SYSTEM OF REGULATION OF PRODUCTION.
I.—The two main centres of opium production in India are—
(a) Bihar in the Province of Bengal, and the districts of the United Provinces of Agra and Oudh lying along the Gangetic Valley and north of it, the produce of which is termed Bengal opium, and
(b) a large number of Native States in the Central India and Rajputana Agencies the chief producing States being Gwalior, Indore and Bhopal in the former and Mewar in the latter.
The produce of these regions is known as Ma/wa opium, a term which is also applied to the produce of the Native State of Baroda and of the small British territory of Ajmer-Merwara.
2.—The production of Bengal opium is a Government monopoly and is carried on under the superintendence of the Opium Department. The department is divided into two Agencies: one for Bihar with headquarters at Patna, and one for the United Provinces with headquarters at Ghazipore.
3.—The cultivation of the poppy in the Bengal opium tract is regulated by Act No. XIII of 1857. It is permitted only under license, the total area to be sown being fixed by the Government from year to year. The cultivator, who receives advances when required to assist him in production, is bound to sell the whole of his outturn at a fixed rate to the Government. The crude opium so made over to the Opium Department is conveyed to the two Government factories, one at Patna and one at Ghazipore, and there manufactured into the finished article.
4.—Malwa opium, as observed above, is practically entirely produced in Native States, and in those States its production is not under the control of the Indian Government.
AREA UNDER CULTIVATION AND AMOUNT PRODUCED.
5.—The total area under cultivation in recent years under the Bengal monopoly system is given with certain further particulars in Statement I. In 1906-07 nearly i% million cultivators obtained licenses ; 564,000 acres were sown and yielded opium; and the produce amounted to more than million lbs.
6.—The total area under poppy cultivation in the Malwa States cannot be given, as these States have no adequate system of survey and land records, and trustworthy statistics are therefore not obtainable. Certain returns, which must be accepted with reserve, are, however, supplied for the Central India and Rajputana Agencies, and these indicated in 1906–o7 a total area under poppy cultivation of about 247,000 acres and a total production of 33/4. million lbs. For 1907–o8 the corresponding- figures were 192,000 acres and a little over 2% million lbs. The acreage and production, as returned, and in fact also, are very fluctuating, being much affected by seasonal conditions. The quantity of Malwa opium which leaves Native State territory for consumption in or export beyond British India is known; the fig-ures are given in Statement II.
RESTRICTION OF AREA IN CONNECTION \VITH THE REDUCTION OF EXPORT.
7.—The fig-ures given in paragraph 5 for the area under cultivation under the Bengal system, and the resultant figures for the amount of opium produced, no longer represent the standard area and outturn. A reduction of area was ordered in 1906 in view of the probable agreement with China, and this has been followed by large progressive reductions in succeeding years. This will be seen by comparing, as below, the area producing opium in 19°5-06 and the corresponding figures for the two following years. It must be noted that the Bengal cultivation besides supplying China, also provides the opium exported to other countries and the great bulk of that consumed in British India itself:—
Area yiela'ing Opium.
19o5-06... ... 613,996
i906-07... ••• 564,585
It is believed on the information so far obtainable that the actual area sown in 1908-09 will be about 456,000 acres.
8.—As already stated the cultivation in the Malwa States is not under direct control, and it rests with the States themselves and their cultivators to adjust their output to the reduced demand, the action of the Government of India being confined to limiting oversea exports of Malwa opium within the maxima agreed upon. It may be noted here that the difficult and complex situation in regard to the Native States which arises from the agreement with China is now under the consideration of a Committee appointed by the Government of India.
PRODUCTION OUTSIDE THE BENGAL AND MALWA TRACTS.
9.—The cultivation of the poppy is also permitted in the Punjab, and (to a nominal extent) in one or two other areas within British India, and is carried on in the Hill States of the Punjab, in Afg,hanistan, in Kashmir, in Nepal and in the Shan States of Burma. The area and production in these States are not known and cannot be estimated. The cultivation in the Punjab in igo6 amounted to 7,355 acres, but will quickly become negligible as it has now been decided within a short period to abolish such cultivation almost entirely, when undertaken for the purpose of producing opium. The existing cultivation is regulated by a licensing system and subject to an acreage duty ; and the cultivator is bound to make over the produce to a licensed vendor.
fo.—The cultivation of the poppy is prohibited in other British provinces and also, by ag-reement with the ruling- Chiefs and subject to various conditions, in other Native States within the borders of British India.
MODE OF CULTIVATION AND COLLECTION.
I I.—The following brief statement of the mode of cultivating and collecting the drug in the Bengal monopoly area is based on one of the standard accounts of the subject. Sowing takes place between the middle of October and middle of November, the land having previously been carefully prepared. After about a week when germination takes place the soil is prepared for irrigation, which begins as soon as the plants appear above ground and continues at regular intervals until the crop is matured. The seed has again to be sown in those places in which germination has failed, and at a later stage the young plants are thinned and weeded, possibly two or three times. Flowering ordinarily takes place in about 75 to 8o days after germination, and the petals when fully matured are removed one by one, and are purchased in due course by the Opium Department, and used (as "leaf") in the preparation of the outer shell of the opium balls. In another 8 or io days the capsules are sufficiently advanced for the extraction of the drug-. Each capsule is then perpendicularly lanced, usually on three or four successive occasions at intervals of two or three days, the time selected for the process of lancing being the afternoon and for the collection of the drug the following morning. Collection may begin about the end of January and may extend to the beginning of April according to the locality and other circumstances.
I2.—Fresh opium as collected contains an excess of moisture, but by the draining off of a portion of the liquid content of the crude drug, and by other manipulation while it remains in the hands of the cultivator, its consistence is raised more nearly to the standard at which it is desired to manufacture. The fluid thus obtained, which is known as "pasewa," is purchased by Government and used in binding the "leaf" to form the outer shell of the completed opium ball. The finer stalks and the leaves of the poppy plants are also collected and pounded up for "trash" which is purchased by the Government to form the packing of the chest in which the balls are exported.
13.—The whole of the plant is eventually utilised. The young seedlings which are first weeded are said to be eaten, and the thicker parts of the stem, which are unsuitable for breaking up into trash, to be used for fuel or thatching-. The seeds are used among other purposes for the production of oil. The value of poppy seeds exported in 1906-7 was L438,482 and in 1907-8 L834,739.
14.—The principal point of difference in the collection of the Malwa drug- is the use of linseed oil in its handling at the time of collection as well as during the process of manufacture. The drug is also liable, owing to less careful methods of collection, to contain accidental impurities such as flower stamens, petals and pieces of pod.
15.—In both Bengal and Malwa the average production is subject to wide variations as the yield is readily affected by the conditions of moisture, heat and wind. Thus in the Bihar Agency the annual average yield per acre has varied in the 20 years ending with i906-7 from a maximum of 177 ozs. to a minimum of 91 ozs., and in the Benares Agency from 2o3 ozs. to 108 ozs.; while in the Malwa States the production has in recent years been repeatedly affected adversely by unfavourable climatic conditions,
i6.—The soil in which Bengal opium is produced and the conditions in regard to water supply, communications and available markets are such that it is believed that the transition from poppy to other crops can be gradually effected in at any rate a large part of the poppy area, especially in view of the fact that the cultivating profits from poppy are limited under the Bengal system by the obligation to sell the produce to Government at a fixed price. The question is under enquiry by the Committee referred to in paragraph 8. The same Committee is also investigating the case of the Malwa States, in which the substitution of other remunerative crops presents far greater difficulties, and the time for effecting- the transition is so limited that, as will be seen from the figures presented in paragragh 30, the alternatives before the Malwa cultivating and trading interests are (a) the almost immediate stamping out of cultivation, or (b) the certainty of finding on their hands after io years large surplus stocks for which no licit outlet will exist.
