CO129-404 - Acting Governor Claud Severn - 1913 [10-12] — Page 20

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despatches relating to matters an which 12-Co. ang with Beault

Sir Henry May by the end of this

also the Intimates. The

1

weekl

Unofficials

девать

others are

quite

frantic abut the hiiliter (ontribution

a

but have not yet Taken the line of resignation as in th-S.S. in 1895.

Re weather is now getting splended twe have descended from An ountain 605 je for a week as there

down belns. We in a good deal on shall came down payond about the 10' hovember.

Jums saicerely

ClandSevern

COPY.

1.

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39626

Memorandum on the Macao Opium Farm 1913.

Some explanation is wanted for the extraordinary rise in thể

of the Macao Opium Farm. The last Farm was let from August 1st., 1910,

for $148,500.00 for 3 years; the conditions being

(a) Local consumption limited to 500 chests to be reduced

annually by 10%.

(b) Export limited to 1,500 chests to be reduced annually by

15%.

The present farm was let under the conditions of the Agreement of 14th. June, 1913.

(a) 260 chests for local consumption

(b) 240 chests for legitimate export, provided that if further legitimate export can be proved, this amount can be increased on payment of a proportional increased rental.

This farm was let on July 15th., 1913, at an annual rental of $1,056,66€ The difference in price is alarming but if everything is taken into consideration is capable of explanation.

2. In any opium farm or monopoly there are three main points to consider.

(a) The extent of the market for prepared opium.

(b) The price at which prepared opium can be sold without

reducing that market.

(c) The price of raw opium.

To explain the Macao situation it is necessary to go back some years and consider the position before the last farm came into existence. 3. In 1903 a farm was let in Macao at a rental of $330,000 per annum for a period of 10 years. The supply of raw opium was not I believe limited by the Macao Government. In addition to the local consumption at Macao the farm had a practical monopoly of the export trade to America and a considerable proportion of the trade to Australia. That is to say they had a wide market. The profits were however limited owing to the competition from Hongkong, Canton, Amoy, and other places in South China who could all obtain their raw opium at the same rate and all of them having a certain connection with America and Australia.

4.