Enclosure 5 in No. 1.
Hong Kong Merchants to Governor Sir F. May.
Your Excellency,
Hong Kong, December 11, 1912. WE, the undersigned merchants interested in the opium trade, beg to draw attention to the very grave situation obtaining to-day.
your
We would respectfully remind your Excellency of the new opium agreement of May 1911, whereby, in consideration of the removal of all harassing measures (ie., illegal taxation, &c.), the British Government agreed to the Chinese Government raising the duty and likin from 110 taels to 350 taels, and, further, the British Government agreed to diminish the output from India.
Very soon after the publication of this agreement the obstructive methods referred to above were resumed, culminating with the entire closure of the province of Chekiang to the importation of Indian opium from the early part of 1912, and since then, sometime in August last, a proclamation was issued by the commissioner of police in Canton to the effect that after the 31st December, 1912, un more smokers' licences will be issued, and that the trade must cease on that date.
Since the issue of this proclamation practically every province in China, acting under instructions from the Central Government, has issued proclamation to the same effect, thus bringing about the present very critical situation. The latest telegrams from our Shanghai branches of yesterday's date inform us that the Chinese authorities in Hankow have notified the dealers to reship the Indian opium, stored with the Hankow Customs, back to Shanghai.
The threat to end the trade at the conclusion of the current year, if carried out, would bring about a very grave financial crisis.
We would invite your Excellency's attention to the following figures which show the stocks at stake:-
Shanghai
Flong Hong..
Calcutta and on the way
Bombay and on the way
Total
::::
Bengal.
Malwa
Cases.
Cases,
3.567
1.030
8,530
11,860
1,350
2.975
13,447
15,865
29,312
5
Your Excellency will observe from the figures stated above that the amount of money involved is stupendous, and it requires no stretch of imagination to understand what such a crisis must mean.
The situation has been greatly aggravated by the attitude taken up by the Indian Government, who, in spite of our repeated protests and their knowledge of the acute situation in China, still continue their sales.
Your Excellency is aware that Malwa opium is exported under permits. These permits are sold in monthly instalments at auction. The permits covering the number of chests permitted to be shipped during this year have all been sold. Not content with this, the Indian Government has commenced to sell permits for 1913, despite the repeated protests of merchants, thus creating an impossible situation.
Regarding uncertified opium, we have had the honour from time to time of Whilst acquainting the Hong Kong Government of the quantity imported into Macao.
the legitimate consumption of that port, including shipments thence to South American ports, was and should be, less than 200 chests per annum, 200 to 250 chests per mensem are regularly received. It is no secret that the difference existing between the price of uncertificated opium and certificated opium encourages the smuggling of the uncerti- ficated drug on an extensive scale.
We have drawn the attention of the Indian Government to the fact that the quantity put up for sale each month is largely in excess of legitimate requirements and protested strongly, but, we regret to say, without result.
The Indian Government have sold and continue to sell opium which is certified for shipment to China.
We would respectfully submit the action of the Indian Government is unreasonable in view of the fact that China is virtually closed. We would ask then what is the use of forcing shipments of opium to a market, which prohibits the trade. Further, we would ask what is to become of the huge stocks already in Hong Kong and in China.
On a former occasion your Excellency was good enough to extend to us your strong support and we venture to hope that at the present juncture, far more serious than ever before, your Excellency will represent to the Colonial and Indian officers in the strongest possible terms the magnitude of the issues involved and the very serious consequences which must ensue if the situation is not promptly relieved. We also beg that wire in similar terms to His Britannic Majesty's Minister in Peking,
We have, &c.
(Here follow signatures)
you will
These stocks represent about 12,000,000Z.
We are informed to-day that extensive cultivation of the poppy is again being
carried on in the following places :-
Chun Kong district.
Nan On district.
Tung On district.
Ma Hong district.
Fukien Province.
Kwangtung Province.
U Ping district (near Swatow).
It is, thus, very evident, that whilst the Chinese Government is prohibiting the
sale of Indian opium, the natives are cultivating the Chinese drug.
In September last seven chests of Malwa opium were seized and burnt by the Chinese authorities at Anking. His Majesty'a ship "Flora" was dispatched to the scene of the outrage with the consul-general, Sir E. Fraser, on board to demand reparation. His Majesty's ship "Flora" returned without apparently having achieved anything. The moral effect was disastrous conducing, as it has done, to a repetition of seizures in other provinces.
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