MANUFACTURE OF BENGAL OPIUM.
((t) CLASSIFICATION OF MANUFACTURED OPIUNI.
17.—The opium manufactured at the Government factories may be (a) provision opium, i.e,, opium manufactured for export or (b) excise opium manufactured for local consumption in India. Provision opium again is divided into two classes, namely-, " Patna opium " prepared at the Patna factory and " Benares opium " prepared at Ghazipore which is near to Benares.
(b) COMPOSITIoN OF BENGAL OPIUM BALL OR CAKE.
'S.—The main difference between the pure opium contained in the manufactured ball or cake of each class is one of consistence, Patna opium being prepared so as to contain 75 per cent. of solid and non-volatile matter, Benares opium 71 per cent., and Excise opium 90 per cent.
Provision opium and Excise opium also differ in that the former is made up in balls protected by a leafy covering, while the latter being of higher consistence requires no such protection, and is made up into cubes consisting wholly of solid opium.
A ball of provision opium contains—
(a) Fine opium at the consistence of 71 or 75, forming the inner
contunt of the ball 3 o tr,o
(h) Fine opium at the same consistence used in the shell 7 31 2 Y2
(C) " Leaf," "pasewa," and " trash" used in the shell 14 400*
4 6 425
Thus each ball contains a little over lbs. of fine opium and a provision chest of 40
balls as made up for export exactly 14o,+. lbs. in addition to other poppy products.
A cake of excise opium weighs one seer, i.e., 21w lbs. of 90 degrees consistence, and a chest contains 6o cakes.
(c) PROCESS OF MANUFACTURE.
19.—The essential features of the manufacturing process are testing and selection with a view to the elimination of adulterated and datnaged opium, and mixing, and also evaporation where necessary, to- arrive at the desired consistence. Much manual skill is required in the construction of the shell; and the closest attention to uniformity is paid throughout the different processes down to the details of the packing.
2o.—The Bengal opium of a given season's crop [e.g., that grown between November 1906 and March 19°7] is ordinarily sold in the following calendar year [e.g., in the case supposed, 19°8] subject to the prior disposal of any reserve StOCliS.
MANUFACTURE OF MALWA OPIUM.
2I.—The crude Malwa opium as collected by the cultivator is stored by him in linseed oil without any previous separation of the "pasewa," and eventually sold to the middleman who conveys it to the manufacturing centre in Native State territory and there sells it to the larger dealer and manufacturer. Or the latter and the cultivator may deal together directly. The process of manufacture is simple. After the free oil has been allowed to drain away, the crude drug is kneaded in a succession of copper pans, a treatment which eliminates more of the oil and thus raises the consistence of the drug. The material is then roughly shaped into balls which are allowed to dry on racks on a bed of "trash." In the next few months the balls are opened, kneaded and reshaped several times. Finally they are allowed to dry till about September. The balls then weigh roughly 12 ozs. each, and if intended for immediate export are packed into chests containing 140 lbs., or into half-chests of 7o lbs. The chests used on final export from Bombay are made up, by repacking, to contain the larger amount. The opium may, however, instead of being despatched about six months after production, be retained for a varying period which may extend to several years; and the drug thus rnatured commands a higher price.
22.—Malwa opium is ordinarily reputed to be of 90 to 95 degrees consistence but there is some reason to believe that the average consistence is lower than this figure; it has been placed by one expert at 85 degrees.
*The Benares ball differs in having about 1"; ozs. less of these constituents.
lbs. oz. grs.
INTERNAL AND EXTERNAL TR ME IN BENGAL OPIUM.
23.—As any advances required by the Bengal cultivator are supplied by the Indian Government, and the whole of the produce is purchased at a fixed rate and manufactured by Government, the trade element does not enter into the industry' until a la.te stage; and in the case of excise opium it will be sufficiently explained by reference to the arrangements for retail sale which will be described as part of the statement of the Indian excise system.
(a) SALES FOR EXPORT.
24.—As regards provision opium it is the practice of the Government of India to announce beforehand the amount of Bengal opium which it is intended to offer fol- sale in the following calendar year, and not to vary the arrangement so notified except after three months notice. The sales are effected by a monthly,' auction in Calcutta, one-twelfth part of the total quantity announced being offered at each sale. The price obtained at these sales varies very widely according- to the circumstances of the China markets and the state of the silver exchanges. The difference between this price and the cost* of manufacture constitutes the direct duty which the Indian Government realize on the export of Bengal opium to foreign countries. The opium remains in the Government warehouse while in Calcutta, and may only be retnoved therefrom under a system of supervision designed to ensure that a chest shall not be tampered with, or the opium contained in it diverted for illicit consumption in British India.
25.—The quantity of Bengal opium thus sold annually is stated for a series of years in Statement II. In each of the calendar years t9ot to 19os it amounted to 48,0oo chests. This was raised to s2,800 chests in 1906, a figure which would have been repeated in 1907 but for a reduction in the course of the year in the amount previously announced—a step anticipating the definite measures of co-operation with China which came into operation from the rst January r9o8. The total sales for 1907 were thus So,400.
(b) AMOUNT EXPORTED.
26.—The amounts offered for sale represent the export standard of each year : the amounts actually exported in any period differ slightly from the amount sold. The two sets of figures are compared in Statement II. In this Statement the statistics for Bengal opium and for the export of Malwa opium are given by calendar years.
(c) COUNTRIES TO WIIICH EXPORTED.
27.—Two further Statements are appended giving statistics by the official year (1st April to 3rst March) by which the details for separate countries are ordinarily compiled in India. These are Statement III (a) distinguishing the exports to China. and Hongkong, and to the Straits Settlements, to \vhich countries the bulk of the Indian opium is consigned, and Statement III (b) indicating the other countries which takel- opium direct from India.
28.—These other countries and localities are the United Kingdom, Australia, Canada, Ceylon, Natal, Mauritius, and British East Africa; and France, Indo-China, Java, Sumatra, Portugueqe East Africa and Siam.: To trace completely the destination of Indian opium it is necessary to examine the re-exports from other countries and especially from the Straits Settlements, from which Indian opium is also supplied in substantial quantities to the Federated Malay States, the Netherlands–India, and Siam, and in small amounts to the Philippines, Sarawak and Labuan.
TRADE IN MALWA OPIUM.
29.—The Malwa opium producer cultivates without advances or is financed by a local banker, who in some cases confines his business entirely to opium transactions and is
" The cost of a provision chest, allowing for interest on sums advanced to cultivators is about Rs. soo. The average price realized at the sales, taking both kinds, Patna and Benares, together, was Rs. 1,348 in 14907-8, and Rs. 1,297,X in the ten years ending with 1906-7.
t In some cases nominal amounts only.
In Statement III (b) the countries are differently specifwd, according to another standard table of Indian statistics : exports to British and Portuguese East Africa being combined, and exports to some of the other countries named being included in the column " othe'r countries. therefore free to transfer his capital elsewhere on the disappearance of his special occupation.. This intermediary will frequently be the first purchaser of the produce to whom reference was made in paragraph 21. From his hands it will pass to the larger dealers and manufacturers at central manufacturing towns such as Indore. The opium trade in these places is one of long standing and great local importance. A large amount of capital is locked up in the stocks of opium, or circulating in connection with the purchase and sale of the drug. The large dealers in the Native States may also be the actual exporters from Bombay, but u.sually, and especially while conditions remained normal, the bulk of the trade from Bombay (and also from Calcutta) has been in the hands of a few leading firms whose personnel and that of the associate firms in the Straits Settlements, Hongkong and Shanghai are familiar names.
