CO129-395 - Public Offices - 1912 — Page 577

569

[This Document is the Property of His Britannic Majesty's Government.] C. 0.

2

For a considerable portion of the journey from Haiphong to Yünnan-fu it was very obvious that I was under observation, both in Indo-China and Yunnan--the prefect of police for Yunnan accompanied me for a whole day. On my return to French territory I was told that my movements had been followed, as great interest bad been excited and some perturbation caused by my presence, due to a rumour that I was commissioned by the Government of Hong Kong to enquire into the opium cultivation in Indo-China and Yunnan. This information came to me from various independent sources, the grounds for such belief being: (1) No other Englishman had made the journey without having some definite business-reasons of health were considered a very feeble explanation; (2) I was on a visit to the British consul-general; (3) I was known to be a Government servant and connected with the Imports and Exports Office; and (4) It is probable there was something to conceal from the Ilong Kong Government.

I am, &c.

ARTHUR C. FRANKLIN.

OPIUM.

CONFIDENTIAL.

[29457]

No. 1.

India Ofice to Foreign Office.-(Received July 11.)

[July 11.]

SECTION 1.

LDERS O AUG 12

Sir,

India Office, July 10, 1912. I AM directed by the Secretary of State for India in Council to reply to your letter dated the 5th July, 1912, on the subject of the Indo-Chinese opium trade.

With reference to paragraph 2, I am to say that the Marquess of Crewe does not consider it necessary to consult the Government of India again on the request made by be Messrs. Sassoons, that the sales of certified opium in Calcutta and Bombay may suspended until the Chinese Government have been induced to carry out their treaty obligations. The Government of India's telegram of the 6th June makes it clear that they had examined the question in all its bearings, and that there were many reasons, which still hold good, for the decision at which they had arrived. They expressly point out that so far from all the opium merchants of Calcutta being in favour of the suspension of further sales, some had already petitioned the Government not to act on Messrs. Sassoons' proposal. Similar representations against suspending sales of Malwa opium for the China market have been made by Malwa traders.

I am to suggest that, in reply to their letter of the 28th June, Messrs. Sassoons might be informed that the Government of India's decision was arrived at after a careful examination of the question in all its bearings, and that the condition as to three months' notice, though an important, was not the sole reason that weighed with them. They have received representations from other firms interested in the China opium trade objecting to suspension of sales. They had to take into consideration as regards Malwa opium the loss that would result to native States if sales were stopped. They also apprehend that the position of His Majesty's Government in regard to enforcing the observance by the Chinese Government of the terms of the agreement of May 1911 would be weakened by even temporary suspension of this year's notified sales. It is thought that this last consideration should appeal to firms having large commit- ments in China.

Lord Crewe concurs in the terms of Sir Edward Grey's proposed reply to Messrs. Sassoons' request, that His Majesty's Government should hold the Chinese Government responsible for losses sustained by the merchants through the breach of treaty stipulations, or that it should press the Chinese Government to take the mercbants' stocks of Indian opium. I am to observe that the magnitude of the losses complained of is in a great measure due to the action of the merchants themselves. In representing that they hold stocks of opium "bought from the Indian Government at high prices," Messrs. Sassoons do not mention the fact that the prices in question were determined by themselves and other opium dealers on grounds which can only be described as speculative. They have themselves to blame that the price bid for opium in India certificated for China was raised in the course of the year 1911 to double what it was at the beginning. So far as "the enormous losses" sustained by the merchants are represented by the difference between the inflated price which opium reached in the autumn of last year and the price at which it now stands, the responsibility for them cannot be justly said to rest "on the Chinese Government alone.'

I am, &c.

LIONEL ABRAHAMS.

[2549 7-1]