CO129-395 - Public Offices - 1912 — Page 560

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is also known that poppy is being grown in the province, though there is no sufficient evidence that it is on a hitherto unprecedented scale." But to say that the Chêkiang authorities are permitting or encouraging this growth is absolute nonsense. It is well known that the country is in an anarchial condition, and in out of the way places there is no control at all. It is known what harsh measures were taken to put down poppy cultivation, and it is no wonder that the cultivation should have been begun again in those places when the Government was powerless.

We cannot see how the rambling statement made by our correspondent disproves our argument that the heavy stocks now held by the merchants are the result of their own operations. It is useless to deny that the price of opium for some time has beon made by the opium merchants themselves. Our correspondent discourses upon the law of supply and demand, which can apply only in the case of articles which are extensively sold and bought, and not sold only by a handful of men. For some time past there has been a combination for high prices, without reference to supply and demand.

As our correspondent himself points out in the letter, while more and more stock was coming into the country, and the clearances were not even near being satisfactory, prices were moving up from 2,000 taels to 4,000 taels per chest last year. How does the law of supply and demand apply to this instance?

Our correspondent misses our point in reference to the total sales, and the reduction made by the Government of India in the quantities of Bengal opium sold at the Calcutta auctions. Our point was that the very high prices, on the basis of which the merchants want to sell their stock in China, were paid only when the quantity auctioned was as low as 195 chests per month. No reason has yet been adduced to disprove our contention that if the merchants had got rid of their stocks from time to time, when there were opportunities, they might not have had such a heavy load now. Prices were jumping up, and "no sellers" was continually ruling the market, and we know of instances where the opium merchants, after having sold to the Chinese dealers, have bought back again at much higher prices-of course, in the certain expectation that 5,000 taels, or thereabouts, would soon be ruling in the market.

We have stated quite plainly that the merchants should have their treaty rights, and the discussion about the position of the trade has nothing whatever to do with the Chekiang restrictions, which, we maintain, are not justifiable.-Ed.

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merchants to lower the market so that the new foreign hongs who were then large holders night suffer huge losses and be wiped out altogether. On the other hand, the importers are just equally capable of raising the market. It is a well-known fact that on numerous occasions news was given out of a big rise in Calcutta and the native dealers upon knowing it, put up" the market only to find out after a few days that that news was devoid of fact. Moreover, the purchases made in Calcutta are entirely the manipulation of the merchants and not due to any force of competition by outsiders.

Prior to the outbreak of the revolution the market was booming and it is on record that que firm after having bought at 2,500 taels refused to sell even at 4,000 taels firmly believing that the rates would soon rise to the unconscionable level of 5,000, 6,000, 7,000 or even 8,000 taels. In view of the present deadlock due to the desire of Young China to liberate herself from the vice of smoking it is unfortunate that the shortsighted policy of the merchants has landed them to-day in the unenviable position of having a heavy stock and being unable to move it off.

I am, &c.

R. ALEXANDER.

Enclosure 5 in No. 1.

Extract from the "North China Daily News" of May 18.

THE OPIUM TRADE.

To the Editor of the "North China Daily News":

Sir,

ZENO, the philosopher said :

Shanghai, May 17, 1912.

"When one dares not say what one thinks, one ends by not thinking what one says."

From

I beg leave to challenge the statement made by "Justice" in your to-day's issue that "the prices of opium cannot be made or maintained by opium merchants." my own experience in the trade I am in a position to vouch the accuracy ry your state- ment and to endorse your opposite views so ably dealt with in your issue of the 14th instant. The merchants with all their wealth" have all along been in a position to hold the Alladin's Lamp, that is, to raise or lower the market according to their whims and fancies. In November 1910, they actually lowered it by spreading an unfounded rumour that the tax in Canton which had been illegally imposed by the Viceroy was about to be doubled and more barrassing measures adopted, and thie rumour, coming from an authoritative source, had completely thrown the native dealers into a state of panic with the result that confidence in the trade had been shaken and the rates heavily declined. Subsequently it was proved that the rumour was false and baseless and was a mere contrivance on the part of the wealthy"

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