CO129-451 - Public Offices - 1918 — Page 382

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

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30553

OPIUM.

CONFIDENTIAL.

REC

REG 21 JUN 18

[May 25.]

SECTION 1.

[93471]

No. 1.

(No. 447.) (Telegraphic.)

Sir J. Jordan to Mr. Balfour.-(Received May 25.)

Peking, May 24, 1918.

YOUR telegram No. 161 of 19th March. Minister for Foreign Affairs informed me verbally yesterday that Cabinet were ready to give effect to exchange of notes on lines of Vice-Minister's statement, reported

in my telegram No. 252 of 16th March. At the request, however, of Minister of Finance, Cabinet were postponing formal assent until conclusion of agreement now in course of negotiation between Chinese Government and opium merchants at Shanghai. I have no details of this agreement, but Minister for Foreign Affairs gave me to understand that Cabinet considered above procedure advisable in order to save embar- rassment to President of Republic in view of his connection with Nanking Agreement of January 1917, to which he was party (see my despatch No. 74 of 1917).

I have recently learnt that opium stocks at Shanghai, amounting to 1,120 chests on 1st March, are in British bonded warehouses, and that owners have declined to give bond assuring Customs' control. Judgment recently given by British assessor in Mixed Court at Shanghai casts doubt on powers of municipality to forbid sales within settlement, as judgment is prima facie contrary to declared policy of His Majesty's Government, and appears likely to encourage disposal of stocks within international settlement, I am calling on His Majesty's consul-general for a report.

It is not easy to foresee to what extent His Majesty's Government might be involved if exchange of notes were made after conclusion of agreement between Chinese Govern- ment and opium merchants. While advocating exchange as a suitable ending of opium question, I should hesitate to do so in the event of postponement such as proposed by Chinese Government.

I would suggest therefore that, unless Chinese Government agree to exchange of notes without delay and prior to conclusion of agreement with merchants, we should decline exchange, and await developments arising out of such agreement.

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