APPENDIX.

Hong Kong General Chamber of Commerce,
Hong Kong, 22nd November, 1882.

Sir,—The attention of the Committee of this Chamber has been called to certain statements recently made in the United Kingdom regarding this Colony, on what must unfortunately appear to the public mind to be competent authority, but which are nevertheless unwarranted and misleading.

The statements referred to are, in the opinion of the Committee, calculated not only to affect injuriously the reputation of the Colony, but to damage its interests by prejudicing the policy of the Home Government and the Imperial Parliament, when dealing with the settlement of questions arising out of the close political and commercial relations which the Island of Hong Kong from its juxta-position must necessarily hold with the Empire of China.

The Committee offers no apology for addressing you on this subject as it ventures to believe that the promotion of British Commercial enterprise abroad in all legitimate channels is one of the objects the London Chamber of Commerce has in view, and, to that end, it is clearly desirable that a true appreciation should prevail, not only among the members of your influential Committee, but throughout the United Kingdom, as to the position and character of British trade and traders in the Colonies and foreign countries.

In the course of an address on the Repression of Crime delivered at the Social Science Congress, recently held in Nottingham, Sir John Pope Hennessy, Governor of this Colony, now on leave of absence in England, is reported to have said—I quote from the Nottingham and Midland Counties Daily Express, of the 22nd September:—“In the little Colony under my government one million sterling changes hands every month in the article of opium. But, with commercial activity and profits, there comes an increase of crime from opium, from its consumption, and from its smuggling. Hong Kong wages a chronic opium war on a small scale with China. A desperate class of men, the opium smugglers make the Colony the base of their operations—they purchase cannon and ammunition there, they fit out heavily armed junks and engage, within sight of the island, in naval battles with the revenue cruisers of the Emperor of China. Sometimes the Emperor’s revenue officers are killed, sometimes the smugglers. Not unfrequently wounded men of both sides are brought into the Colony. All this gives rise to a class of crimes difficult for the Governor to repress, difficult on account of the influence of those who profit by it, whether they are local traders or the financiers of a Viceroy.”

The picture thus sensationally drawn is one which, from its great exaggerations, gives an untrue representation of the state of things prevailing in these waters, and cannot fail to lead to the formation of wholly incorrect inferences as to the relations existing between the population of this island, for the most part law-abiding and pursuing honest and industrious callings, and the authorities of the neighbouring mainland.

Sir John Hennessy states that opium, to the extent of a million sterling, changes hands in this Colony every month, and this assertion as to the magnitude of the trade was obviously made in order to show the vast and wide-spread interests involved in it, and the influential protection therefore likely to be afforded to a traffic which the general tenour of the remarks just quoted cannot fail to lead ordinary readers to suppose is to a very large extent, if not mainly, contraband.

Your Committee will be able to judge from the following facts how far the injurious imputation, thus plausibly insinuated, if not directly stated, is to be justified by the actual position of affairs.

The import of opium from India and Persia to Hong Kong and the whole of China, for the year 1881 was—

of an approximate value of £10,000,000 sterling.

With some slight and unimportant exceptions the whole of this opium, the trade in which it is worthy of note is now practically monopolized by British Indian firms, passes through this harbour, but by far the larger proportion of it can only be classed under the head of Hong Kong trade in the sense in which the traffic through the Suez Canal can be considered as Egyptian trade. About one half of the quantity of opium I have named as the entire import, is immediately sent on either in the original foreign vessels conveying it here, or by other vessels, also foreign, to Shanghai, where it is entered regularly at the Custom House under official foreign superintendence.

Of the remainder, about one half, that is to say, one quarter of the whole, is shipped by foreign vessels to other treaty ports open to foreign trade, where it is duly entered at the Customs. The local trade proper of the Colony, whether for shipment to Macao or Canton by foreign and native vessels, or in native bottoms, to non-treaty ports,—i.e. to ports and places with which foreign vessels cannot trade,—for consumption on the island, and for re-export in a prepared state to California and Australia, or for smuggling purposes, embraces therefore about one fourth of the entire export to China from India and Persia, or say, in quantity about 21,000 chests of an approximate value of £2,500,000, or about £200,000 per month instead of £1,000,000 per month as asserted by Governor Hennessy.

