CO129-445 - Public Offices - 1917 — Page 236

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the provinces concerned, I shall have the honour to address your Excellency a further despatch, and in the meantime I shall be glad to have the favour of a reply.

Seal of Wai-chiao Pu.

JONG KONG

t

232

Enclosure 2 in No. 1.

Memorandum respecting Opium Stocks.

THE following figures were supplied on the 12th January, 1917, by Mr. A. Howard, of David Sassoon and Co. (Limited), the chairman of the opium "combine" at Shanghai

Total stocks Hong Kong and Shanghai

British owned

Non-British owned

Sold and not delivered (this represents opium sold to the Kwangtung

monopolists who have not cleared a chest since March last)

British merchants in Chian own

British merchants in Indis own

Chests.

3,100

2.200

900

800 BUO

1,700

Practically no business has been done in opium in Shanghai during the last few months. The statistics show that 558 chests were cleared in Shanghai during the five months ended on the 31st December, 1916, the total stocks in Shanghai and Hong Kong being thus reduced from 3,549 chests on the 31st July to 2,991 on the 31st December. I understand that these 558 chests represent opium previously sold but not previously taken delivery of. Mr. Howard, with whom I had an interview in Shanghai last month, repudiated the suggestion that the opium combine had any control over prices, and insisted that clearances were retarded-not by the high prices quoted, which were purely nominal, but by the existing uncertainty in regard to the future disposal of the stocks.

At the interview referred to Mr. Howard declared that the one and only desire of the opium merchants was to get rid of their stocks and be quit of the opium trade for good and all. He referred with some bitterness to the warning issued by the legation in November 1914, from which they had learnt that it was the intention of His Majesty's Government to close the provinces of Kiangsi, Kiangsu, and Kwangtung without regard to the continued cultivation of native opium in other provinces. It was this, he said, that drove them into the arms of the Chinese Government and led to the agreement of the 1st May, 1915. He admitted that the trade must end in December 1917, and also that there was no hope of getting the Chinese Government to extend the said agreement. He stated, however, that an arrangement was under consideration whereby the Chinese Government would take over all stocks remaining on the 31st March, 1917, giving ten year bonds in payment. He did not tell me the price proposed, remarking that it was impossible to say at what discount the bonds would be negotiable, but he led me to understand that about 7,000 taels a chest had been suggested. This arrangement, he said, was approved by the Vice-President, Feng Kuo-chang, and by the whole Cabinet at Peking, but it had got to be submitted to Parliament. He was of opinion that if it were once made known that the Chinese Government would take over the balance of the stocks there would be a rush for elearances, and there would be in fact no stocks remaining on the 31st March.

I asked Mr. Howard whether it was proposed to invite the British authorities to recognise this agreement. He intimated that the combine were rather afraid of the legation, but would be glad of support if it could be obtained; did I think the legation would approve the scheme? I replied that I had no authority to discuss the question; it would in any case be necessary to have full particulars-I said I did not know the nature of the arrangements contemplated by the Indian Government for the disposal of the stocks.

Nothing further has transpired concerning this project.

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