Finally it is understood that opium freights and insurance form valuable branches of business, in the case of the Bengal as well as of the Malwa drug.
3o.—The magnitude of the stocks ordinarily kept in hand, to which reference has just been made, arises from the practice of keeping Malwa opium some time to mature, especially when current prices offer no great inducement to immediate exportation. The existence of these stocks has an important bearing on the question of the effect of the progressive extinction of the Malwa export trade on agricultural and commercial interests in the Native States. The aggreg-ate export permissible under the agreement with China in the course of the io years preceding the absolute extinction of the trade is 83,500 chests. The stocks existing when the agreement came into effect, including the probable produce of the crop of 1007-1008, have been estimated at a figure between a minimum of 6o,000 chests and a maximum of foo,000 chests, and the standard of production for export on which the agreement is based was 10,000 chests a year.
31.—To minimise the risk of smuggling from Native States into British India the use of Malwa opium for excise purposes has been successively prohibited in every province except Bombay. If eventually purchased for consumption in British India it pays a duty of Rs. 700 a chest. Malwa opium intended for export oversea has to be presented at certain weighment centres in the Native States, technically known as "Scales," where the chests are examined and weig-hed under the supervision of officers of the Indian Government and the "pass duty" (at present fixed at Rs. 600 a chest) is levied. This constitutes the revenue obtained by the Indian Government from the Malwa drug. The chests are then transported by prescribed railway routes, and under strict supervision, to Bombay, where they are stored in a Government warehouse until actually exported under conditions which, as stated in the case of Bengal opium, are designed to secure that the opium shall not be diverted for con-sumption in British India.
32,—Practically the whole of the Malwa exports are consumed in China, only a few chests being occasionally sent to other places. The statistics of Malwa opium which has paid duty on weighment at the "Scales" during a series of years and of the actual exports of such opium are contained in Statement II already referred to in paragraph 26.
AGREEMENT WITH CHINA IN REGARD TO THE PROGRESSIVE REDUCTION OF EXPORTS.
33.--With effect from the 1st January 1008 the aggregate volume of exports of opium from India has been limited by an agreement between His Majesty's Government and China to-
61,90o chests in 1008
56,800 „ „ 1000
51,700 „ „ 1010
and it has been further agreed that if during these three years the Chinese Government have duly carried out their arrangements for diminishing the production and consumption of opium in China, His Majesty's Government.undertake to continue in the same proportion this annual diminution of the export after the three years in question: the restriction of the imports of Turkish, Persian and other opium into China being separatelv arranged by the Chinese Government and carried out simultaneously. Thus at the end of lo years when the agreement will have produced its full intended effect (by extinguishing a portiOn of the total trade equal to the averag,e imports of Indian opium into China during the period 10ol–o5, namely 51,000 chests a year), the permissible export of Indian opium to countries other than China will stand at a fixed maximum of 16,000 chests a year.
34.—This agreement was accepted by the Chinese Government in January 1908 with an expression of deep gratitude to His Majesty's Government ; and the Wai-wu-pu, after a year's experience, have recently communicated to His Majesty's Minister at Peking their continued and entire satisfaction with the arrangement.
35.—The distribution of the total export permitted by the agreement has been effected as follows:—
VALUE OF ANNUAL EXPORTS OH' OPIUM.
36.—The averag-e value of the opium exported from India in the last three years before the reductions began to be effective (1904-05 to 1906-07) was over L63 millions, and the normal Chinese share may be taken roughly at *three-fourths. The export of poppy seed (mentioned in paragraph 13) will also be diminished. The total reduction in the volume of exports which the agreement may ultimately involve thus represents a substantial proportion of the existing balance of exports over imports.
IMPORTS OF OPIUM INTO INDIA BY SEA.
37.—Under Schedule III of the Indian Tariff Act of 1894 a duty at the rate of Rs. 24 a seer (226 lbs.) is levied on foreign opium imported into India by sea. The rules regarding such imports vary to some extent in the different maritime provinces. Foreign opium or medicinal preparations containing opium may be imported by sea into Bengal and into Eastern Bengal and Assam for medicinal purposes only. In Bombay foreign opium and its preparations may be imported by sea into the pr,incipal ports in unbroken chests or half-chests for the purpose of re-exportation, in which case a small fee only is charged. The import of opium for retention in the province or in broken quantities is allowed only at the port of Bombay, and is subject to any special orders passed by the provincial head of the opium department as to its possession and disposal. In Madras foreign opium and its preparations may be imported by sea only by, licensed druggists. In Burma opium and its preparations produced out of India may, be imported by medical practitioners—a term which for the purposes of the rules in force in that province means a person with an English or Indian university qualification and practising medicine according to European methods. There are also various subsidiary rules and conditions regulating the manner in 1,vhich residents in the internal provinces may obtain opium from oversea. The combined effect of these regulations and of the heavy tariff is that imports by sea are negligible The amount in 1907-08 was 3o6 lbs. of which the United King-dom sent 3oo lbs.
IMPORTS OF OPIUM INTO INDIA BY LAND.
38.—The duty on imports over the land frontiers of India varies with reference to the excise systems of the provinces through which the opium enters. From the records of the last to years it appears that India has received imports from Afghanistan ; from Dir, Swat, and Bajaur ; from Kashmir ; from Nepal; from Western China and from the Northern Shan States; but the total annual amount is small, the imports of 1907-08, namely, 26,320 lbs. representing about the maximum. Substantial quantities, however, have been awaiting ad-mission from Afghanistan in the last few months.
39.—The cultivation of the poppy, the trade in opium and the opium habit existed in India long before the period of British rule, and the system of opium administration as it exists to-day has a basis in historical and political conditions which can only, be alluded to in this Memorandum, but should not be overlooked. For practically a century the Indian Government have been engaged in the gradual acquisition of control over the production, transit and sale of the drug throughout the continent: by the practical concentration of
* 51: 67: as in the agreement.
cultivation, so far as British India is concerned, within certain areas in Bengal and the United Provinces; by the discontinuance of cultivation in many of the internal Native States, as the outcome of negotiation, and the'introduction into such States of an Excise system on lines more or less closely approximating to that in force in neighbouring British territory; by the taxation and supervision of opium in transit from Central India and Rajputana into and through British territory ; and by the inclusion of all the different provinces in the general system as they were successively acquired, or as the necessity for regulation became manifest. This administrative and political task is still in some measure continuing. In the period since the Royal Commission on Opium submitted its report (April 1895) special attention has been paid to the improvement* of internal excise arrangements within the Malwa States, to the more drastic enforcement of the prohibition policy adopted in regard to the Burman population, and to the more adequate taxation of opium consumption in the Punjab, towards which the practical abolition of local cultivation already referred to and the intended increase of the duty on opium introduced from the surrounding Native States are preliminary steps. The British territory of Ajmer-Merwara has been brought under such control as it is possible to exercise over an enclave of British territory surrounded by opium-producing Native States. Excise arrangements in the Central Provinces and Berar have also been reorganized as the result of investigation by a special Committee in Igo3. In addition the sale of smoking preparations has been wholly prohibited in response to the recommendations of the Royal Commission, and the possession of such preparations of private manufacture has been confined within the narrowest limits, this step being de.signed to check the spread of an alternative form of the opium habit which was disapproved by Indian opinion. The facilities for procuring opium have been curtailed by the abolition of shops for the sale of smoking preparations, which previously numbered more than six hundred, and by the reduction of shops for the sale of raw opium from a total throughout British India of 9,531 in 1892-93 to 8,126 in 1907–o8. The excise and preventive establishments have been greatly strengthened in alinost every province—a fact which is visible in the rapid increase of expenditure chargeable to the head " Excise."
