Sessional_Paper_1909 — Page 124

Further

restriction.

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The restriction of the export from India will probably enhance the value of raw opium, and this with the restrictions already alluded to, and others to which I am about to refer, will probably still further reduce the tender in 1910. This in itself constitutes a heavy contribution on the part of the Colony to the policy inaugurated by His Majesty's Government, at a time when, owing to a prolonged depression in trade and to other causes, it is in considerable financial difficulties. Any serious decrease in revenue makes it, of course, more difficult to maintain effective Police supervision, without which the Farmer would be unable to protect his monopoly and prevent smuggling of opium into the Colony, or from the Colony into China.

There is no evidence to shew that the Farmer in any way endeavours to pro- mote the consumption of opium. No methods of inducement or advertisement are used. Opium divans are not in any way made attractive by meretricious devices as are public houses in England, and sales are in no way pushed. *

I have endeavoured to shew that the system of farming the monopoly of the right to prepare and sell opium results in enhancing the price of the drag and thereby restricts the consumption (the average price of the various grades of the raw drug is only about of the average retail selling price in Hongkong); that it is a potent and indeed the only means of checking smuggling either into the Colony or from it to China; and that it produces a revenue that is perfectly legitimate and is expended in providing a Police Service, etc.

In order to give effect to the policy of His Majesty's Government it is feasible proposals for to enhance the restrictions imposed upon the Farmer. Prior to the year 1891 he

was allowed to draw 3,650 chests of opium per annum in order to prepare

* and sell it. Since that year the number has been fixed at 1,800, and though it is true that he has not as a matter of fact drawn anything like this amount, it is impossible, except with his consent, to reduce this number, until the present contract expires in March, 1910:

(a.) The number could then be reduced by half, viz., 909, and if China perseveres in her efforts it may in future years be progressi ely diminished, though for reasons which I will presently give I think it of more than doubtful utility to abolish the supply altogether. Since the population is rapidly increasing this constitutes a very substantial decrease. With the decrease of the export from India and the presumable cessation of the export from China, the supply will moreover be greatly curtailed and the cost proportionately increased. The Farmer is willing to agree to an immediate decrease (from March 1909) to 1,000 chests with 200 extra, if required, for bond fide export to places other than China.

(b.) If the Farmer for the purposes of his operations should import any prepared opium he must declare it (as also opium dross, dross opium, and "halan "), and an equivalent deduction will be made from the quantity of raw opium he is allowed to draw.

(c.) He may similarly be called upon to report his monthly sales of prepared and dross opium, whether in the Colony on exported, and in the latter case their destination.

(d.) He would be prohibited from selling any opium to wonen or

children, whether for their own use or not.

These restrictions would of course decrease the value of the farm, and there- by involve a loss of revenue to the Colony, which would however be expended in a practical effort to give effect to the policy of the Home Government.

There are other important steps which have been taken by this Colony to control and restrict the use of opium, both as regards the question of divans, and (most important of all) as regards the importation, sale, and use, of morphine, and compounds of opium (for eating), as well as cocaine, including moreover recent action with a view to controlling the transit trade in the former to prevent smug- gling to China. These matters are, however, best dealt with under the sub- sequent paragraphs relating to Divans, and Morphia, &c.

* The Straits Commissiou say (Report § 155) that this was clearly proved" and was surprising looking to the commercial aptitude of the Chinese. The Farmer does not extend sales by giving bouuses, or lower rates for wholesale purchases and rarely gives credit but simply supplies a demand and does nothing to stimulate it ".