Since February last the Chekiang authorities have prohibited the importation of and trade in Indian opium, in absolute contravention of existing treaties, causing accumulation of stocks in Shanghai and heavy depreciation in the value of same.
Owing to this high-handed and illegal action the opium market has been paralysed, the merchants have been unable to move off their stocks and repay the money the banks have advanced to them, and should the present state of affairs be allowed to continue, disastrous failures may result, involving the banks in heavy losses.
The amount of money at present locked up in this trade amounts to several millions of pounds sterling, a considerable part of which has been advanced by us.
While prohibiting the trade in Indian opium, it is a matter of common knowledge that the Chekiang authorities have allowed the cultivation of the native drug in that province to continue unabated, and that it is sold freely in Shanghai.
We understand that these facts have already been brought to the notice of His Britannic Majesty's Minister by the opium merchants, and that as a result of his representations the Peking Government, while expressing their desire to adhere to the treaties and agreements of the former Government of China, declare their inability to impose their wishes on Chekiang province.
We recognise the difficulties of the Peking Government in providing protection for foreign trade in distant parts of the republic, but fail to see how it can be seriously contended that it is unable to exact obedience to its wishes in a province so easily accessible as Chekiang, and we therefore respectfully beg to ask the consular body to transmit this protest to their respective Ministers at Peking, and request them to protect our interests either by insisting on the Government enforcing the adherence of Chokiang province to existing treaties and agreements or by obtaining a promise from them to make good any losses we may sustain by this illegal interference with legiti- mate trade.
As the matter is one of considerable urgency we beg to suggest that the foregoing be transmitted to Peking by telegraph.
We are, &c.
Chartered Bank of India, Australia, and China. Hong Kong and Shanghai Bank. Deutsch-Asiatische Bank.
Mercantile Bank of India (Limited).
Russo-Asiatic Bank.
Yokohama Specie Bank.
Banque de l'Indo-Chine.
International Banking Corporation.
Banque Sino-Belge.
Netherlands Trading Syndicate. Bank of Taiwan (Limited).
This Document is the Property of His Britannic Majesty's Government.]
OPIUM.
€ CONFIDENTIAL.
[29457]
No. 1.
576
C.C.
[July 15.].
DEGE AUG 12
SECTION 1.
Foreign Office to Messrs. E. D. and Messrs. David Sassoon and Co.
Gentlemen,
Foreign Office, July 15, 1912. SIR E. GREY has been carefully considering your letters of the 11th, 20th, and 28th ultimo, in consultation with the Secretary of State for India, and he now desires me to send you the following reply
In regard to your request that His Majesty's Government will support a claim put forward by you to the Chinese Government on account of losses sustained through the illegal restrictions on the opium trade, Sir E. Grey regrets that he is unable to give any general promise of support as to claims the nature and amount of which are unknown to letter of the him, nor is he able to act on the alternative suggestion contained in
your 20th ultimo, that the Chinese Government should be pressed to take over the stocks of Indian opium now in the merchants' hands.
His Majesty's Minister at Peking has made strong representations to the Chinese Government, pointing out that the provincial authorities are doing everything to bamper the trade in Indian opium and nothing to prevent the cultivation of the poppy, and protesting against the failure of the Central Government to enforce the observance of treaties by its subordinate officials.
Sir E. Grey has simultaneously handed a strongly-worded protest in a similar sense to the Chinese Minister here.
Sir J. Jordan has been further instructed to make a protest to the Chinese Government with regard to the proclamation, said to have been issued in the province of Kiaugsi, establishing a monopoly of sales of opium from the 1st instant, and ordering the suppression of the opium trade in December next; and still another telegram has been dispatched to Sir J. Jordan on receipt of your letter of the 10th instant, directing him to protest against the further restrictions on the trade which you report.
His Majesty's Goverument are also considering the possibility of taking steps to prevent the smuggling of opium into China from Macao.
With regard to the request renewed in paragraph 2 of your letter of the 28th ultimo, that the Government of India should be urged to suspend the sales of certified opium in Calcutta and Bombay until the Chinese Government have been induced to carry out their treaty obligations, I am to inform you that the Government of India's decision, conveyed to you in the letter from this Office of the 25th ultimo, was arrived at after a careful consideration 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. The Government of India have received representations from other They firms interested in the China opium trade objecting to suspension of the sales. had, moreover, to take into consideration as regards Malwa opium the loss that would result to native States if the 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 a temporary suspension of this year's notified sales.
I am finally to observe that the magnitude of the losses complained of is in a great You represent that you hold measure due to the action of the merchants themselves. stocks of opium "bought from the Indian Government at high prices," but it is clear that the prices in question were determined by you and other opium dealers on what The merchants themselves caused the rise during 1911 must be speculative grounds.
in the price bid for opium in India certificated for China to double what it was at the beginning of that year, and the Chinese Government cannot justly be alone beld responsible for the losses sustained by the merchauts, in so far as they are represented by the difference between the inflated price which opium reached in the autumn of last
and the price at which it now stands.
year
I am, &c.
W. LANGLEY.
[2519 p- 1}
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