Finally a new problem, to which reference will be made in a separate memorandum, has presented itself in connection with morphia, and has been dealt with by stringent regulations.
OPIUM ACT OF 1878.
4.0.—The system thus built up is based upon the principle of restricting the consumption and preventing the abuse of opium by enhancing the price at which the drug- cotnes into the hands of the consumer within such a limit as will not defeat the object in view by the stimulus given to smuggling. It rests from the legislative point of view on the Opium Act of 1878, of which the following are the essential provisions :—
that the term " opium" where used in the Act shall include also poppy heads, preparations or admixtures of opium and intoxicating drugs prepared from the
(2) that except as permitted by the Act or by any other enactment relating to opium for the time being in force or by rules framed under the Act or under any such enactment, no one shall cultivate the poppy, manufacture opium, possess opium, transport opium, import opium or export opium, or sell opium ; and
that anv person who contravenes the Act or rules made under it shall be punished for each offence with imprisonment for a term which may extend to one year, or with fine which may extend to Rs. i,o0o, or with both, or with a further term of imprisonment not exceeding six months in the event of default in payment ,of the fine.
Provision is also made for the confiscation of any opium in regard to which an offence is committed. Officers of the Excise, Police, Customs, Salt, Opium or Revenue Departments of the proper rank are given powers of search, seizure and detention. There is also a special rule prescribing that in prosecutions for breaches of the Act it shall be presumed, until the contrary is proved, that all opium for which an accused person is unable to account satisfactorily is opium in respect to which he has committed an offence under the Act.
The latest reports, however, indicate cotnparatively little genuine progress in this direction ; and in the present position in the Malwa States such progress must inevitably be deferred.
f Except in Burma where there is a Chinese smoking population.
GENERAL RESTRICTIONS ON SALE AND POSSESSION.
41.—Some general restrictions on the use of opium in India are more or less uniformly applicable to all the provinces and need not be recited in the separate description of each provincial system. It should be explained, however, that the statements made do not apply to morphia, which is under special and more prohibitory regulations, or to the possession of opium and its preparations, other than smoking preparations, by licensed medical practitioners and druggists for bond fide medical purposes which also is specially regulated. The principal general restrictions are—
(f) The consumption of opium in any form on the premises of any shop, licensed for the sale of opium, is entirely prohibited throughout India, and no premises are licensed for consumption as distinguished from sale.
(2) The sale of opium in the form of preparations for smoking is entirely prohibited except in Burma.
(3) The possession by any person of any smoking preparation of opium in a quantity exceeding 18o grains, even though privately manufactured from a larger quantity of opium licitly in his possession, is prohibited except in Burina. Three provinces further restrict the aggreg-ate quantity of a smoking preparation which may be possessed by a party of persons to a maximum of goo grains.
(4) The possession of crude opium by any person other than a licensed vendor in a quantity exceeding goo grains in three provinces, or 540 grains in nine provinces, is prohibited, except in certain tracts in Madras and Boinbay where a somewhat higher limit is allowed for special reasons.
(5) A limit of possession is also imposed in regard to poppy heads.
(6) Certain further restrictions are imposed by the conditions of the licenses issued to the vendors; e.g.,* the licensee is prohibited from receiving wearing apparel or other goods in barter for opium, or selling opium on credit or opening- his shop or harbouring any person therein between 9.30 p.m. and sunrise, or permitting persons of notoriously bad character to resort to his shop, or allowing gaming or disorderly conduct therein.
SEPARATE PROVINCIAL SYSTEMS.
The separate excise system of the larger provinces will now be briefly described.
Area 115,819 sq. miles. Population 09ot) 5(334 millions.
42.—In the province of Bengal only Bengal opium may be used. It is supplied to the licensed vendors from district treasuries at a fixed price which is usually Rs. 29 a seer,t but is as low as Rs. 17 in the poppy-growing area where opium for illicit consumption is most readily obtained and as high as Rs. 35 a seer in Orissa where the raising of the issue price is one of the measures recently taken or under consideration with a view to checking the opium habit among the Uriyas. The right of retailing opium is separately disposed of for each shop, the general practice being to put the shops up for auction subject to fixed reserved prices. The total taxation a seer in 1906-7 was Rs. 273/4., i.e., the price paid by the consumer had to be large enough to cover (1) the cost price of the opium to Government, namely, Rs. 8S a seer; (2) an addition on the average of Rs. 273% a seer, or more than three times the cost price, representing the taxation levied directly by means of the high price at which opium is issued to the licensed vendor, and indirectly by means of the auction fees obtained for the grant of the right of sale ; and (3) a further addition, the amount of which varies from shop to shop, representing the retailer's own expenses and profits.
43.—A special restriction enforced in certain districts where the purchase of licit opium for the purpose of smuggling it into Burma has been found to prevail, is the limitation of the total amount of opium issued to each shop with reference to estimated local requirements.
*The exainples are taken from the Bombay rules. t R 1=Lo Is. 4d. I One seer=2A lbs.
(b) EASTERN BENGAL AND ASSAM.
Area106,13o sq. miles. Population (19o1) 31 millions.
44.—Bengal opium is used in Eastern Bengal and Assam and is supplied in the same manner as in Bengal. The issue price is Rs. 37 a seer in Assam and ranges from Rs. 29 to 31 in Eastern Bengal, the higher rate in Assam being rendered possible by its isolation, and desirable in view of the greater prevalence of the opium habit in that province, which was an opium-producing area prior to its absorption in British India. The further enhancement of existing issue rates is stated to be under consideration. The auction system of disposing of the right of retail vend is in force, but is modified in the Assam districts by the application of upset prices. The average incidence of taxation on opium was Rs. 3434 a seer. The limitation of shop issues referred to under Bengal is also in force in one important district, and in certain localities it is also prescribed that the names and addresses of all purchasers of more than 90 grains at a time shall be registered.
UNITED PROVINCES OF AGRA AND OUDH.
Area lo7 ,164 sq. miles. Population (190 ) 47 millions.
45.—In the United Provinces Bengal opium is used, and is supplied to licensed vendors, as in Bengal, from district treasuries, and in most districts of the province the district treasurers also are permitted to retail the dru-„T subject to the conditions (a) that sales shall take place only during office hours, and (b) that the price charged to the public shall be one rupee a seer above the rate at which opium is issued to licensed vendors. These issue rates (which are charged also to the treasurers themselves) range from Rs. 16 to 18 a seer. The prevalence of lower rates in this province is due to the existence of poppy cultivation.
The right of retail vend (except in the case of the ex-o cio vendors above referred to), is disposed of by auction, shops being sold singly or in groups. The total incidence of taxation in 1906-7 was 12,3 per seer.
Area 97,2°9 sq. miles. Population ( i9oi) 20 MilliOnS.
46.—The Punjab has hitherto drawn its supplies from its own somewhat lightly taxed production, from neig,hbouring producing States, and also from Bengal and Malwa. In future,* as already stated, the production of opium in the plains of the Punjab will be prohibited, the use of Malwa opium will be discontinued, and it is intended that imported Native States opiuin shall be more highly taxed. The ground will then be prepared for a more restrictive policy under which Bengal opium retailed at an increased price will be the chief source of supply. The use of poppy heads for the preparation of a beverage named " post " is common in the Punjab, and cultivation for this purpose will be allowed to a limited extent and under suitable regulations. Licenses for retail vend are now sold separately by auction, monopolies of sale in whole districts or large portions of them having been recently discontinued. The average incidence of taxation on opium in 1906-1907 was Rs. 12 per seer, the measures outlined above not being in full effect.
Area I 23,064 sq. miles. Population (19o1) millions.
