CO129-427 - Public Offices - 1915 — Page 229

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the agreement on the 1st May, were initiated from the Chinese side, and did not begin before the 27th April, but I have reason to believe that the Combine had been sounded on the subject prior to the departure of Mr. Ts'ai Nai Huang from Peking, who arrived at Shanghai on the 27th April. Mr. Ts'ai has a brother resident at Shanghai who is, I am informed, very largely interested in Indian opium. The negotiations were kept profoundly secret, and the first intimation of them was given to Mr. Wilton on the 4th May.

The agreement is a remarkable document, and it will be observed that the date of expiry synchronises with that fixed at the annual meeting of Shanghai ratepayers for the expiry of opium licences, viz., 31st March, 1917. The payment of 3,500 dollars is described as a voluntary contribution towards the suppression of illicit sales of native opium in Kiangsu, Kiangsi, and Kuangtung, and it is expressly declared that the payment is not in any wise a tax, duty, or imposition imposed by the Chinese Government." The "guarantee fee mentioned in article 4 refers to a private contribution of“ 600 dollars a chest paid to the Canton Government on every chest delivered to Canton dealers, Although not stated, the payment of 3,500 dollars is exclusive of the duty appears to payable to the Maritime Customs.. No mention is made as to prices, and it have been left to the discretion of the Combine to get whatever they can.

The position of the stocks on the 1st May was approximately as follows: the number of chests held by the Opium Combine at Shanghai and Hong Kong was 6,081, of which 1,100 had been sold and paid for by Chinese dealers who had not yet taken delivery. Of the remaining 4,981 chests, one-half had been contracted for by Chinese. Retail prices were advanced by 2,000 taels at Shanghai on the 1st May, and the retail prices ruling there then were about 9,000 taels, or rather more than 1,0001, a chest. The advances made by native banks to holders of Indian opium amounted to 1,250,000 taels, while the Hong Kong and Shanghai Bank, the British Bank principally involved, was interested to double that amount.

The negotiation and signature of the agreement came as a surprise to me, but I do not doubt that the impression recorded in my telegram No. 105 was correct, and that the step taken was in connection with the scheme reported in my despatch No. 67 of the 22nd March, and that the motive of the agreement is not so much the The Chinese suppression of opium as the opening up of a fresh source of revenue, Government are hard put to it for money, and the prospect of a contribution of 2,000,000l. paid regularly in weekly instalments has evidently proved too great a temptation for them to resist. The conception of the present arrangement is due to the Finance Minister, and is probably but the prelude to a scheme for the establishment of an opium monopoly on similar lines to the Japanese monopoly in Formosa. The Finance Minister doubtless took into full consideration the overshadowing of the opium question by the recent Sino-Japanese negotiations, and he has presumably hoped that the anti-opium party in China, weakened by the loss of its most prominent members through illness and death, will not be able to offer effectual opposition. The provinces concerned, however, must either be coaxed or coerced by the Central authorities into accepting the terms of the present agreement. Kuangtung is smuggling large quan- tities of Yunnan opium, with the connivance, I am informed, of the Military Governor, whose brother is largely interested in native opium at Canton, and there is nothing to show that the Provincial authorities of Kiangsu have been consulted as to the ment. Kiangsi may, perhaps, be negligible in this instance, as the consumption of Indian opium in that province is not large, and cannot be compared with that in the other two provinces.

agree-

It cannot be denied that the present attitude of the Chinese Government in this matter marks a retrograde step in their policy of opium suppression, and is tantamount to a confession of inability to stamp out the vice in the present generation of opium- smokers.

Whatever the results of this change of policy on the part of China may be, His Majesty's Government can frankly declare that they have adhered scrupulously and honourably to the treaties, in spite of flagrant breaches by the Chinese Government, and have never wavered in their promise to assist China in her self-imposed task of eradicating opium by 1917.

I have, &c.

J. N. JORDAN.

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Enclosure 1 in No. 1.

Wai-chiao Pu to Sir J. Jordan.

Sir,

Peking, March 26, 1915. WITH reference to the joint inspection by British and Chinese officials of opium cultivation in the various provinces, I had the honour on the 8th instant to address a note to your Excellency informing you that I had received telegraphic requests from the two provinces of Kansu and Hsinchiang for joint inspection in accordance with treaty, and requesting that the matter should be taken into consideration beforehand.

To this note I have received no reply. I am

now in receipt of a telegram from the Governor of Kiangsu in which he proposes to ask for joint inspection of opium cultivation in that province during the inonth of May, that being the time of year during which the poppy is in flower, and requests me to consult with your Excellency and reply to him in due course by telegraph.

The province of Kiangsu having telegraphically asked for joint inspection in accordance with treaty, this Ministry, the Ministry of the Interior and your Excellency, should severally decide on the officials to be sent in order to enable a date to be fixed

I therefore have the honour to request your Excellency to take note of the above facts and to reply at one and the same time to both my notes.

I avail, &c.

for them to start.

Enclosure 2 in No. 1.

(Seal of the Wai-chiao Pu.)

Wai-chiao Pu to Sir J. Jordan.

Siz,

Peking, April 13, 1915. I HAVE the honour to acknowledge the receipt of your Excellency's notes of the 31st March and 7th April on the subject of the joint inspection of poppy cultivation in the various provinces.

In the former you stated that, in regard to Kansu and Hsinchiang, you would communicate again with me, on receipt of a reply from His Majesty's Government, by telegraph, and that in regard to Kiangsu you were instructing deputies for the necessary duties of joint inspection during the period when the poppy is in flower. In the latter, you informed me that you had instructed Messrs. Wilton and Rose to proceed as deputies for the forthcoming inspection of poppy cultivation in Kiangsu, and that they would arrive for that purpose at Chinkiang on the 28th April.

I have the honour to inform your Excellency in reply that this Ministry has appointed acting senior clerk, Shen Ch'eng-ku, and that the Ministry of the Interior has appointed senior clerk, Hsu Te-fen, to carry out the duties of joint inspection, and that these two gentlemen are being instructed to proceed to Chinkiang by the appointed date to meet and consult with Messrs. Wilton and Rose.

I avail, &c.

Enclosure 3 in No. 1.

(Seal of the Wai-chiao Pu.)

Wai-chiao Pu to Sir J. Jordan.

(Translation.) Sir,

Peking, April 20, 1915. I HAD the honour on the 13th April to address a note to your Excellency on the subject of joint inspection of poppy cultivation in the province of Kiangsu, informing. you that this Ministry had appointed acting senior clerk, Shen Ch'eng-ku, and that the Ministry of Interior had appointed senior clerk, Hsu Te-fen, to carry out the duties of joint inspection in conjunction with the officials deputed by you for this purpose. The Governor of Kiangsu was also informed of these appointments.

I now have the honour to inform your Excellency that I am in receipt of a telegram from the Governor of Kiangsu to the effect that the Provincial Government have

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