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very great. In dealing therefore with a matter which affects great industrial interests in British India, and the Native States, and the revenues and trade of the Eastern Colonies, it is imperative in justice to those whose in dustry and trade are affected to proceed gradually and tentatively, and not too far in advance of the steps taken by Chiua, so that the interests of our own nationals may not be sacrificed without corresponding visible and tangible results in China. and we may assure ourselves alike of the permanency of the movement, and of the Central Government to carry it through in an Empire with so little cohesion as China.
THE TWO ESSENTIAL PROBLEMS.
The two really essential problems, which in my view China has to solve if she intends to carry out her declared intention are :—
(a.) The restriction and ultimate abolition of the cultivation of the Poppy in China.
(b.) The provisian of a revenue to replace that now raised on opium.
When these two problems are in a fair way of solution it may justly be said that China has set a standard which is worthy of emulation, and has proved herself to be in earnest.
RESTRICTION OF PRODUCTION.
THE HONGKONG WEEKLY PRESS AND
exists in Manchuria. The imposition of such a tax would enable the Government to cheapen transport for crops of less value, and to grant some compensation to poppy growers who take up other crops in lieu of the poppy.
Sir A. Hosie estimates that a crop of wheat per acre is worth £4.5.6 as against £5:16.8 for poppy (viz., 26.71 per cent. loss) but there are crops possibly of more value than wheat suitable for poppy land such as tobacco, cocoa, or rubber. Mr. Fox, lately Consul in the poppy-growing province of Szechuan, says that the tobacco is of high quality, and suggests as substitutes ramie, tea, silk and vegetable oils. It is worthy of note that as food stuffs replace the poppy, the price of food decreases, and with it the perennial scourge of famine from floods etc, and the necessity of the embargo on the export of rice. It would be of benefit to China if an expert agriculturist were to advise as to the most paying substitutes for the poppy.
SUPPLY OF MEDICINAL OPIUM.
The whole subject of opium production is a difficult one. The world requires a large quantity for medicinal purposes, and in order that the countries which produce, or are capable of producing, the drug may guard against its export and use for illicit pur- poses, it would appear to be necessary that the output should be made a Government monopoly and the Government of the country of consign- ment notified of all shipments so that it may adopt measures for controlling the sale, -other- wise, as Mr. Leech points out, new countries will grow opium when the Indian export is restricted. For China is not the only country which has cause to fear the effects of the misuse of opium, and its derivative morphine. The United States of America, it is said, imports seven or eight times as much as is required for medicinal purposes, and has lately passed a law restricting this import, as also has Canada. It will be open to the non-producing countries to follow this lead, and by arrangement with the countries of origin to control the import for medicinal purposes in whatever way may appear best calculated to guard against misuse, viz., either by a Government monopoly, or by the institution of a system of permits to authorised wholesale dealers, who may sell only to licensed druggists.
[March 15, 1909.
THE "FARM".
The most effective of these, both for restric- tion and control, has, as experience proves, been the institution of a monopoly leased for a specified period of three years to a "Farmer", for the sole right to prepare opin for sale, and to sell it, in the Colony. His right to import prepared opium without declaration and to export it were also recognised. The farm is a lucrative business and its acquisition therefore is the object of keen competition, and the Government derives from the sale of the Monopoly a sum equal to nearly a fourth of its entire revenue. Seeing that the farm is a restrictive agency this revenue is entirely legitimate and in any case is no more subject to criticism than the licence fees derived from public houses here or in England. The Govern- ment derives no other revenue from opium, except the negligible licences to divan keepers. I have already in a previous paragraph quoted the conditions imposed by the terms of his licence upon the Farmer, and the privileges reserved to him by Ordinance. In order to protect his Monopoly the Farmer has to employ a large staff of detectives and to offer rewards to informers.
ENHANCES PRICES
In order to pay for these and also the high fee to Government he is compelled to enhance the retail price of opium, and this enhancement has been progressive in each triennial period for which the farm has been let. In 1900 the price of prepared opium in Hongkong to the smoker, was $1.50 per tael: In 1904 the next Licences put up the price to $3 which was again inceased in 1905 to $3.30. Thus the amount of opium purchasable for 10 cents has been as follows between the year 1896-1904 :--
1-5, 12, 1, 8, 57, 4, 3, mace (13 oz.) 175, 195, 228, 233, 243, 293, 331, thousand po-
pulation.
The price in Hongkong is therefore much higher than in the neighbouring bity of Canton. In Hongkong it varies from $3.30 to $3.50 per tael while in Canton it is from 80 cents to $1.53.
CHECKS SMUGGLING.
