with the wholesale trade in foreign opium, and are thus an infringement of the additional article of the Chefoo Convention.

It should be made clear to Chinese Government that if existing arrangements as to the import of foreign opium are not considered satisfactory matter is one for negotiation with His Majesty's Government, who are prepared to consider question in a reasonable light; Chinese Government are not, however, at liberty to take action setting aside treaty engagements without previous agreement with His Majesty's Government.

You may, if you consider it likely to have any useful result, hint that, if Chinese Government persist in their present attitude of obstruction on opium question, His Majesty's Government may have to consider the desirability of denouncing the Chefoo additional article. On the other hand, if they will withdraw the regulations and undertake to observe fairly the existing treaty obligations, His Majesty's Government is prepared to agree to enhancement of import duty.

1502-104]

2439+

508