CO129-372 - Public Offices - 1910 — Page 535

(No. 18.) Sir,

2

Enclosure 1 in No. 1.

Consul-General Jamieson to Mr. Max Müller.

Canton, June 28, 1910 IN accordance with the instructions conveyed in your telegram No. 12 of the 22nd June, in reply to telegraphic representations I had the honour to address to you on the 21st instant, with regard to the new provincial levy on prepared opium, I wrote to the Acting Governor-General protesting against any taxation in excess of the 110 taels sanctioned by the additional article to the Chefoo Convention on foreign raw opium in a treaty port. Of this communication I have the honour to enclose a copy, as also of a despatch to the officer administering the Government of Hong Kong, dealing with certain arguments brought forward in his reports of the 16th and 21st instant to the Secretary of State for the Colonies, copies of which, I understand, are already in your possession,

I have not so far received an answer from the Acting Governor-General, but I feel sure that when it comes it will seek to maintain that an impost paid by opium after it has been boiled at the place of consumption, even though such place be a treaty port, does not fall within the scope of the additional article. Sir Henry May, with whom I discussed the whole question in person in the course of a special visit paid to the colony for the purpose, contends, on the other hand, that the obligation to boil down, within three days, all raw opium purchased, and at once to pay a tax on the out-turn, constitutes in effect a direct impost on raw opium, payment made by the boiler as distinct from the importer notwithstanding. This is good reasoning, and is an argument I have used in my protest to the Acting Governor-General. Still, in the absence of a time-limit, how are fraudulent returns by the boiler to be guarded against? As will see from Enclosure No. 2, I am, however, unable to follow his other contentions.

Such being the present position, I propose to refrain from farther action until you have again heard from the Foreign Office.

you

In the meantime, the indiscretion of a subordinate has resulted in the premature publication of certain draft regulations contemplating au extension of the newly introduced system. Of these 1 enclose an abstract embodying their more important clauses, although I am informed by the Opium Prohibition Bureau that they are incomplete, and that, prior to adoption, discussion between the British and the Chinese Governments must take place. More especially will this have to be the case with regard to rule 15, of which a full translation and copy are enclosed, and which contemplates the entire suppression of opium smoking at the end of thirty months, the terins of the ten years' agreement being completely ignored.

I have, &c.

Enclosure 2 in No. 1.

J. W. JAMIESON.

Consul-General Jamieson to the Acting Governor-General of the Liang Kuang.

Your Excellency,

Canton, June 25, 1910.

I HAVE the honour to refer to the recently published regulations regarding a levy on prepared opium.

His Majesty's chargé d'affaires, to whom I have submitted the matter, BOW instructs me to protest against any levy on raw opium in a treaty port other than the charge sanctioned by the additional article to the Chefoo Convention. It is only when opium arrives at its place of consumption in the interior that the Chinese Government are at liberty to impose further non-differential taxation. Any foreign raw opium consumed at a treaty port must therefore be excluded from the scope of the new levy.

Apart from contravening the Chefoo Convention the rules are further open to objection by reason of the obligation to boil down all opium purchased within three days. This is an interference with trade, as it may not suit a purchaser to boil down at once the entire amount purchased, and is in effect a direct tax on raw opium, as the purchaser might just as well pay the sum due immediately on purchase as wait until three days have elapsed. Proof of this contention is as a matter of fact afforded by a receipt issued to a certain native buyer for a ball of raw opium purchased on the 10th June, which states that he at the same time paid 7 dol. 20 c. in respect of the boiled opium levy.

3

The Hong Kong Government have also written to me complaining that, as the Kuang Jung Yuan firm are still carrying on their opium business, the grant to them of the collection of the new levy partakes of a monopoly and places them in a more favourable position than their competitors.

On these grounds it is therefore my duty to lodge a protest and to request your Excellency to take immediate steps to have all provisions of the regulations infringing the Chefoo Convention abrogated. China having given His Majesty's Government distinct assurances that, pending the expiry of the decennial period, the legitimate trade in opium carried on by British subjects would not be interfered with, the latter have a right to expect that the promises made will be carried out. I have, &c.

Enclosure 3 in No. 1.

J. W. JAMIESON.

Consul-General Jamieson to the Officer administering the Government of Hong Kong.

(No. 40.) Sir,

Canton, June 27, 1910. IN continuation of my despatch No. 89 of the 25th instant, I would now wish to offer certain observations with regard to various points raised in the two reports, Nos. 202 and 210, addressed by you to the Secretary of State for the Colonies on the subject of the recently imposed levy on prepared opium in the province of Kuangtung. I am impelled to adopt this course, as the mistranslation of a certain word and a misconception of the actual modus operandi prescribed by the published regulations have to a large extent obscured the question at issue, which, as laid down by His Majesty's Legation, is as follows:--

Is a levy on prepared opium in a treaty port in effect an additional tax un imported raw opium other than such imposts contemplated by the additional article to the Chefoo Convention?"

contention.

It is, for instance, contended that a trading monopoly has been created. Neither the Chinese text of the regulations nor the procedure adopted, to my mind, justify such The Kuang Jung Yuan firm has been entrusted by the provincial Govern- ment with the collection of a certain tax on prepared opium, payable by the boilers after the opium has been boiled down, and receives for expenses and remuneration a percentage of the proceeds. They have no monopoly of the trade, nor have the previously existing number of licenses issued to wholesale dealers or prepared opium dealers been cut down. The statement that they control the issue of such licences recurs throughout the correspondence, forming enclosures in your reports, and I grant that the text of the rules gives colour to this assumption. As a matter of fact, however, they are all, as heretofore, issued and sealed by the Opium Prohibition Bureau-a Government office.

I am at a loss to understand your assertion that the incidence of the tax falls on the raw opium dealers. All that the latter is called upon to do is to furnish, for purposes of check on boiling and consumption, returns showing his stocks, imports, and sales, hardly a matter against which one can raise objection as being contrary to treaty. Similarly, The calculation I find myself unable to endorse your interpretation of article 12. therein made which proves to you that raw opium is to be taxed is merely introduced with a view to guarding against fraudulent returns on the part of the boiler-the payer of the tax, as, having bought so much raw opium, he must account for a corresponding quantity of prepared opium.

An accusation is preferred against me of surrendering a position successfully contested in 1902-3 by my predecessor, Mr. James Scott. A reference, however, to the correspondence which took place at that time will show that the tax then sought to be enforced was of a totally different nature to the present one, seeing that it was intended to collect on raw opium in unbroken packages immediately on entering China. To-day, the rights of unbroken packages, packages repacked for carriage into the interior, whether of this province or beyond, or of raw opium in the importer's hands, are in nowise interfered with. It is only when the drug has been boiled down at the place of consumption that the levy is exacted, and, once paid, frees the prepared article from further provincial charges of a similar kind.

The copy

of the receipt enclosed in your despatch No. 27 of the 21st instant, indicating a departure from the rules of procedure laid down and a violation of the

[2860 6-2]

B 2

531