As regards restriction of cultivation. The fact must not be lost sight of that of the total quantity of opium consumed in China-estimat- ed at 22,588 tons in 1908-1ths grown in China itself, chiefly in the Province of Sze- chan (66 per cent, of the total) which is one of the most densely populated of the provinces of China (45 millions) into which no foreign opium is imported, and in which as Mr. Cle- menti has shown, the precentage of smokers is more than double that in the rest of the Em- pire. Out of her enormous production China in fact (as I have shown) exports opium to Indo- China and I believe to Siam, where the con- sumption shews no decrease though the King in a manifesto on his birthday declared his desire to restrict it. This is irrespective of the amount illicitly exported which is probably con- siderable. In Szechuan and Yunnan the cultiva- tion of opium is a great agricultural industry, and its arbitrary abolition would inflict a great
This fact naturally encourages smuggling injury on the population. In this connection
into the Colony, and since Hongkong, being a it is of interest to note that Mr. Clementi
Free Port, has no Customs Preventive Service shews in his translation of the Article on the So far as China is concerned, the bargain it would be impossible to check the smuggling Poppy from the Chinese Encyclopaedia that the with India and the similar restriction of import of raw or of prepared opium as effectively as the plant was known and cultivated in China for of Persian and Turkish opium relieves her of Farmer can do it when his own pecuniary medicinal purposes as early as the beginning of all difficulty as regards the part of her con- interests are involved, for it must be remembered the 9th Century, and the use of opium was pro-sumption which is imported. The remedy for that the Colony of Hongkong consists of an bably introduced by the Arabs as early as the the other which is home-grown is in her own island and a peninsula, around whose shores are middle of the 15th Century.
hands. The bulk of the world's supply of fleets of trading and fishing junks, while opium medicinal opium comes from Turkey, for Tur-being light and of small bulk is easily concealed. kish opium contains from 9 per cent. to 12 per cent, of Morphia as against 4 per cent. or cent. in Indian opium. The average export for the last 6 years is 718,327 lbs. and there. is at present no Government control. The total export from Indiá is put at 67,000 chests, of which 51,000 goes to China, and will presumably disappear in the course of 10 years. There remains 16.030 chests as India's contribution to the medicinal supply of the world.
HOW GAUGE RESTRICTION IN CHINA.
Relative to the restriction of cultivation the point naturally arises: How is India at the end of the trial period of three years to ascertain whether China has fulfilled her part of the contract and has made a corresponding reduction in the internal production? Since there is no proper survey, and no accurate record of the area under poppy cultivation, and China refuses the assistance of foreign surveyors, it is clear that existing statistics are very nebulous and no exact demonstration of decrease can be expected. The only rough and ready method therefore of gauging whether China has proportionately decreased cultivation during the three trial years, is to judge by the current price of Native Opium in China. If it rises considerably as it must do with a decrease of cultivation, it will be fair to assume that the alleged reduction has really taken place, allowance being made at the same time for a fall in prices due to decrease of smokers, and decrease of illicit export (which with a rise in prices of Native Opium becomes less profitable). I lay stress on the necessity of this rise in the price of opium in China for until its price is on a parity with that obtaining in the Straits and Hongkong, those Colonies are justified in claiming that the restrictive methods of China are less effective than their own, and in resenting the couse- quential smuggling from China to British territory.
SUBSTITUTES FOR THE POPPY,
It would seem that the best way of reducing the area of cultivation is a Poppy Tax on all lands devoted to the growth of the poppy, which could be gradually increased until the cultivation became unprofitable. Such a tax already exists is Shansi where poppy land is rated at about three times as high as any other crop. It also
HOW REPLACE OPIUM REVENUE.
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As regards the second of the " essential pro- blems -the raising of a revenue to replace that derived from opium, it would be wholly beyond my province to make suggestions in a matter with which the Chinese Government is alone competent to deal. Already in some provinces à Salt Tax has been imposed,-in others fees for permits to buy opium. The land-tax was declared by the Edict of 1713 to be immutable for all time, though our experi- euce in the leased territories of this Colony has shewn that it can be increased without hardship. But China has many other resources, such as development of minerals, a tax on spirits and the purification of her system of collection of taxes.
RESTRICTION IN THE COLONY OF HONGKONG: So far I have dealt with the aims of the Chinese Government, and the direct assistance afforded to it by India and Hongkong in its efforts to restrict the importation (legally or illegally) into. China of raw or prepared opium. I will now pass in review the methods adopted by the Hongkong Government to restrict and control the consumption of opinm within the Colony. I will add some proposals by which restriction may be made still more effective in the future.
The Farmer can employ spies and informers. both to check smuggling and to detect illicit boiling of opium, but such methods should, when possible, be avoided by a Government on any extended scale. The Government, however, renders him all possible assistance and issues search warrants on information supplied by the Farmer. The Farmer's Excise Officers also search all persons landing in Hongkong, except a few exempted for public service. This search is most unpopular amongst the Chinese and exemption incidentally stimulates men to come. forward for public service. The Farm is dis- liked in consequence of the search which, how- ever, it would be equally necessary to maintain if the Farm were abolished, (in which case the odium would be incurred by the Government), unless restriction of opium ceased. Beyond doubt the creation of a Monopoly in Chinese hands is the most effective method conceivable for controlling the smuggling, sale, and use, of opium in the Colony.
INCREASES REVENUE.
A monopoly by Government was tried and resulted in a decrease in the receipts in the second year to less than half those of the first year, due to the impossibility of coping with the smuggling and illicit "preparation" of opium. The revenue lost by Government was therefore so much additional profit to the smuggler, instead of going to the Farmer who provides the Preventive Service and to the Government which uses its profits for the maintenance of Police, Sanitation, Education, etc. A Govern- ment monopoly is moreover more likely to tend to venality and corruption of subordinate officials. In view of what I have said it cannot be justly argued that the Government delegates its functions to an individual and loses prestige,
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