CO129-382 - Public Offices - 1911 — Page 165

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In 1 (c) Mr. Max Müller proposed to insert the words "Imperial or" before "provincial authorities.” Dr. Yen had intimated that the Wai-wu Pu took strong objection to the wording of clause 1 (f), especially to the phrase "as interpreted by the British Government," which they considered derogatory to their dignity. Mr. Max Müller, as he reported to you in his telegram No. 187 of the 12th November, agreed with Sir A. Hosie in considering the words unnecessarily harsh, besides being superfluous, in view of the fact that the same object was secured by clauses (d) and (e), and therefore informed Dr. Yen that, subject to your approval, he was prepared to substitute for affect clause (f) as it stood the following words: "The above clauses (d) and (e) in no way the terms of the additional article to the Chefoo Agreement, which still remains in force. In clause 1 (g) it was agreed, at Dr. Yen's suggestion, in order to make the Chinese text clearer, to add at the end the words "by or with the sanction of the Chinese authorities.

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In 2 (h) the words "unreservedly accept and" were struck out.

Mr. Max Müller then told Dr. Yen that he had carefully considered the draft article submitted by him, providing for a 30 per cent. ad valorem duty on foreign and native opium alike, and he was astonished to see that it was a mere repetition of the suggestion put forward by the Wai-wu Pu on the 10th September, and dropped by tacit agreement with Mr. Liu for the reasons stated in Mr. Max Müller's despatch No. 336 of the 29th September. It was pointed out to Dr. Yen how thoroughly impracticable the proposal was, how impossible it would be to fix a market value for native opium throughout China, and how unfair to take the present artificially inflated price of foreign opium in the treaty ports as the corresponding market value of foreign opium, more especially when one considered the fact that it included the heavy taxation already paid in India. According to a rough calculation, a 30 per cent. ad valorem tax would amount to about five times the present consolidated import duty, and that was not really a proposal which Mr. Max Müller could reasonably be expected to accept or to submit to His Majesty's Government. Besides, the Wai-wu Pu appeared to forget that there was at present no uniform tax on native opium, and that they must first be in a position to prove to us the existence and enforcement of such a tax before we could consider the question of an enhancement of the consolidated import duty.

Mr. Max Müller then showed to Dr. Yen a counter-draft that Sir A. Hosie had drawn up, but Dr. Yeu took great objection to it, and Mr. Max Müller therefore after this interview prepared another draft, copy of which I have the honour to enclose. This draft he handed to Dr. Yen at the Wai-wu Pu the same afternoon, and he impressed on him and also on the grand secretary, Na T'ung, whom he saw that day, the extreme urgency, in the interests of all parties, of arriving at a speedy settlement of the question. They both promised to do what they could to expedite matters, but said that as there were questions of taxation and revenue involved the agreement would have to be submitted to the Board of Finance, and would also have to be approved by Prince Kung, the opium commissioner. Mr. Max Müller tells me that since that date, in spite of repeated applications to Dr. Yen and to the Wai-wu Pu, he has been unable to extract any more defuite reply than that the agreement was being considered by the Board of Finance. Mr. Max Müller was loth to believe that the Chinese Government were preparing to go back on proposals which originally emanated from them, and which he had discussed for weeks with a representative of the Wai-wu Pu without the slightest hint being given of any objection to the main principles involved, while in matters of detail every possible concession had been made to meet any suggestions put forward from the Chinese side.

The truth is, that since the date on which the Chinese Government submitted in writing their request for a seven years' agreement, a new factor had arisen with which they had to reckon probably not unwillingly. In my despatch No. 435 of the 1st instant I reported at some length certain phases of the anti-opium agitation which has lately sprung up and which is being carefully fostered not only in Peking and Tien-tsin, but throughout the country. Of the growing strength of the agitation at home it is unnecessary for me to speak, but it is evident that it has had its counterpart in the movement that has recently sprung up here for considerably curtailing the period allowed for the final abolition of opium cultivation and consumption in China. There can be no doubt that the promoters of this movement are in deadly earnest, and are swayed, for the most part at all events, by disinterested and humanitarian motives. The

purpose they aim at cannot fail to command our admiration, however misguided and unpractical we may consider the methods by which they hope to attain their object and however erroneous and one-sided the information may be on which they base their arguments. Hardly a day passes in which the papers do not contain articles referring

