CO129-471 - Public Offices - 1921 — Page 630

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the inability of the Central Government, depending as it does for its existence upon a careful compromise with contending military forces, to compel the latter to observe its commands. In many cases the provincial authorities are in an equally powerless position. Not only are there hostile forces within their nominal jurisdiction, but the pay of troops is so much in arrears that mutinies and the desertion of armed bands present a constant menace to authority and safety unless funds are forthcoming from some source to meet the military obligations of the provincial Governors. The remedy. with growing frequency, is that of cultivating opium to increase the revenue. Even where no political need exists, the long established Chinese tradition of regarding public office as a means to the acquisition of personal fortune suffices to induce officials, often free from central control, to connive at and participate in the present widespread growth of the poppy. It is argued by the Anti-Opium Association that the large quantity of opium still reaching China from abroad is instrumental in causing this indifferent official attitude; it seems far more probable that the recrudescence of cultivation is attributable to the fact that the prohibition of Indian opium has given Chinese opium a monopoly value.

87. The main opium problem, therefore, so far as British interests are concerned, centres now upon the growth of opium in China, more especially in the provinces of Kweichow, Yunnan and Szechuan. British interests are affected in four ways:-

88. (1.) The illicit transportation of the drug from these provinces to those in which greater scarcity lends it an enhanced value, is most easily accomplished by the native crews of ships upon the Yang-tsze and West rivers, and the majority of these ships are British owned. Hardly a boat passes down the Yang-tsze without conveying its quota of the forbidden drug.

89. (2.) The onus of preventing this smuggling falls on the Customs service, so largely officered by British subjects, and the service is becoming demoralised under the increasing burden of the task.

90. (3.) In many cases native agents of British firms are indulging in this forbidden trade under the protection of the British flag. The danger also exists that actual British subjects may become involved.

91. (4.) A perpetual source of friction is created with regard to the execution of the treaties. This is exemplified by the case of a British ship which was searched for opium by the Chinese authorities at Liuchou, on the ground that no British consulate existed nearer than Canton to conduct the search.

92. With regard to (1), under the annual guarantee (given by the British shipping companies to the Customs) every ship must be searched by the ship's officers for opium at least once on every voyage. Search is, however, becoming dangerous owing to the determination of the crew to avoid its detection. Not only have cases occurred of European officers receiving personal injury, but of the ship's machinery being tampered with to occupy their full attention. While these officers are thus held responsible for, they are powerless to prevent, the smuggling of a crew which, owing to the rapidity of fortunes made, can contemplate dismissal with equanimity. Dismissal is in fact useless, for the new crew will inevitably continue the old practices. On the other hand, the punishment inflicted on the smuggler by the Chinese officials is entirely ineffective. It invariably takes the form of a fine which merely constitutes the running expenses of a highly profitable trade. Under these conditions, so long as opium is cultivated in large quantities in China, it is impossible for shipping companies to prevent their vessels being used for its transportation. Yet cases occur in which ships with opium on board have their extra-treaty privileges suspended and renewed only on the payment of what constitutes a fine. These quasi- fines imposed by the Chinese customs service are far too small to serve any other use than that of maintaining appearances. For example, the Loongmow," on which 13 tons of opium were found, paid 600 dollars; while for the return of a smaller quan- tity seized from a passenger by the chief officer, the former offered 5.000 dollars. Apart from the infliction of these fines and the destruction of opium discovered, the only preventive action remaining to the customs official is that of arresting men caught with contraband amongst the crew. As all members are invariably working in combination, the practical results of such arrests are abortive. The crew merely becomes shorthanded and the company is again unfairly penalised. It is plain that under present conditions British shipping companies are being held responsible for conditions which are entirely beyond their control.

93. The Chinese Customs service is placed in an equally unenviable position. Unorganised for what is really police work on a large scale, it is called upon, with a

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small staff urgently required for other purposes, to control and suppress a traffic which is deliberately fostered by the de facto Governments in the provinces. In many cases its officers are subjected to the demoralising effect of receiving seizure rewards far in excess of their pay. In consequence work other than that of detecting opium becomes scamped and neglected. The remedy, however, is not easily supplied, for if seizure rewards be withdrawn, there would be a grave temptation for men who have grown to regard them as annual income to replace rewards by the smuggler's bribe. It must furthermore be apparent to the official who owes half his emoluments to the activities of the smuggler, that the latter's complete extermination is opposed to his interests. But, however zealous the customs official may be in the execution of his duty, the fact that he is not empowered to inflict an adequate punishment upon the detected smuggler, reduces his zeal to impotency. In fact, it is arguable that be is actually defeating his own end. for by destroying a portion only of opium, he is lending a monopoly value to the remaining opium so great as to attract more opium traders than would otherwise have been the case. Placed in such an entirely false and farcical position, it is more than probable that the traditional high standard of efficiency of the Customs service will be affected.

94. To this serious condition, as was pointed out at the conference of British Chambers of Commerce in China, there appear only two possible solutions; either to inflict far heavier punishinent for opium cultivation in China, or to legalise opium under a system of licences.

95. With regard to the former method, it may be mentioned that inducements to produce opium, and facilities for concealing its production, are less than in the case of counterfeit coin. As fear of execution is sufficient, despite the present disturbed condition of the country, to make the latter comparatively rare, it may be concluded that a similar punishment applied to opium cultivators would exercise a tangible influence on their reduction. The present system of exacting fines, on the other hand, while in no way acting as a preventive to the opium cultivator, accustoms the local official to regard him as an indispensable source of revenue.

96. The practical advantages which might accrue from legalising opium are two: (a) there would arise a class of honest merchants who, having interests opposed to those of the smuggler, could be relied upon to co-operate with and assist the maritime customs official; and (b) the fortunes at present acquired by the smuggler would be converted into revenue for the Central Government. It has been suggested that licences should be issued to producers, transporters and the consumers of opium, the latter being gradually reduced with a view to the eventual eradication of opium. It is certain, however, that actual legalisation of production and consumption would meet with very severe resistance from sections of both British and Chinese public opinion. a resistance which the smuggler would find it in his interests to intensify.

97. Even without legalisation it has been found possible to ease conditions upon the Yang-tsze by securing a private assurance from the inspector-general of customs that, as a temporary expedient to meet the urgent needs of this period of administra- tive disorganisation and financial chaos. instructions shall be issued to cease penalising shipping companies for the smuggling of their crews. This position must be safeguarded by formally notifying the Chinese Government that we must under present circumstances decline absolutely to recognise its rights to penalise in any way British ships on which opium is discovered, except under the order of a British court. It is apparent, however, that this does not offer even a partial remedy for the demoralisation of the customs service, for which nothing less than the removal of restrictions against the transport of opium upon the Yang-tsze and West rivers could suffice. The latter course has the serious disadvantage that it would create British vested interests in opium transportation which at a later date, when the country is less disturbed, might serve as a serious obstacle in our anti-opium policy.

98. Although British interests are not directly affected by the supply of opium and other drugs reaching China from abroad, its rapid increase deserves attention. No section of China's gigantic frontier is free from the opium smuggler. Southern Siberia and Northern Manchuria are important sources of opium, and the railway is a quick and easy way of getting it to the most profitable markets in the republic. The export of Indian opium to Japan has doubled in the last five years, and no doubt exists that Shantung and Manchuria are used as a dumping ground for this increased supply. Hong Kong and Macao also import far more than is locally consumed, and present insurmountable difficulties to the customs service in the way of controlling small launches, as no seizures can be made in British or Portuguese waters. Indo- China has quadrupled its import of Indian opium in the last five years, doubtless

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