47.—Malwa opium is still the source of supply in the province of Bombay, and in the numerous Native States which form a conspicuous feature of its political system. These Statest have come into line with the Indian Government in regard to excise administration, and have engaged under separate agreements to prohibit poppy cultivation in their territories, to supply themselves with opium either from the Government depôts or by purchase in the market subject to the payment of the pass duty of Rs. 7oo a chest, and to retail it to their subjects at prices not lower than the retail prices for the time being in force in neighbouring British districts. They have also engaged to exert themselves to prevent the introduction of untaxed opium into their territories. In return for the acceptance of these obligations they receive an eventual remission (varying from one-tenth to the whole of the pass duty) on opium consumed within their territories. Two systems of arrangement for retail vend are in force in the British portion of the province. One is similar to that described in
* Subject to a temporary postponement in one or two localities.
1- Except Baroda already mentioned in paragraph as belonging to the Malwa system.
connection with other provinces under which the right of retail vend is auctioned for single shops, or for a group of shops comprised in a single administrative area. Under the other system, a monopoly of retail vend f()r a specified area, at shops licensed by the excise authorities, is granted year by year to a farmer selected by the local Government. The farmer contributes to the cost of the preventive establishments, but otherwise pays nothing for his vend privileges over and above the duty on the opium. Under both systems minimum and maximum prices are fixed as part of the conditions of the license.
Area 141,7 26 sq. miles. Population (19o1) 38 millions.
48.—Bengal opium has replaced Malwa opium in Madras with effect from the ist April 1908, a measure designed to facilitate the detection of smuggling directly from Malwa and also through the Native State of Hyderabad. The rig,ht of retail vend is auctioned except in certain special tracts, the shops being sold separately. The incidence of taxation on opium in 1906-07 (the Malwa drug being then in use) was about Rs. 20 a seer. The retail selling prices are to be enhanced in certain districts from the ist April 1909, the general issue price of opium is to be raised from Rs. 20 tO 2 3 a seer, and 53 shops are to be closed to check a recent tendency to increased consumption.
Area 2 37,738 sq. miles. Population ( 901) Jo millions.
49.—In Burma the right conceded elsewhere to possess and consume opium in limited quantities has been withdrawn from residents of the Burman race.
The rules on the subject are—
(I) Burmans in Upper Burma may not possess opium except for medical purposes.
(2) Burmans in Lower Burma who have not been registered may not possess opium except for medical purposes.
(3) Non Burmans, e.g., Chinese and Indians from the mainland, may possess opium for private consumption.
50.—The sale of opium to Burmans in Upper Burma was prohibited soon after the annexation. As regards Lower Burma the prohibition policy dates from 1893-94. The experiment has passed through various stages to which some reference will be made in dealing with the figures for consumption. In the case of Upper Burma, where the use of opium had been prohibited before the Province was annexed in 1886, no exception was made in favour of existing consumers when prohibition was again enforced under British rule. In Lower Burma the use of opium had previously been permitted under the ordinary excise system though various efforts had been made to limit the growth of the habit. Provision was accordingly made for habitual consumers, and Burmans of 25 years and upwards who desired to continue the use of opium were permitted to register themselves. The registered consumer was then furnished with a certificate of registration and was required to produce it when buying opium.
It was found, however, that the first registration was defective and that the existence of a large number of persons who ought to have registered but did not, and thus could not obtain opium by licit means. promoted smuggling. The reg-isters were therefore reopened during 1900-03 but only on behalf of those originally eligible.
5t.—The cultivation of the poppy is prohibited throughout British Burma except in the Kachin villages in four districts where it is subject to an acreage tax. This cultivation is carried on in remote hills seldom visited and beyond the sphere of regular administration. Cultivation also exists in the Shan States, which though subject to control, are also less closely administered,
52.—In Lower Burma Bengal opium is used. In Upper Burma the use of opium locally grown in the districts above referred to or in the Shan States, or imported from China, is also allowed. It would be difficult in any case effectively to prevent its entry.
53.—The ordinary limit of possession is 540 grains. This may be increased by special license under special restrictions in the case of persons who live at long distances from licensed shops, but this provision of the rules is little used.
54.—Except at a few shops opium is issued at the fixed price of Rs. for 180 grains in the case of raw opium, or Rs. IY4, for the same weight of prepared opium.
55.—The rates at which opium is issued to licensed vendors are fixed with reference to the normal sales in such a way as to leave a margin for a reasonable profit. The retail vendor is a non-official selected by the head of the district subject to the sanction of the next hiç._,-,her authority. He is supervised by a Government officer, known as the resident excise officer, whose duty it is to be present at the shop throughout the whole of the period (it) a.m. to 4 p.m.) during which the shop is allowed to be open, to see that no irregular practices are permitted, that no person is allowed to buy more than 540 grains, that opium is not sold to unregistered Burmans, and that sales are correctly recorded, and to restrict the frequency of sales to each consumer according to his known scale of consumption. He also sees that at closing time the stock of opium in hand is taken from the vendor's possession and placed in the police-station.
56.—The total number of shops is 126.
57.—The sale of opium prepared for smoking is permitted in two forms—(a) beinsi that is clarified opium prepared for smoking and (b) beinchi a mixture of pure opium and refuse of opium collected from pipes which have been smoked.
58.—The whole system is enforced by preventive establishments, the total cost of which is about ,45,000 a year. An application for a further increase has been received.
59.—There remain the minor administrations. The principal is the Central Provinces (including Berar) ith a population of 12 millions. The others are—
North-West Frontier Province 2,125,000
Coorg I 8 polo
The extension of the system of regulation to Ajmer-Merwara has already been mentioned ; previously there was no control outside a few municipal areas. Baluchistan was not included in the scope of the Opium Act till 1890. Each of these administrations has its separate rules suited to local conditions.
60.—The provinces making up British India of which some brief account has been given include 12 distinct administrations ; they extend over more than one million square miles and they contain a diversified population of 232 millions. In addition there are the Native States with a total* area of 675,000 square miles, the bulk of them wholly contained within British teiritory, and possessing an aggregate population of 62 millions. Of these, 20 millions are included in the Central India and Rajputana Agencies and Baroda, in which the States producing the poppy constitute the Malwa group.
The Treaties and arrangements with the Native States regarding opium are sum-marised in an official paper presented to the Royal Commission and recorded in Appendix X of Volume II of their Proceedings. The position there described has undergone little substantial change.
MANUFACTURE OF MEDICINAL OPIUM AND OPIUM ALKALOIDS.
61.—Medicinal opium is manufactured in one of the Government factories from selected specimens of the drug, and issued to Government hospitals and dispensaries and to the Medical Department of any Native States requiring it. The other factory also extracts alkaloids for issue to Government medical institutions in India and to European and Indian druggists. The bulk of the morphine hydro-chlorate and of the codeia thus manufactured is, however, sold in London to meet the medicinal demand. The quantities manufactured in igo6–o7 were as follows:—
* This includes Kashmir (area 81,000 sq. miles ; population 3 millions].
Medicinal opium in cakes 532—o
„ „ powder 755-0
Morphine pure 0-2
acetate ... I 2-0
1, sulphate .. nil.
tartrate ... 0-4
The possibility of finding a wider legitimate market for medicinal opium and opium alkaloids manufactured in India has been frequently under consideration. As regards the alkaloids it is believed that a new method of extraction now under trial will obviate the im-purity and discoloration which have hitherto been present in alkaloids of Indian manufacture.
Enquiry is also being made as to the possibility of raising the morphia content of Indian opium, prepared specifically for medicinal purposes, by improved selection of seed, and improved methods of collection. Selected samples of Indian opium have been found by expert examination in England to contain a percentage of morphine well above the demands of the British Pharmacopeia.
