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[This Document is the Property of His Britannic Majesty's Government j
OPIUM.
CONFIDENTIAL.
[5562]
No. 1.
[February 5.]
SECTION 1.
Sir,
China Association to Foreign Office. (Received February 5.)
159, Cannon Street, London, February 3, 1913.
I HAVE the honour to acknowledge the receipt of your letter of the 21st December last, in which you were good enough to state the steps that have been taken to obtain redress for the seizure and destruction of seven chests of opium at Anking, adding that the whole opium question is occupying the serious attention of His Majesty's Government,
Since the date of that letter things have gone from bad to worse, and the evidence seems now complete that China has finally resolved to disregard the convention entered into in May 1911, From the 1st January, according to our advices, every province is closed to the import of Indian opium, and a new Penal Code is being put in force, which visits with severe punishment anyone found trafficking in opium in any shape or form. Even the death penalty would seem to have been wantonly inflicted in
more than one case.
The gravamen of the situation, from the association's point of view, is the deliberate breach of the convention of 1911, which naturally leads to the appre- hension that if China is allowed to disregard her international obligation in one case, she may easily do so in another, whenever it suits her purpose and she can urge a plausible pretext for so doing. If the Chinese Government felt that from pressure of public opinion, or for other good reason, they were no longer in a position to carry out the convention, their plain duty was to approach His Majesty's Government with a view to its modification or abrogation, offering at the same time to compensate parties who might be sufferers from the abrupt termination of the agreement. The object of the association, however, in addressing you is not to labour that point, feeling assured that its importance will have due weight with His Majesty's Government, but rather to suggest some practical means of alleviating the monetary position, which is urgent now and which will become more urgent as time goes on.
The present position, according to our information, is that there is now stored in Shanghai and Hong Kong approximately 28,000 chests of opium, costing something like 10,000,0001 Import duty at tariff rates has been paid on some 4,500 chests of this amount. The drug is unsaleable, or, if sold, buyers dare not take delivery. Conse- quently, the merchants who paid for, and the bankers and others who have advanced upon this stock, are face to face with enormous losses.
It cannot be said, on any reasonable construction of the conditions, that the merchants are to blame for this state of affairs. The situation has been created solely by the action of the Chinese, and, if they persist in refusing to carry out the terms of the 1911 agreement, the only just and equitable solution is that they should take over the existing stocks at a price which would indemnify the merchants against loss. It is conceded, however, that it would be difficult for the Chinese Government, in its present impecunious condition, to pay in cash for so large an amount. But it is suggested that the result might be attained in a different way.
There is, admittedly, a widespread desire in Chinese official circles to see the import of opium put an end to. The motives may be mixed. There exists a considerable volume of opinion hostile to the drug which finds expression in spasmodic attempts to eradicate cultivation and stop consumption. There is at least an equal collateral desire to expel Indian opium because it is foreign. In any case production and consumption continue in varying degrees in various provinces, and one project of control hus been the creation of official monopolies for its sale under certain restrictions with a view to eventual extinction.
These conditions suggest a way out of the present apparent impasse. The Indian Government has been urged by the merchants concerned to suspend further sales of certificated opium, and this, it is understood, has been partly agreed to. If India would go a step farther and agree to stop the export to China once and for all, it is believed that in return for this concession there would be no great difficulty in getting China to create an official bureau to take over existing stocks, which could be gradually
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