CO129-382 - Public Offices - 1911 — Page 462

[This Document is the Property of His Britannic Majesty's Government.]

'OPIUM.

CONFIDENTIAL.

(5568]

CO 6653-

[February 15.]

SECTION 2,

Pret 17 MAR 11

No. 1.

(No. 41.)

Sir J. Jordan to Sir Edward Grey.--(Received February 15.)

(Telegraphic.) R.

MY telegram No. 33 of 8th February.

Peking, February 15, 1911.

At meeting to-day Chinese delegate submitted draft counter-proposals, which differed materially from memorandum of 1st November.

Following are principal points of difference :--

1. Articles 1 (d), 1(e), 1(ƒ), and 1(g) of the memorandum relating to the withdrawal of restrictions and taxation of opium are all eliminated, and proposals are substituted providing for equality of treatment of foreign and native opium, and authorising application to Indian opium of all laws and regulations promulgated by Chinese Government or by its officers for suppression of native opium.

2. An additional article stipulates that if in future Powers should decide upon other measures for treatment and control of opium, British and Chinese Governments are to enjoy all the benefits derived therefrom, and that such enjoyment shall not be impaired by the present agreement.

As regards increase of consolidated duty Chinese delegate insisted that it should be an ad valorem tax on market price, assessed every six months on price for previous six months, and undertook that consolidated duty on native opium should be similarly fixed so as to demonstrate principle of equality of treatment.

I told delegate that an acceptance of Chinese Government's proposals for total extinction of trade before 1917 and for extinction of trade by provinces was dependent on their acceptance of terms of memorandum of 1st November, and that proposal 2 was altogether inadmissible.

It is evident that taxation question will meet with strong opposition, and that our interpretation of the additional article of 1885 will not be accepted.

(Sent to India.)

[5665]

(No. 43.)

No. 2.

Sir J. Jordan to Sir Edward Grey.-(Received February 15.)

(Telegraphic.) R.

YOUR telegram No. 24 of 14th February.

Peking, February 15, 1911.

I spoke strongly yesterday to the Chinese delegate in the sense of the second paragraph of your telegram, and stated that I could sign no agreement that did not put a stop to continued restrictions and arbitrary taxation in force at Canton. But I have little hope that Chinese will now formally accept an interpretation of the treaty which they have always contested in the past.

Apart from treaty considerations, Chinese argument is that, while price of foreign opium has more than doubled in the last two years, and Indian revenue has not suffered by progressive reduction, China, being obliged by treaty to levy a fixed specific duty on Indian opium, has lost heavily. Not only this, but China is sacrificing a revenue of 20,000,000 dollars a-year on native opium. Chinese delegate stated yesterday his conviction that China will effect complete extinction of opium in two years, and reports of Sir A. Hosie and other travellers show that this is by no means improbable.

(Sent to India.)

[1897 p-2]

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