CO129-405 - Public Offices - 1913 — Page 423

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2. Senhor de Freitas has spent nearly a month at Macao studying the situation there, and on his return he told me that his Government had instructed him to ascertain unofficially from me my views as to the limitations to be placed on the opium farmer at the next letting of the opium farm there in the matter of the amount of opium which he should be allowed to use. Senhor de Freitas said that if a figure could be agreed upon with this Government the negotiations in Lisbon and London on the subject would be much facilitated.

3. Accordingly on the 28th ultimo I had a conversation with the Minister, a note of which is enclosed, and, as he said that he would telegraph a summary of it to Lisbon, I thought it proper to inform you by telegraph of the gist of the interview.

4. I am still of the opinion expressed in my confidential despatch of the 15th October last that 150 chests per annum would be an ample allowance for the local consumption at Macao. But as I found that the Portuguese Government would not be likely to accept so low a figure, I deemed it expedient to raise it to 180 chests per annum in order to arrive at an agreement. But I would urge that under no circumstances should a higher figure be agreed to.

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5. Regarding the allowance for export I attach copy of the reply I received from His Britannic Majesty's Minister in Mexico to my letter of the 3rd October, and of subsequent telegraphic correspondence with him, which speaks for itself. I do not know when the fiscal year in Mexico begins, but it is obvious from the figures given by Mr. Stronge, which work out in chests of opium, as set out in enclosure 6, that the import of opium into Mexico is comparatively small, and would probably be satisfied by an export of the product of 240 chests per annum from Macao. If that should not be enough there the 120 chests allowed to the Hong Kong farmer to fall back upon. am willing to agree to Macao having the larger allowance because their interest in the export trade has always been greater than that of Hong Kong.

6. If the limitations I have suggested can be imposed a great diminution in smuggling from Macao should ensue. The imports there of uncertificated Bengal opium during 1912 reached the enormous figure of 1,786 chests, of which thirty chesta were imported from Hong Kong (these chests were imported prior to the 1st September, 1911); 325 chests from Singapore, and 1,431 cheats from Calcutta, by direct steamer in both cases. In connection with this direct importation Senhor de Freitas has represented that it puts the Macao farmer to very heavy expense, and has asked whether import from Hong Kong can be permitted if the limitations on the Macao farmer are arranged to the satisfaction of this Government. I said that I would be willing in that event to make the necessary arrangements for the supply of uncertificated opium to Macao under proper safeguards. These would be easy under the recent amendments of the opium ordinance.

I have, &c.

Enclosure 4 in No. 1.

Governor Sir F. May to Mr. Harcourt.

F. H. MAY.

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Enclosure 5 in No. 1.

Notes by Governor Sir F. May.

CONSUMPTION in Hong Kong is 540 chests per annum. Population is 440,000. Population of Macao is 71,000. Allowing for 100,000 rural population of

per cent. Hong Kong, it is submitted that the consumption of Macao cannot exceed 20 of that of Hong Kong. Putting it at 25 per cent. we arrive at consumption of 135 chests per annum only.

2. Export of prepared opium to Mexico from Macao prior to 1911 was very small. But in the twelve months the 1st July, 1911, to the 30th June, 1912, he boiled 334 chests for export to Mexico. 1 have ascertained that the import of prepared opium (including compounds of opium) to Mexico in 1910-11 was the equivalent of 310 chests, while in 1911-12 it was only 223 chests.

The export of prepared opium from Hong Kong to Mexico was the equivalent of 60 chests in 1911 and of 11 chests in 1912. More prepared opium was therefore exported to Mexico in 1911--12 than she received.

3. From the 1st July, 1911, to the 80th June, 1912, there were imported into Macao from Singapore, Calcutta, and Hong Kong 1,364 chests of uncertificated opium. The amount of opium returned as having been used by the Macao farmer in the same period was :-

(a.) For local consumption..

(.) For export to Mexico ..

Total

--

The local consumption, it is submitted, is excessive.

Chests.

461 344

805

It is submitted that opium supplied for local consumption at Macao should be limited to 150 chests per annum as a maximum; and that not more than 240 chests should be allowed for boiling for export. It is suggested that export should only be allowed on permits for import issued by the Mexican Government.

I represented the foregoing facts to Senhor de Freitas, Minister for Portugal to Peking, to-day. He argued that the local consumption of Macao should be fixed at 340 chests per annum, and the export at 240 chests. I said that I would accept the latter figure on the understanding that the export from Macao of opium to Mexico were only permitted on production of permits of import into Mexico issued by the Mexican Government.

His Excellency agreed to this.

After considerable discussion I said that in order to arrive at an agreement, I should not object if the number of chests the Macao farmer were permitted to draw for local consumption were limited to 180 chests per annum.

Hong Kong, February 28, 1913.

F. H. MAY.

(Telegraphic.) P.

you

Sir,

Hong Kong, March 5, 1913. IN continuation of my Confidential despatch of the 3rd December, I beg to inform that I had an unofficial conference with Senhor de Freitas, Portuguese Minister en route for Peking, who was desired by his Government to discuss the limitations to be placed on imports of opium into Macao for the use of the opium farmer on the expiry (in July 1913) of the present contract. Senhor de Freitas urged the following allowance: 300 chests for local consumption and 240 for export trade per annum. I insisted that the maximum amounts which my Government could allow as reasonable are 180 chests for local consumption and 240 chests for export to Mexico, with the proviso that export would be permissible only on production of certificates from that Government allowing import.

The Hong Kong opium farmer informed me confidentially, for the information of Senhor de Freitas, as to the financial effects of such limitations, that he would be prepared to offer 400,000 dollars for the Macao farm on those conditions. The Macao Government at present receive only 140,000 dollars per annum rentel. It is hoped you will make such representations to the Portuguese Governments as will induce them to accept these figures of mine. I am sending full details by mail.

that

Enclosure & in No. 1.

Mr. Stronge to Governor Sir F. May.

Mexico, January 13, 1913. I HAVE the honour to report that on receipt of your Excellency's despatch, I at once addressed a note to the Mexican Government asking to be supplied with the information you desired, in order to make some arrangements whereby the traffic of opium may be kept within legitimate bounds.

A few days later I also received a telegram from the Foreign Office on this same subject, which I likewise communicated to the Mexican Government, asking for a reply to both these notes.

I failed to receive any reply until the 8th instant, when they forwarded me a table showing the total amount of opium imported into Mexico during the past five

years.

I lost no time in transmitting the contents of this answer from the Mexican Government to the Foreign Office, as you will see from the enclosed copy of a despatch I addressed to Sir Edward Grey, in reply to his enquiries, and you will observe that I have also reported that I have renewed my request for replies to the points raised by

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