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to the anti-opium crusade, accounts of meetings or manifestos of Chinese anti-oplum societies and letters from kindred societies, or individual sympathisers in England, and the appeal addressed to me by the Chinese National Auti-Opium Society, forwarded in my despatch No. 435 of the 1st instant, has been freely published in the native press. I cannot do better than enclose, for your information, a few specimens of the articles and letters which have appeared in the "Peking Daily News" on this subject during the past five weeks, and of which many parallels and reproductions can be found in the various native papers.*

In my despatch No. 435 of the 1st instant I stated that there was to be a debate on the question in the Senate the following day. The upshot of the debate was that a resolution was passed to prohibit both the planting and the smoking of opium within the next year, a memorial to this effect was to be presented to the Throne, and the Wai- wu Pu requested not to conclude any further agreements with foreign Powers in regard to the trade in opium. I enclose a short account of the discussion taken from the

Peking Daily News."*

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I will now return to my interview at the Wai-wu Pu, a brief account of which I telegraphed to you last night. Mr. Max Müller and Sir A. Hosie accompanied me, and on the Chinese side Dr. Yen was present as well as their Excellencies Na Tung, Tsou Chia-lai, and Hu Wei-te.

I stated that I had come especially to the Board that day to continue the discussion of the opium question. Negotiations had been proceeding for some months between Mr. Max Müller and especially appointed representatives of the Wai-wu Pu, and the main principles of a new agreement had been agreed on with the exception of the exact terms of an article referring to the enhancement of the consolidated import duty on foreign opium. This point, I understood, was being considered by the Board of Finance, as it involved questions of taxation and revenue. I emphasized the necessity of the Board coming to a definite decision as to whether or not they were prepared to proceed on the basis already agreed upon, since the time still remaining within which to conclude a fresh arrangement was very short.

Na Tung replied in a long speech, the gist of which was that the matter had been referred to the Board of Finance, who were considering the whole opium question, and that nothing could be done until they had replied. He went on to explain that there bad been a change recently in the situation with regard to the opium question, and it might be necessary to reconsider the question on a different basis. When pressed to state his exact meaning, he admitted that the change in the Board's attitude was due to the anti-opium agitation which had sprung up recently and had resulted in the adoption of the resolutions by the Senate.

I expressed surprise at hearing that the Chinese Government proposed to give way in such a matter to a small body of Chinese and foreign agitators, and to go back on everything which had been satisfactorily arranged during the last four months between His Majesty's chargé d'affaires and the Board. Mr. Max Müller pointed out that the two main principles of the draft agreement, viz., the progressive reduction during seven years and the arrangements for preventing the 16,000 chests, not touched by the previous arrangement, from reaching China, were adopted from a proposal made in writing by the Board as long ago as the 10th September. This written proposal had been communicated to the British and Indian Governments, and the Chinese Govern- ment would be guilty of a breach of faith in receding from it now. He further reminded Mr. Hu Wei-te that at the interviews which he had with him in June and July his Excellency had always insisted that there was no necessity for a fresh agreement, as the old agreement must be automatically prolonged for a further seven years.

Dr. Yen interposed the remark that Mr. Max Müller's memorandum of the 1st November had not been finally agreed to, since the idea on the Chinese side had been that the memorandum as a whole could not be accepted until the article about the increased duty had been settled, thus tacitly admitting that the two main principles for which we were contending had been accepted.

I then asked the Grand Secretary to state definitely whether the Wai-wu Pu declined to continue negotiating on the basis of the draft agreement, drawn up by Mr. Max Müller in consultation with their representatives, first his Excellency Liu Yuk-lin and latterly Dr. Yen. Na Tung was as usual evasive in his reply, and hinted at a fresh arrangement based on a shortening of the seven years' period. He kept harping on the point that the matter had been referred to the Board of Finance, who were considering the whole question of the revenue derived from the taxation of

* Not printed.

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