This Document is the Property of His Britannic Majesty's Government.]
OPIUM.
CONFIDENTIAL.
[14637]
C.O.
16765
RECO
REG 8 MAY 14
No. 1.
[April 2,]
SECTION 2.
456
Sir J. Jordan to Sir Edward Grey.-(Received April 2.)
(No. 119.) Sir,
Peking, March 18, 1914. IN continuance of my despatch No. 9 of the 12th January last, I have the honour to report on the condition of the certificated opium market during the past two months.
The total stocks of certificated Indian opium in Hong Kong and Shanghai at the end of the year 1913 were 14,248 chests; but of these, 2,509 chests, though still lying in bond, had been sold for cash to Chinese merchants, the net stocks in the hands of the opium dealers thus being 11,739 chests.
The market price at the end of 1913 was approximately 4,000 taels a cheat. During the two months of January and February some 3,608 chests were sold, reducing the net holding of the opium dealers at the end of February to 8,131 chests. The total lying in bond was 12,034 chests, of which the balance of 3,903 chests had already been purchased by Chinese merchants.
Prices increased greatly during the two months: Patna and Benares opium increased some 70 per cent, and the price at the end of February was rather more than 6,800 taels per chest; while Malwa opium increased some 40 per cent., and reached 5,600 taels per chest.
In the light of these figures two facts stand out conspicuously: The stocks are being purchased by the Chinese with a rapidity out of proportion to current consumption, and the opium dealers are making enormous profits from the enhanced prices.
The keenness with which, in spite of much drastic opposition from Chinese official sources, the Chinese are taking up the remaining stocks of certificated opium is clear proof of the difficulty of the attempt to eradicate the habit from the country. Much of the opium now purchased is being bought by wealthy Chinese, who dare not face the day when opium may be more difficult or even impossible to obtain, and who, by concealing the opium underground or elsewhere, hope to lay in a sufficient stock of the drug to last at least their lifetime.
I have heard that such purchasers include several high Chinese officials. The enormous price at which certificated opium is now sold should do much to ease the minds of those who have been inclined to feel compassion for the opium merchant in the restrictions which his trade is supposed to suffer through the action of the Chinese authorities. Questions put by Sir J. Rees in the House of Commons read strangely to those who know the facts in China.
When it is remembered that a chest of opium which, less than five years ago, was sold for about 1,000 taels is now being sold by the dealer for 6,800 taels or more, it will readily be seen that compassion is out of place. It is credibly reported that the Shanghai Opium Combine has netted during the past twelve months a clear profit of 1,500,000 taels (say, 200,000), and one member of the combine has, it is currently reported, recently been sufficiently affluent to purchase a property in Shanghai for 700,000 taels (say, 100,000) and to build himself a new house costing 300,000 taels (say, 45,0001)
Profits have not stopped at the foreign dealer By the time a cheat of opium bas reached the retail merchant in Shanghai it is worth at present prices 10,000 taels, and in remoter places for retail consumption it is worth anything up to 50,000 taels.
Even if the remaining 8,000 odd chests were to remain on the dealers' hands unsold, the huge profits already made would reduce any question of loss to a minimum.
But it may be expected that the stocks of certificated opium will, under present conditions, be sold within this year, even though the dealers, by their control of the market, raise prices still higher. I am informed that the Shanghai Combine confidently expect to sell at 10,000 taels a chest before they dispose of the last chest of certificated opium.
I have, &c.
J. N. JORDAN.
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