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was done in this direction, although it is probable that the reports of foreign observers expressed an optimism unwarranted by the facts. Very large stocks of opium, both raw and prepared, were carried, and not long after the final exclusion of Indian opium the internal restrictions became a dead letter throughout the greater part of the country. Since the earliest days of the opium question in China the principal concern of the Provincial Governments has been to eradicate, not the opium habit, but the Indian opium habit, and the failure to attain this end, until India cooperated, may be attributed to the fact that public taste vastly prefers the Indian to the home-grown drug.

4. In the present state of Chinese public opinion the only way to diminish or to put a stop to the use of opium is to diminish or to put a stop to the production of opium. The first Article in Chapter I of the Opium Convention requires the con- tracting Powers to enact effective laws or regulations for the control of the production and distribution of raw opium, and, except in so far as India is concerned, this obligation is for practical purposes entirely disregarded. There is no effective control over the production and distribution of Chinese, Persian, and Turkish opium. The enforcing of Article I of the Convention must be antecedent to the enforcing of Article 6 of the Convention, and, while China continues to provide its population with opium in limitless quantity, Hongkong, in attempting to prevent consumption by those Chinese who happen to be within its borders, is merely beating the air.

5. The Committee estimates that approximately equal quantities of Government and illicit opium are consumed in the Colony. An increase in the Government selling price would probably result in a pro tanto substitution of illicit for Government opium. Any substantial decrease in the Government selling price would almost certainly result in a substantial increase in consumption generally, as Government opium is of much superior quality, and, if it were available at the price of illicit opium, the demand would be very greatly increased.

6. The Committee has carefully considered the question of increasing the number of Revenue Officers and of providing more drastic penalties for trafficking in and using illicit opium, and it is satisfied that the measures already taken by the Government go as far as is reasonably possible in this direction. The Chinese Community has objected time and again to the methods of search now employed, methods far more drastic than any used in the United Kingdom. Public opinion is at least not emphatic against the smuggler, and the Chinese searcher declines to make himself unpopular, except for an adequate consideration. It is known that the smuggler not infrequently outbids the Government for the Revenue Officer's services. As regards penalties, these are already of exceptional severity, including heavy fines, long terms of imprisonment, and frequent banishment.

7. The first two resolutions of the Advisory Committee are to the effect that the opium business should be a Government Monopoly and that retail sales should be made only from Government shops, by persons on a fixed salary, without any com- mission on the amount of business done.

It is understood that the Government, which already controls the opium business in Hongkong, is making arrangements on the lines suggested in connection with retail sales.

8. The third resolution of the Advisory Committee recommends "that a uniform maximum limit should be fixed for the amount of prepared opium placed on sale for consumption, calculated according to the number of the adult Chinese male population".

A measure such as this would result in the buying up and hoarding of stocks by speculators, who would re-sell at an enhanced price. Persons unwilling to pay the price would substitute illicit for Government opium.. It would be preferable to limit sales by raising the price rather than by restricting the quantity on the market, but neither expedient would diminish consumption, as illicit opium would take the place of Government opium.

The Committee understands that in 1920 the Government of the Straits Settlements attempted to reduce consumption by limitation of supplies and that after a few months it found it necessary to abandon this policy. The Government of the Punjab's experience in this connection is set out in paragraph 31 of the Report on the Excise Administration of the Punjab during the year 1921-22. It is there stated that measures such as the restriction of supply of excise opium lead to smuggling "and simply aggravate the