CO129-417 - Public Offices - 1914 — Page 25

[This Document is the Property of His Britannic Majesty's Government.]

C.O.

OPIUM.

CONFIDENTIAL.

24265

Bra 6 JUL 14

23

[May 25.]

SECTION 1.

[20287)

(No. 142. Confidential.) Sir,

No. 1.

Sir Edward Grey to Sir J. Jordan.

Foreign Office, May 25, 1914.

I HAVE had under consideration your despatch No. 126 of the 23rd March concerning the closing of the provinces of China to Indian opium and the possibility of terminating the traffic.

At the time when the proposal was first put forward that the Government of India should repurchase the unsold stocks awaiting entry into China there was every prospect that at the end of the present year a considerable proportion of these stocks would still remain unsold, and that much of this balance would be unable to find a market in China. On this assumption I despatched to you my telegram No. 9, Confidential, of the 20th January, and caused a letter to be written to the India Office urging the necessity for putting a stop to the traffic as soon as possible by repurchase of the remaining stocks.

In the last paragraph, however, of your despatch under reply you state that in the ordinary course the 8,131 chests of certificated Indian opium awaiting entry into China on the 1st March would all be absorbed before the end of this year. In these circumstances the situation appears to me to differ materially from that which existed at the beginning of the year, and it appeared to be a matter for consideration whether, in the altered conditions, the proposals for repurchase should be carried any further.

The Government of India have stated their position in their letter of the 13th March, and after a perusal of their arguments I am reluctant to put further pressure upon them to take over the stocks.

It is evident, moreover, that no offer which His Majesty's Government would be prepared to make for the balance of the stocks would, in view of the enormously enhanced prices at present prevailing, be accepted by the merchants without demur, and there can be little doubt that any negotiations entered into would extend over a considerable period of time, with the probable result that, if and when a satisfactory arrangement had been concluded, a comparatively small proportion of the stocks would still remain. I consider it questionable whether the advantages which this country might expect to gain from the redemption of a fraction of the stocks would suffice to counterbalance the expenditure involved, as well as the financial disturbance which a proposal to take over the stocks at cost price could hardly fail to create.

Having regard to all the circumstances I have decided in consultation with the Secretary of State for India that the proposal to withdraw the stocks from China shall not be proceeded with.

Copy of the correspondence on the subject with the India Office is enclosed herewith for your information.**

I am, &c.

E. GREY.

*To India Office, February 6; India Office, February 17; ditto, April 6; to India Office, April 20; India Office, May 6, 1914.

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