CO129-470 - Public Offices - 1921 — Page 119

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We think action on these lines is practicable, though we do not underrate the difficulties and risks involved. The production of and trade in opium are sources of wealth to the cultivator, to the capitalist who finances him, to many merchants (large and small), to the local officials and to the Chief of the State.

Prohibition will certainly be resented, and trouble will only be avoided by the) exercise of great care.

4. As a first step, we think the course recommended goes as far as is prudent. It is sufficiently far-reaching to prove our good faith and desire to co-operate with China. If it can be carried out successfully the quantity of opium available for export from the Shan States will be substantially reduced. There remains the opium which is produced east of the Salween, notably in Kokang, Manglun, Kengtung and the Wa States. Unless we are prepared greatly to strengthen our control east of the Salween and to support it with large armed forces, we think it would be most unwise to attempt to interfere at present with the cultivation of opium.

Should China protest that we are leaving untouched territory that adjoins hers and from which smuggling is practically easy, the answer is that the matter is too big to be dealt with all at once. We must feel our way. No one knows what will happen in the next few years. If China adheres to her present anti-opium policy as regards production, and if, at the same time, her officials connive at the import of the drug, the temptation to supply the market from the Shan States will continue to be great.

It may be that she will try to make her policy effective by a real attempt to suppress the use of opium and that her next step will be towards the prevention of smuggling. Should this happen, our position will be improved. We shall honestly On try to prevent opium being available, and she will honestly try to keep it out. the other hand, it is at least conceivable that Yunnan (if not the Central Govern- ment) will recede from the high moral position as regards opium, and that cultivation will again be permitted or at least not be prevented. In this event prices must fall. And, as the price paid by Chinese merchants fixes the market rate in the Shan States, production here would naturally decline.

ANNEX 3.

Mr. Stirling (Superintendent and Political Officer, Southern Shan States) to the Assistant Secretary to the Financial Commissioner, Burma.

July 14, 1919.

IN reply to your endorsement, dated the 4th July, 1919, I have the honour to say that the possibility of preventing the smuggling of opium from the Shan States into China can only be judged if the conditions of the traffic are clearly realised.

2. In the first place, it must be borne in mind that the smugglers are all Chinese. The Shans dare not engage in the business. They know well that they would be looted, if not murdered, and that they would have no redress. The Chinese come in large and strongly armed parties; caravans numbering 150 men, most of whom carry magazine rifles, are not uncommon. They do not follow the main trade routes, but travel by unfrequented paths. They mean to get opium, and they mean to resist any attempt at interference when they return to China. Hitherto they have got all the opium they wanted, and, as the last thing they desire is trouble with the British authorities, they have handed over their weapons on arrival at Kengtung, and have, as a rule, been well behaved. If, however, they found that people who had opium refused to sell to them, it is quite possible they would compel them to sell.

At any rate villagers in remote parts of the State could always plead that the persuasion by which they were induced to sell was backed by force. The caravans break up into small parties on reaching Kentung, and collect opium throughout the State. They also get a substantial quantity from Siam.

3. It is currently reported, and believed, that the caravans pay blackmail to the officials on their return to China, in order that the transit and final distribution of the opium may be winked at. Large quantities of the drug are said to be sent from Yunnan to Kwantung, and this would only be possible with the connivance of the provincial authorities. It has been stated in the press (with what truth I do not know) that the cultivation of the poppy has been officially permitted in Kweichow, in order to prevent the drain of silver into Yunnan. We have heard of caravans being attacked and looted by brigands, but we have not heard of their losing their opium through seizure by Chinese officials. I submit that it is abundantly clear that the

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Yunnanese Government do not really want to suppress the import of opium; they have stopped short after suppressing cultivation. And I say with confidence that if Chinese did not come for the opium, smuggling from the Shan States into China would cease, or be reduced to negligible proportions.

4. If, however, it is still considered that action must be taken on this side to prevent the traffic, the magnitude of the task should be fully realised. The Keng- tung frontier with Yunnan is roughly 200 miles long. To the south there is the line of the Mekong, separating Kengtung from French territory for 100 miles, across which opium is taken. Mr. Thornton will no doubt give his views regarding the long line of unadministered Wa country, and the still longer frontier of the Northern Shan States. To be really effective, preventive posts would have to be numerous, and, bearing in mind the men to be dealt with, they would also have to be strong. It seems to me that nothing short of a chain of armed posts, assisted by aeroplanes, would really make smuggling impossible. In this connection I may note that the traffic is not confined to the open season; it is also carried on during the rains.

5. The effect on our own people of preventive action by the British Government should not be overlooked. It is true that the opium traffic from the Shan States to China is of recent growth, but it has been allowed to reach large proportions. More- over, it has taken the place of the export to Siam and French Indo-China (which, in part at least, was quite legitimate) and these markets have been lost. The Kengtung Sawbwa and all his chief officials and leading men make the bulk of their income out of opium, and have done so for many years. They would certainly resent measures that would cause them grievous loss. If the traffic to Yunnan were suppressed by the Chinese authorities it would be regarded as justifiable, and possibly prompted by high motives. Suppression by the British Government in the interests of China, and to the detriment of our own subjects, would not be regarded in the same way.

6. A consideration of the foregoing facts leads me to believe that the suppression of smuggling by preventive measures on the frontier is impracticable as well as impolitic. And short of the establishment of a preventive force, I do not think any- thing can be done. Proclamations that the importation of opium into Yunnan is prohibited have only led to the sales of opium to Chinese smugglers being very thinly veiled. Most of the opium licensees in the Shan States are Chinese, and there is a considerable local trade. Nothing is easier than to pretend that the drug is sold for a lawful destination; the seller is not to blame if the wicked buyer takes it elsewhere. It is not good for the prestige of Government that orders should thus be evaded. If any action is taken it should certainly be of a kind that can be made effective.

7. I think, personally, that all that can be done at present is to restrict cultiva- tion, and I would begin west of the Salween where the difficulties are not so great as in Kengtung. If, however, it is held that smuggling by Chinese subjects into China is a matter which the British Government must take up, I would advise that wide notice be given of the proposed course of action, and the date from which it will come into force. Large sums of money are advanced by Chinese to secure supplies of opium, which they would lose if the traffic were suddenly stopped.

ANNEX 4.

Mr. Thornton (Superintendent, Northern Shan States) to the Assistant Secretary to the Financial Commissioner, Burma.

July 24, 1919. WITII reference to your endorsement, dated the 4th July, 1919, I have the honour to state that I agree with the views expressed by Mr. Stirling in his letter, dated the 14th July, 1919, to your address, that the suppression of opium smuggling into Yunnan by preventive measures is at present both impracticable and impolitic. The whole question of opium in the Shan States is very complicated. In my opinion, the essential solution lies in the suppression of cultivation of the drug, and, until it is clear what is the effect of whatever action is approved to accomplish that end, it is practically impossible to devise measures for the suppression of smuggling. If we succeed as we propose in controlling the drug at its source, there will be the less occasion for preventive measures, but it is quite impossible to suggest what preventive measures should be taken until it is clear how far the provisions of the scheme of control are successful or otherwise.

It is quite certain that, unless there is a radical change in the attitude of the

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