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76 opium was formally prohibited (A.D. 1796) by an Imperial Edict, the regular levy of a duty on opium ceased, and for it was substituted, with the connivance of the Cantonese Authorities, a system of secret importation under a clandestine levy of official fees. The effect of this Imperial prohibition was an immediate rise in the selling price of opium, and a consequently increased supply. Chinese historians report that by the year 1820, the annual clandestine sales of opium at Canton had reached a total of nearly 4,000 chests.

But we have exact statistics of the annual exportation of opium from India, most of which found its way to Canton, while the remainder which went elsewhere was balanced by imports of opium into China from other countries. These Indian Government statistics show that the exportation of opium from India continued, from A.D. 1798 to 1825, with very little variation, at an average rate of 4,117 chests per annum; that it rose in the year 1826, at a bound, to 6,570 chests, and continued until the year 1829 at an average annual rate of 7,427 chests; that in the year 1830 the export suddenly rose to 11,835 chests and continued, until the year 1835, at an average annual rate of 12,095 chests. But in the year 1837, on account of the enhanced demand caused by the general expectation entertained in 1836 that the trade would be legalised, the exportation of opium took another sudden bound, rising to 19,600 chests, in consequence of which the total amount of opium, accumulated in the hands of opium merchants at Canton and Macao during the period 1836 to 1837, reached a total of 30,000 chests. Of these, some 20,000 chests were sold in 1836, to the value of about two million pounds sterling, of which sum £280,000 went into the pockets of the High Authorities. The trade in opium was all along carried on at Canton in the foreign factories, where the Hong Merchants and their privileged clients and even Chinese officials openly purchased—from the various foreign merchants, representing English, Anglo-Indian (chiefly Parsee), Portuguese, American, French, Spanish, Danish, and Dutch firms—written orders (chops) for opium to be delivered by ships