There being no Custom House at this port, it is impossible to obtain thoroughly accurate statistics as to the disposition of the 21,000 chests of opium which form the local trade of the Colony. As regards the local consumption and export in a prepared state, it may be estimated that from 2,500 to 5,000 chests are boiled in the Colony every year, leaving a balance of 16,000 to 18,500 chests to be accounted for. To suppose that this quantity is taken into China by smugglers would be to disregard all the known conditions of the trade and the fact that the preventive service of the Chinese Empire is probably in point of espionage the most carefully organized one in the world. On every road, in every village bordering on a river or waterway, at every port, village, and fishing station along the coast, there is a watchful Customs Station rendering it very difficult for a boat of the smallest size to touch the shore without being overhauled and made to pay levies purporting to be imperial or local dues. To what extent such dues are honestly levied and declared, there is no means of ascertaining. The Customs Stations are believed to be farmed out by the provincial authorities to officials who pay for their appointments, and although a service thus organized would be considered as a demoralized one and its system unreservedly condemned according to Western ideas, it is probable that the receipts of perquisites, and the partial remission of duties by Customs officials who farm the revenue, is a quasi recognized practice acquiesced in by all classes throughout the Empire.

With this system, however, the Colony and merchants of Hong Kong have no concern, and for its results they are in no way responsible. As the vast majority of the junks which leave the mainland with produce or arrive there with imports, undoubtedly obtain from the local Custom Houses port clearances and bills of entry, the large trade, whether in opium or other goods, carried on between this port and places on the coast in native bottoms, being thus subjected to the ordinary fiscal dues levied on the China coast according to the practice of the Empire, is for the most part a strictly legal one.

Smuggling between this island and the mainland in goods other than opium scarcely exists, as an evasion of the low ad valorem duty of five per cent. which is payable on entry at the treaty ports, and is probably the maximum similarly leviable at other ports, would not compensate for the heavy charges which must be incurred by transit over unusual routes even if the ubiquitous Customs officials could be avoided. Opium, owing to its portable character, the facility with which it can be hidden beneath water without serious deterioration, and the high duty imposed upon it, is more readily and profitably smuggled, but the returns which have been received through the Native Custom House at Canton make it nearly certain that the quantity which evades the payment of duty, either at the treaty ports or the ports and places not open to foreign trade, is not greater than 2,000 to 3,000 chests per annum. (See Parliamentary Papers—China No. 2, 1880.) And the quantity thus estimated to be smuggled is not conveyed, as alleged by Governor Hennessy, in junks heavily armed for the purpose, fighting their way to the mainland through the revenue cruisers, but is concealed, a few balls at a time, about the persons, and in the luggage of Chinese passengers by the steamers plying between this port and Canton, and other places on the coast, or in ordinary trading junks and fishing boats of unpretentious character, or fast pulling boats propelled by a number of rowers, or by various devices such as are practised by the persons who evade the duties on tobacco in the United Kingdom. That the revenue cruisers which surround this island keep up an effective blockade which prevents the smuggling of opium on a much larger scale than at present takes place, is probably true, and it is also true that Chinese junks and boats in the estuary of the Canton river, which do not promptly submit to be overhauled by the cruisers, are chased and brought to for examination, if necessary, by being fired upon. The propinquity, however, of this island to the mainland, so far from being a cause of injury to the Chinese Customs Revenue, operates most advantageously for the collection of fiscal levies upon the foreign trade of the southern coast of the Empire. Were the island situated at a greater distance from the mainland than it is, or did not exist in its present conditions as a free port under a foreign government, the difficulties which would be placed in the way of the Chinese authorities, when engaged in checking smuggling in opium, would be much greater than they now are. Opium in that case would probably be shipped in native vessels from more distant depÔts, such as Singapore, Saigon or the French mediatized territory of Tonquin, to Chinese ports and places, and it would be impossible for the revenue cruisers to watch the entire line of their own coast as effectively as they are now able to blockade this island in which the trade is centred and controlled.

There is, therefore, no ground for Governor Hennessy’s statement that this Colony is engaged in chronic war with the neighbouring mainland, or for his implied imputation that the course of its trade is injurious to the Chinese fiscal revenue. On the contrary, the facts of the case show that the physical conditions of the island of Hong Kong not only afford the ready means by which the Chinese Government is enabled to protect its legitimate revenue, but also unfortunately place it in the power of the authorities of the province of Quangtung to surcharge the trade in foreign goods, carried on in native vessels between Hong Kong and the southern ports of China, with additional taxation in excess of that authorized by the foreign treaties.

With the view to make a representation to H.M. Government in support of which it may hereafter be necessary to invite the good offices of your Committee, this Chamber is now engaged in an investigation into the facts, so far as they can be ascertained, relating to this alleged surcharge of duties upon the Colonial trade for the collection of which, as well as for the prevention of an illicit traffic in opium, there is reason to believe the blockade of this island by Chinese revenue cruisers is maintained.