POSSESSION OF OPIUM AND ITS PREPARATIONS BY MEDICAL PRACTITIONERS
62.—The excise rules of all the provinces recognise medical practitioners and druggists and permit them under license to possess larger quantities than are allowed to the ordinary consumer. The rules do not in most cases impose definite restrictions in regard to the qualifications of the persons applying for licenses, but licensing officers would presumably refuse applications for which no bond fide case could be made out. It is stated where enquiry has been made that the privileges thus conferred are not in practice abused, but except in Eastern Bengal and Assam and Bombay where the licenses granted in 1906-07 numbered respectively 551, 467 and 824, the number is not large. Some of the changes in the figures since 1892 are, however, noticeable, e.g.:—
(yr licenses. of licenses.
Punjab and North-West Frontier Province... 4 176
Madras ... 19 205
Bombay ... 389 824
Burma ... 23 218
MODE OF CONSUMPTION.
63.*—The form of the opium habit which presents itself in India is eating, that is the raw drug is swallowed in the shape of pills without being prepared in any way; in some parts it is dissolved in water and drunk. Smoking is a practice foreign to the country and confined so far-as the law is concerned by restrictions which in the case of chandu smoking must amount in practice to little less than prohibition. Smoking in one form or another is, however, reported to be actually practiced in several provincest —but to what extent it is difficult to say now that the habit is withdrawn fi min observation as the result of the refusal of legal recognition.
The foregoing remarks do not apply to Burma; in that province the lavv allows the sale of smoking preparations of opium to those whom it permits to use opium at all, and the Chinese in Burma smoke, while the registered Burman or the Burman who consumes opium illicitly either smokes or eats. The Indian ordinarily eats.
DISTRIBUTION OF THE HABIT.
64 —The distribution of the habit varies widely in different provinces and in different parts of the same province. The broad facts continue substantially unchanged. The habit is
"It will be seen that paragraphs 63 to 6s closely follow the observations of the Royal Commission on the same branches of the subject. As observed in paragraph 64 the broad facts continue substantially unchanged.
t e.g. the latest Bengal report on excise administration states that opium smoking though widely prevalent does not appear on the whole to be on the increase except in Calcutta and Orissa.' The continued practice of madak smoking in the Central provinces was noticed by the Committee referred to in paragraph 40. And attention has quite recently been called to the prevalence of smoking among the hill and forest tribes in Assarn.
186 INTERNATIONAL OPIUM COMMISSION
more prevalent in the larger towns. A high-lying- tract may be comparatively free from the use of opium, while in a neighbouring damp and low-lying area consumption may be common. In some cases an explanation of the more general use of opium may be found in the previous history, of the province under Native rule or by reference to the date at which a restrictive system was introduced under British rule. Again the recorded incidence of illicit consumption is noticeably low in poppy-growing areas 'or wherever special facilities for smug-gling exist. The habit may also be in some measure a matter of racial or social practice. It is common atnong the Rajputs of Rajputana and to some extent at any rate enters into their ceremonial observances. It is also common among- the Sikh community, and it has often been pointed out as a possibly' connected fact that their religion debars them from the use of tobacco.
PURPOSES FOR WHICH OPIUM IS USED.
65.—It is among the admitted facts regarding the purposes for which opium is used in India that the habit is frequently adopted about middle age when the general health begins to decline; and also that, whether actually efficient or not as a preventive or permanently curative remedy, it is widely used with the object of relieving pain and bodily discomfort among a population the great bulk of which is unaccustomed to or beyond the reach of medical treatment on European lines, and, indeed, of genuine medical treatment of any school. The practice of administering opium to infants in minute doses is prevalent in Rajputana and in Central India and elsewhere, the habit being discontinued after the first few years of life. To some extent interwoven with the quasi-medical use, or originating in it, and in other cases distinctly separable, is the habit of using the drug as an indulgence.
66.—Reference must also be made to the question of the normal eating dose; in spite of the wide margin which must be allowed for error in estimates relating to this point, they may serve to give some idea, however rough, of the scope of the habit. The statistics of over 4.,000 cases of opium eaters in Rajputana, presented to the Royal Commission by a Govermnent medical officer, indicated an average daily consumption of 21* grains. The statistics of ioo other cases, also in Rajputana, presented by a medical missionary, worked out to an average of 21* grains. The statistics of 215 cases recorded by an Indian doctor in Calcutta gave an average of over 26W grains, the cases being mainly those of clerks and traders and other persons above the agricultural and labouring status.
67.—Calcutta shop statistics of clearly 3,000 purchases recorded in 1896 indicated that nearly two-thirds of the purchases were for amounts below 45 g-rains. It may be supposed that the buyers did not make a daily visit to the opium-shop, as the eating habit is not gregarious and does not involve consumption on the premises.
68.—Some later information is obtainable from observations in Burma where, as will be explained later, the normal dosage is a question which is now being closely scrutinised as an essential factor in the maintenance of effecti‘e prohibition against the Burman population. The enquiries made by the local authorities into the facts of individual consumption in that province indicate about one-sixteenth of a tola, or VI grains a day, as an ordinary daily requirement for Indians who eat opium; about 90 grains a day in the case of Chinese who smoke opium ; and a larger eating dose and a smaller smoking- dose in the case of Burmans. Shop statistics examined on the spot in November last closely confirmed this conclusion.
69.—None of the data are entirely typical. Rajputana is an area in which the poppy is freely cultivated, and restrictions on possession and sale are understood to have been practically non-existent at the time the statistics above referred to were recorded. The wealth of Calcutta and its known habit of relatively high consumption, as well as the status of the consumers on whose practice the Calcutta statistics were based preclude the acceptance of the results obtained as applicable to India generally. In the case of Burma the price of opium is abnormally high as compared with the rest of India, but the scale of earnings of the Indian immigrant is also very high. In the absence of more definite or complete data it would seem reasonable to take the average which guides the administration in Burma as the closest approach to actual facts to-day. It must, however, be fully recognised that there is a wide range in the dosage of individual habitual consumers, and that there must be a large class of occasional consumers.
* The figures quoted are the averages given on page 356 Vol.VI of the Royal Commission's Proceedings. For those unfamiliar with the grain as a unit of measure in opium statistics it may be mentioned that one mace equals 58.3 grains.
STATISTICS OF PROVINCIAL CONSUMPTION.
70.—The attached statement (No. IV) indicates the consumption of opium (i.e., issues to licensed vendors) by provinces in 1883-84; in 1892-93; and in 19o5-o6,1906-o7, and 1907-08. Before the Opium Act of 1878 became effective no trustworthy statistics can be supplied. The year 1892-93 marks the end of the period on which the Royal Commission on Opium reported..
The provincial results are somewhat obscured by territorial changes. The Punjab was reduced in area by the formation of the North-West Province with effect from 1901-02, and the figures for these two provinces have consequently' been combined. The Eastern districts of Bengal were transferred from Bengal to Assam (which then became the province now known as Eastern Bengal and Assam) in October 19os. The figures of consumption cannot be given for Ajmer-Merwara for 1883-84 and 1892-93 as this small area was previously unregulated. It is also impossible to give figures fur Baluchistan for the two earlier years, or the figures for Coorg 1883-84. Also the I3urma figure for 1883-84 does not include the consumption of Upper Burma which was conquered after that date.
INCREASE IN CONSUMPTION FROM 1892-93 TO 1907-08 (EXCLUDING BURMA).
