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Page history last edited by PBworks 15 years, 3 months ago

Opium (yapian 鸦片)




Shanghai was built on the opium trade. Before the 1850s, Shanghai was the terminal port for coastal opium traffic. Shanghai was opened to foreign trade on November 11th 1843 and very soon afterwards, Jardine’s (the biggest British company in China at the time) set up a branch there and hired Chinese compradors, one of whom was solely concerned with the supervision of opium. By 1845, the opium moving through Shanghai constituted almost half of all the opium imported into China.



In 1880, nearly 13,000,000 pounds of opium came into China, mainly from India. By 1900, imports declined, because China was now producing an average of 45,000,000 pounds of opium per annum itself. There were at least 15,000,000 Chinese opium addicts – in Chengdu, there was one opium den for every 67 inhabitants of the city. In Shanghai, some foreign missionaries began to complain that their homes were almost entirely surrounded by opium dens behind bamboo fences. The city had more than eighty shops where the drug was sold openly in its crude form, and there were over 1,500 opium houses. Many of these catered to coolies who could only afford 10 cents for a piece of ‘Tye’, a mixture of opium and the residue of opium already smoked by someone wealthier. Large rooms bare of furniture, in these primitive dens could (and in the slums even now, can) be seen a dozen or more Chinese coolies lying on grass mats, either already insensible or still smoking. Some filthy and in rags, the clientele extended from young boys to old men. The owners of these establishments bought their supplies from three major opium firms in the International Settlement – the Zhengxia, Guoyu and Liwei. All three were owned by Swatow (Chaozhou) merchants who formed a consortium. This consortium obtained its opium from four foreign merchant houses: David Sassoon & Co., E.D. Sassoon, S.J. David, and Edward Ezra.



In November 1906, the Qing dynasty government declared a gradual prohibition of opium over a ten-year period. Britain agreed to reduce the imports of Indian opium from 61,900 chests a year to zero in ten annual instalments, beginning in 1908. In 1909, at the suggestion of U.S. President Roosevelt, the International Opium Commission was created and met in Shanghai. This, as well as the Hague Conference of 1911-12, supported the policy of gradual abolition. Under international pressure, the Shanghai Municipal Council temporarily shut down the opium dens in the International Settlement.



The foreign opium merchants – at this point, mainly Indians and Jewish merchants from Baghdad – responded with a moderately ingenious strategy. They formed the Shanghai Opium Merchants Combine in 1913 and signed an agreement with the Swatow merchants binding the latter to only buy their Indian and Persian opium. This corner the supply of Indian opium and kept the price high. They enlisted the help of the Shanghai Municipal Police, via the Municipal Council, so that only the Combine’s opium could be sold or smoked in the International Settlement. Finally, in return for extra duty payments paid on each opium chest, they reached an agreement with the Yuan Shikai government in May 1915 to keep Jiangsu, Jiangxi and Guangdong provinces open for opium sales until May 17th 1917, the very last day of legal traffic.

Indian opium, much higher quality than Chinese, rose in price dramatically within Shanghai. Between 1912 and 1916, the price for a chest of Bengal opium multiplied by six. The Combine merchants prospered. Even towards the end of legal trafficking, they managed to negotiate with the Chinese government to sell them their remaining stocks at an inflated price. Most of these stocks were destroyed by the Chinese government in January 1919.



Once the legal trade ended, the Swatow group tried to establish a new, illegal, monopoly over opium. This they did with the help of the warlords of Anfu party and that of the Green Gang. The warlords provided protection outside the city, while within Shanghai, the Big Eight Mob kept the opium convoys safe from hijackers as the chests were unloaded from lighters along the Bund. From there the opium was taken to hidden warehouses.



In 1923, the Shanghai Municipal Police created a special drugs squad under the command of Assistant Commissioner M.O. Springfield. The squad recruited informers, patrolled areas used by traffickers and staged raids on hongs and storage facilities. For two years, great damage was done to the dealers in the International Settlement. Huge warehouses owned by the Swatow merchants and protected by the Big Eight Mob were discovered and raided. They decided to move to the comparatively easier environment of the French Concession. Because they needed the help of the Green Gang in the French Concession, the Swatow merchants invited Huang Jinrong (see the Green Gang chapter) to become a full partner in the Joint Prosperity Trading Corporation. This company (in Chinese, the Jufeng maoyi gonsi) was set up in 1919 as a front with the aid of the military governor of Zhejiang province. “Pock-Marked” Huang accepted, and under his protection the opium monopoly’s profits soared.



This arrangement is not completely stable. The hijackings continue, for example. Rival groups of smugglers frequently capture opium shipments at sea, either by force or by coming to an arrangement with the freighter crew (see the Ezra opium case of February 1924). They then smuggle the drug into Shanghai and store it in one of the many underground warehouses constructed by dealers in the International Settlement or the French Concession. The monopoly is also vulnerable due to the ongoing military activity in-country. The Shanghai drug trade is reckoned to bring in $6 million a month for whoever controls the city. Seeing the wealth the trade is generating, other warlords have noted the potential of opium. They know that planting poppies is an excellent way to get enough money to pay their troops. The more opium production that comes out of the provinces and into the city, the less share of the market is controlled by the Shanghai syndicates.



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