So much as regards the general conditions of the trade of the Colony which evidence the grave misrepresentations contained in the Nottingham address, but in order to show conclusively, by official returns on matters of fact, the groundlessness of the specific accusation made by Sir John Pope Hennessy, your attention is invited to the annexed copies of correspondence, with its enclosures, between the Colonial Government and the Committee of this Chamber.

In response to the request of the Committee, the Acting Colonial Secretary under the direction of His Excellency the Administrator has furnished the Chamber with the following documents, viz.:—

The Colonial Treasurer’s Report on the Opium Trade for 1876, confirms the figures of the approximate estimate made by this Chamber from independent sources and given above, as to the probable quantity of opium smuggled into China from this Colony.

The Harbour Master’s Return shows that there is no special class of vessels fitted out in the Colony and heavily armed for the purpose of opium smuggling, as alleged by Governor Hennessy, and in the five cases cited in the report which comprise the whole number brought before the Marine Court in the course of five years, it will be seen that the quantity of opium found in the vessels charged with being engaged in illicit trade was so inconsiderable, as to make it obvious that the concealment of opium took place in each case in an ordinary trading junk. It is also clear from this Return that nothing is known in the Harbour Master’s Department of the armed organization for the purpose of opium smuggling which is stated by Governor Hennessy to carry on a chronic war with the Empire of China.

The return from the Captain Superintendent of Police dealing with the entire number of cases reported to the police authorities during the years 1878 to 1882 (inclusive) of seizures by Chinese Revenue cruisers and affrays between the cruisers and native vessels on the neighbouring China coast, is instructive.

The number of cases is 23, but of these only 6 are reported to be connected with the opium trade and the value of the opium seized varies from $3 in one case to the maximum amount in another of $800, showing, in confirmation of the Report by the Harbour Master to a similar effect, the comparatively unimportant character of the opium smuggling which prevails in these waters, and the absurdity of the allegation that there is a large contraband trade conducted in heavily armed junks fitted for the purpose in this harbour.

The remaining 17 cases of seizures by revenue cruisers during five years do not appear by the returns to have been connected with opium; 7 of them were salt junks, 1 sulphur and saltpetre, 3 general cargo, and 2 sugar. In 4 cases the particulars of cargoes are not stated.

The return shows the number of casualties with fatal results reported to the police as having occurred in affrays between native vessels and the revenue cruisers during the period of five years under review. Such casualties have been 8 in number, but not one of them appears to have had any connection with opium smuggling, or to have arisen out of any case of contraband trading with which this Colony was concerned.

In August 1878, a fisherman on the Hong Kong shore was accidentally killed by a shot fired by a revenue cruiser when pursuing a junk ultimately seized for some breach of Chinese regulations with general cargo on board.

In May 1879, three men of a revenue cruiser were killed in an affray with a junk carrying salt. As salt is not produced or prepared in this island, this affray was not generated in the Colony or within Colonial waters. The preparation of salt in China is conducted as a very strict monopoly by means of Government licenses, and trade in it other than by duly authorized persons is contraband. Serious affrays between salt smugglers and revenue officers are well known to be common throughout the Empire, they are frequently alluded to in the Peking Gazette, and in the case referred to in the Police Report, the junk must have been passing from one part of the territory of China to another part outside of British waters.

On 28th November 1881, a man was killed in a boat which was conveying two gentlemen of this Colony who were returning from a shooting expedition on the mainland. Passing by a Customs Station on the Chinese side of the channel the boat was ordered to heave to; not doing so promptly, musket shots were fired at it and one of the crew was most unfortunately killed. In this case there appears to have been no smuggling attempted.

In April this year a man was killed on board a rowing boat in the narrow channel separating Hong Kong from the mainland, and in June last two men were killed outside British waters in a trading junk carrying sulphur and saltpetre, which are contraband articles of trade in China. In neither case does it appear that opium was concerned.

With reference, therefore, to Sir John Pope Hennessy’s allegations, which were to the following effect:—

a.—That this island is the base of operations for a class of desperate men who carry on a large contraband trade in opium with China;

b.—That for the purpose of carrying on that trade, junks heavily armed with cannon are fitted out here and wage a chronic war with the neighbouring Empire;

c.—That these junks engage, within sight of the island, in naval battles with the Chinese Revenue cruisers resulting in large loss of life on both sides;