7I.—Scarcity, famille and plague gradually reduced the standard of total consumption for all India (*excluding Burma) which had been attained by 1892-93, namely 4o6,788 seers, till a minimum of 368,os seers was reached in 19oo-ot. The subsequent period of recovery is also synchronous with large additions to preventive establishments, the tendency of which is to increase the recorded consumption by substituting taxed opium for the illicit drug. The 1892-93 standard was not however again attained till i9o5-o6, when the issues reached 412,820 seers, or excluding Ajmer-Merwara and Baluchistan for which the earlier figures of consumption cannot be given, a total of 409,066 seers. Thus 13 years of increase of population still left the consumption standard at practically its original figure. The increase in the last two years mainly occurs in Bengal and Eastern Bengal and Assam. The main facts behind the figures appear to be (a) a larget nominal increase of consumption (in Beng,a1) representing purchases of duty paid opium for smuggling into Burma; (b) some real increase of consumption in Orissa (in Bengal); and (c) a considerable increase of actual consumption in Assam, associated with the recent improvernent in material conditions in that part of the province but requiring and receiving attention. Steps are under consideration or have already been taken by which it is hoped effectively to deal with these three aspects of opium administration in the two provinces named.
72.—The total recorded consumption of British India, excluding Burma, represented in 19w-a less than 8,000 chests of the weight, opium content, and average consistence of Bengal export opium.
73.—There is one qualification which must be applied to all statistics of consumption: that is that they cannot bring to account the undetermined amount of illicit consumption. As regards this it can only be stated, first, that in view of the greatly increased strength of preventive establishments in recent years and other special measures taken to check organised smuggling in the provinces in which the ordinary system is in force it is not probable that the excluded amount of illicit consumption in 19J7-08 exceeds the quantity which falls out of, view in the statistics for 1892-93 and 1883-84; and, secondly, that whatever opportunities for illicit dealingrs now exist, will be greatly curtailed when the area under poppy is reduced by the extinction of three-fourths of the export trade.
CONSUMPTION IN BURMA.
1892-93 69,519 19oo-oi
1893-94 52,42o 19ox-o2 39,858
1894-95 25,839 19o2-o3 52,o28
1895-96 25,835 i9o3-o4 72,3oo
1896-97 28,113 i9o4-o5 83,152
1897-98 3o,o68 19o5-o6 78,386
1898-99 3o,845 1906-o7 74,731
1899-1900 32,690 19o7-o8 70,462
*The figures for Burma are separately examined later.
t The view here stated is supported by (a) large seizures of duty paid opium on its way to Burma; (b) the actual disclosure of smuggling organisations; (c) the known facts about similar smuggling from Chittagong in Eastern Bengal a few years ago ; and (d) the location of the increased issues, e.g., the increase of 7,751 seers in the issues to Calcutta in a single year.
74.—A fuller analysis of the statistics of consumption in Burma will throw light on the progress of the policy of race prohibition which has been attempted in that province. The figures are given in the margin year by year from just before the extension of the prohibition policy to Lower Burma, with effect from about 1893-94, up to the present day.
75.—As already stated the opium habit is under observation in Burma as exhibited concurrently by three distinct races, the Burman, the Indian and the Chinese. The policy of prohibition was the outcome of the practically unanimous official opinion in Burma that in the case of one of these races, namely the Burmese, the habit was exceedingly injurious. Opium was therefore prohibited for all Burmans except the regular adult consumers the regis-tration of whom has already been referred to. It was held to be impracticable to apply the same procedure to the Indians and the Chinese, in whose case opium eating and opium smoking were not considered to produce the same effects, and their presence side by side with excluded classes is a factor which has complicated the experiment. Also certain conditions subsequently found to be essential to success were not fully provided for at the outset. Shops continued to be sold by auction; retail prices were not fixed; and the preventive establishments employed were inadequate. The shops were also extraordinarily restricted in number, amounting in Lower Burma to about one to every 3,500 square miles, and the issues to shops, that is the maximum amounts of Government opium which they were permitted to sell, were arbitrarily limited, though by that time no sufficient detailed informa-tion hacl been obtained as to the normal requirements of the non-Burmans and the registered Burmans in each locality. The result was a delusive appearance of success. The sales of licit opium fell from 69,519 seers in 1892-93 to 25,839 seers in 1894-95. But later knowledge showed that this reduction represented in the main the substitution of illicit for licit consumption, and that the retail vendors themselves were supplementing their limited sales of licit Government opium by unrecorded sales of untaxed opium. The increasing prevalence of smuggling is shown by the fact that the seizures of illicit opium increased in Lower Burma from 493 seers in 1893-94 to 971 seers in 1898-99, and in Upper Burma from 3 seers to 2,275 seers. The actual position as disclosed by exhaustive enquiry in 1898 was afterwards summed up in the words :—" The attempt to restrict consumption was "rapidly and completely breaking down. The registered consumers were too far off the shops "to obtain their supplies in a regular manner; there were also unregistered consumers, probably "ten times as numerous, whom the prohibitive policy was converting into an outlaw "class; opium smuggling from India, China and Upper Burma was rife; and opium could be "obtained in almost every village even when there was no shop in the district."
76.—The Government determined to persevere with their experiment in prohibition, but to establish it on a sounder basis without regard to cost. It was expected at that time that the expenditure on improved arrangements would not prove reproductive. In the result it has actually done so, but this is an incidental circumstance which has not in any way affected the policy pursued. The following were the chief measures taken in Lower Burma for making prohibition more effective. The registers were temporarily reopened ; the number of shops was increased from 60 to 91, so as to place a supply of opium within reasonable reach of those to whom the law allowed it; the auction system of disposing of the right of sale was replaced by the special arrangement described in paragraph 55, and retail prices were fixed as stated in paragraph 54. Finally a strong excise staff was appointed to suppress smuggling and other illicit dealings. These arrangements came into effect in 1902 and 1903, and similar arrangements were introduced in Upper Burma in 1904, except as regards the procedure for registration which has never been a.pplied in that province.
77.—The effect was immediately observable in an increase of the licit consumption, which rose from 39,858 seers in 1901-02 to 52,028 seers in 1902-03, the first year in which the new arrangements were partially in force, and to 83,152 seers in 1904-05, the year in which they were first fully in force throughout both parts of the province. This marks the maximum figure of consumption attained. Though it would seem to be a high one it will be seen from the facts just stated in regard to seizures of smuggled opium in Burma itself that there was scope for a considerable increase by the mere substitution of licit for illicit consumption. It appears probable, however, that under the new arrangements the consumption passed for a time beyond the legitimate demand under a fully effective system. The revised arrangements did not provide for a growing practice by which a member of the licitly-consuming classes could purchase opium up to a maximum of 540 grains at a time and retail it illicitly to the excluded classes. It is only recently that anything like a satisfactory attempt has been made to deal with this question of " hawking," as the practice is commonly termed.
The method now adopted by the local authorities is to refuse to supply any purchaser who is not known at the shop with more than a minimuin dose of opium ; to make full enquiries regarding every regular purchaser or any stranger who repeats his purchase, in order to ascertain whether he is actually a consumer up to the extent indicated by, his purchases or at all ; and to maintain for each individual a complete record of the results of all investigation on this and like points. The amount issued to the consumer about whom such enquiries have been made is then strictly limited to his own personal requirements. The Excise Department believe that the staff at their disposal and some additions for which they have asked can cope with the difficulty of hawking on these lines. In any case they will have accumulated much valuable information about individuals if an extension of the prohibition policy in Burma should ultimately be found to be the only workable system. Meanwhile, on the modified lines now pursued. consumption has fallen from the maximum of 83,152 seers in i9o4–o5 to 70,462 seers in 1907-08, arid the latest figures indicate that it is still falling. The price of smuggled opium has also risen and the unauthorised consumer outside Rangoon has now to pay about Rs. 2, or even as much as Rs. 3 to 4, for I8o grains, as compared with the rate of Rs. I charged by the shops to licit consumers.
78.—The modified system is less easy to apply in Rangoon where hundreds of purchases may be made in a single day in a single shop and where the population is very fluctuating. The smuggling from Bengal also forms a serious difficulty. As already mentioned further steps have been taken to deal with it, and it now remains to be seen whether they will prove effective. It is also proposed to take statutory power to require persons reputed to deal habitually in illicit opium to give security for their good behaviour, on pain of imprisonment if such security is not forthcoming; and also to require each regular purchaser, of whatever race, to confine his purchases to a particular shop, a measure which will involve something very like the registration, formal or informal, of all opium consumers throughout the province.
79.—The foregoing remarks apply especially to Lower Burma. In Upper Burma the issues have been comparatively steady or fluctuations have been capable of satisfactory explanation.
So.—Looking at the broad results of this experiment in prohibition, there seems little doubt that in Upper Burrna the effect of the prohibition policy as developed in i9o2–o4 has been to check the spread of the opium habit among the Burman race. In Lower Burma the true result is obscured by the uncertainty as to the extent of illicit consumption. A high rate of consumption prevails, notwithstanding the limited population to whom the use of opium is permitted, but analysis shows that this is explained to a considerable extent by the rapidly, growing Chinese population and the relatively large daily, dose which a smoker consumes. The best statistical evidence bearing- on the question of the success of the repressive policy is perhaps that afforded by jail statistics. In the JO years preceding the introduction of that policy the average percentage of opium consumers among the persons admitted to jail in Lower Burma was 20.39. In 1893 it was 2o.5. In_the eight years following, that the first eight years of prohibition, the average percentage fell to 16.69, the general tendency being dol.vnward, though there was a slight rise in the middle of the period. In the four years from i9o2–o5 which followed the improvement of the original arrangements the average fell to 12.8 per cent. In 1905, the last year for which these particular statistics are available, the percentage (12.12) was little more than half the percentage (23.3o) which had been reached in one year (1892) just before the first attempts at prohibition.
8 I.—In dealing with the question of the revenue derived from opium it will be convenient to refer first to that obtained by the Malwa States from the taxation of opium produced in their territories, the bulk of which will disappear with the extinction of the export trade. The statistics of British India mention 96 States in Central India and Rajputana as opium-producing States, but in many of these the production must be insignificant. There remains a considerable number of States, and not necessarily the largest only, to whom the revenue derived directly or indirectly from opium is believed to be of substantial importance. The exact figures cannot, however, be given, and the whole question is under the con-sideration of the Committee to which several references have previously been made. The most important source of revenue connected with opium is the land tax, the assessment by the States being generally or frequently made at a specially high rate on any land which is suited for the production of the poppy.
82.—Direct duties are also levied. Some States tax the opium as it leaves the local area of its production or enters the manufacturing centre ; some which have no manufacturing centre levy an export duty when the opium leaves their territory ; some possessing manufacturing centres levy a protective duty on the export of opium in the unmanufactured state; others levy an export duty on manufactured opium. Sotne manufacturing States levy an import duty on crude opium corning into their territory to be made up, and high import duties are sometimes levied by States whose subjects import opium for their own consumption. There are also various taxes on opium transactions. The total revenue derived by the Native States from these miscellaneous taxes is not, however, as large as their number might suggest.
(a) CLASSIFICATION OF REVENUE FROM OPIUM.
83.—It will have been s(.(m that the revenue derived by the Indian Government from the sale of opium is made up of two portions: —(a) revenue from the export trade, and (b) revenue from the excise or internal consumption. These are separately recorded in the Indian financial returns under the heads of account " opiutn" and "excise." The net revenue treated as appertaining to the head "opium," i.e., to the export trade, is the balance which remains from the proceeds of the sales of Bengal opium, p/us the pass duty on Malwa opium, after deducting the cost of producing the Bengal opium manufactured for export. There are also certain minor receipts and charges. The revenue under the head "excise" represents in the main the difference between the prices at which Bengal opium is issued to retail vendors and the cost of producing it (which is calculated to be Rs. 8% a seer), together with the revenue received from the license fees paid by retail vendors and the duty on Malwa opium consumed in British India. Here again there are some minor receipts and charges.
84.—The statistics of revenue from both sources in recent years are submitted in Statement V enclosed with this Memorandum. It is not possible in the case of excise opium to supply figures for expenditure connected with excise opium as distinguished from other expenditure in connection with excise, opium being, in accounts procedure as well as in administrative fact, an integ-ral part of the excise administration, which is also concerned with intoxicating liquors and hemp drugs. For example, the excise establishments are maintained for excise purposes generally and not solely for preventive and other action in connection with opium. The deduction, however, of a suitable proportion of the total excise expenditure (though it has been largely increased in recent years by the strengthening of the preventive system) would not materially affect the figures quoted in the statement, which are net figures to the extent that the cost of producing the opium used is deducted before the revenue is brought to account.
(a) AMOUNT OF REVENUE FROM INTERN AL CONSUMPTION.
85.—It will be seen that the revenue from excise opium has been steadily increasing till it now stands at close on LI million a year. This largely due to the increased revenue in Burma. The figures for revenue cannot, of course, be taken as a correct index to consumption.
(c) AMOUNT OF REVENUE FROM THE EXPORT TRADE.
86.—The revenue from exports stood at L31 millions in the last complete year (1906-07) before the intended agreement with China began to take effect. In the previous year it had been millions and in the year before (19o4-05) A. millions. It varies, directly with the amount offered and the prices realized at the sales, or in the case of Malwa opium with the amount that pays duty with a view to export ; and the Malwa cultivation has been depressed for some years past. The prices of Bengal opium also fluctuate very widely even though the amount offered for sale may have remained constant during several years. The annual net revenue derived by the Indian Government from the export trade averaged -f
–3,446,868 in the five years ending- with igo5–o6, that is, in the period taken as the basis of the calculations involved in the agreement with China. For the three years ending with 1906-07 the average was .4.3,792,663. Three-fourths of either amount or in round numbers millions may be regarded as approximately representing the revenue obtained from the China portion of the trade.
87.--The position of Indian revenues as they stand to-day will be exhibited in the Budget for the coming year to be published at the end of March. The financial situation will not be found to be as satisfactory as it was in March ][9o7, when the readiness of India to co-operate actively in China's new policy was announced to the Meinbers of the Indian Council and to the public. This memoranduin may perhaps be concluded by a quotation from the words in which on that occasion, His Excellency the Earl of Minto, Viceroy and Governor General of India, publicly formulated the attitude of his Government towards the problem which China's decision had raised:—
" At first sight, I grant that China's proposals are very alarming as to their possible
effects on Indian revenues. But I am afraid I am unable to follow the sweeping
assumption that India is about to be sacrificed for the pleasure of a few faddists Neither
do I think we are entitled to doubt the good faith of the Chinese Government as to the objects of their proposals. Papers which I have had recently before me indicate every intention on the part of China to reduce with a strong hand the consumption of opium, and the growth of the poppy in her OW11 territory. I am no opium faddist. I quite admit the hardship a proscription of opium would entail on those who use it in moderation as many in this country do, and I am well aware of the difficulties surrounding any attempt to reduce its production. But there is no doubt throughout the civilised world a feeling of disgust at the demoralizing effect of the opium habit in excess. It is a feeling in which we cannot but share. We could not with any self-respect refuse to assist China on the grounds of loss of revenue to India I admit that the task- China has set herself may be greater than she can accomplish, and that we have a perfect rig,ht to require that in agreeing to the reduction of imports from India we should be satisfied of the results of China's efforts to reduce her own internal opium production. But notwithstanding the prospect of a heavy loss in revenue, I hope we may accept . . . . (the) view that provided the transition state through which we must pass is spread over a sufficient number of years, we need apprehend no financial disaster."