-Caveat Lector- from: http://www.druglibrary.org/schaffer/heroin/historic.htm INTERIM DRAFT FINAL REPORT: HISTORICAL REVIEW OF OPIUM/HEROIN PRODUCTION by Alfred W. McCoy CONTENTS: I. Executive Summary: II. Analysis of Epochs, Trends & Causality: 1.) Glossary of Basic Concepts. 2.) Opium as Folk Pharmacopoeia (Up to 1600). 3.) Early European Opium Trade (1640-1773). 4.) Era of European Mercantilism (1773-1858). 5.) High Imperial Opium Trade (1858-1907). 6.) Multilateral Control & Syndicate Crime (1907-1940). 7.) War & Transition (1940-1947). 8.) Cold War Opium Expansion (1948-1972). 9.) Origins of US Bilateral Suppression (1973-1979). 10.) Production Increase in Asian Zone (1979-1989). 11.) Global Proliferation of Opium (1989-1994). III. Policy Implications & Recommendations: IV. Notes on Text & Tables: V. Graphs, Tables: ===== Excerpt: 4.) Era of European Mercantilism (1773-1858): a.) Summary of Text in "Politics of Heroin" (pp. 80-89): The modern era in the global opium trade began in 1773 when the British Governor-General of Bengal established a monopoly on the sale of opium. Over the next 130 years, Britain actively promoted the export of Indian opium, defying Chinese drug laws and fighting two wars to open China's drug market for its merchants. Under the British, Indian opium became a major global commodity, giving this modern commerce a scale and organization that distinguishes it from earlier forms. When the East India Company conquered Bengal, it took control of a well-established opium industry involving peasant producers, merchants, and long-distance traders. In 1773, the British Governor abolished the Indian opium syndicate at Patna and established a colonial monopoly on principles that operated for the next half-century. Under the new regulations, the Company had the exclusive right to purchase opium from Bengal's farmers and auction it for export. Realizing that opium was illegal in China, the Governor barred the Company's ships that called at Canton to load tea from carrying opium, leaving actual sale of the addictive drug to the private European merchants who bid at the Company's Calcutta auctions. In 1797 the Company eliminated the local opium buyers in Bengal and established a system of direct collection that lasted for over a century. Under the new procedures, the Company, and the colonial state that succeeded it, controlled opium cultivation, processing, and export. At its peak in the late 19th century, Bengal's opium country stretched for 500 miles across the Ganges River Valley, with over a million registered farmers growing poppy plants exclusively for the company on some 500,000 acres of prime land. From their factories at Patna and Benares in the heart of opium country, senior British officers directed some 2,000 Indian agents who circulated through the poppy districts, extending credit and collecting opium. Processed under strict supervision at the two Company factories, the opium was packed into wooden chests, each containing forty balls and weighing 140 pounds. Bearing the "Patna" and "Benares" trade-marks, the chests were sent down to Calcutta under guard and sold at auction to private British merchants. Since the Chinese state had damned opium as a "destructive and ensnaring vice" and banned all imports in 1799, British sea captains bribed Canton's mandarins and smuggled the chests into southern China where the Bengal brands commanded twice the price of the inferior local products. For its first quarter century, this system assured prosperity for British India and a stable opium supply for China. Not only did opium solve the fiscal crisis that accompanied the British conquest of Bengal, it remained a staple of colonial finances, providing from six to fifteen percent of British India's tax revenues during the 19th Century. More importantly, opium exports were an essential component of a "triangular trade" that was central to England's position as a world power. Trade figures for the 1820s, for example, show that the triangular trade was large and well balanced: 22 million pounds sterling worth of Indian opium and cotton to China; next, 20 million pounds worth of Chinese tea to Britain; and, then, 24 million pounds of British textiles and machinery back to India. In managing this trade, the Company prized stability above profit, and for over twenty years it held India's opium exports at 4,000 chests--or 280 tons, just enough to finance its purchase of China's tea crop. The system's success was the cause of its downfall. The vast profits of the Britain's opium trade attracted competitors. Moreover, the Company's steadfast refusal to raise Bengal's opium exports beyond the quota of 4,000 chests per annum left a vast unmet demand for drugs among China's swelling population of opium smokers. As demand drove the price per chest upward from 415 rupees in 1799 to 2,428 rupees just 15 years later, the Company's monopoly on Bengal opium faced strong competition from Turkey and west India. Britain's most daring rivals were the Americans. Barred from bidding at the Calcutta auctions, Yankee traders loaded their first cargoes of Turkish opium at Smyrna in 1805 and sailed them around the tip of Africa to China. Through these efforts, Turkish opium remained an alternative to the Bengal brands until 1834 when the Yankee captains were finally allowed to bid at the Calcutta auctions and abandoned the long haul around Africa. The major threat to the Company's monopoly, however, came from Malwa opium grown in the princely states of west India. Malwa opium captured 40 percent of the China market by 1811. Determined to defend their trade, the Company's directors decided to promote unlimited production in Bengal. In 1831 the Governor-General of India, Lord William Bentinck, toured the upper Ganges with revenue officers to explore new areas for poppy farming and within the decade cultivation doubled to 176,000 acres. After the East India Company lost its charter in 1834, its informal regulation of the China opium trade collapsed, allowing profit-hungry American and British captains to take control. Indeed, the Company's demise launched a fleet of new "opium clippers" to tack to China against the monsoon winds. As the Company loosened its restrictions in the 1820s and then lost its monopoly in 1834, China's opium imports increased nearly ten fold--from 270 tons in 1820 to 2,558 tons twenty years later. Opium addiction spread rapidly, reaching some three million Chinese addicts by the 1830s. In defense of its commerce, Britain fought two wars along the China coast in 1842 and 1858, forcing the empire to open itself to unrestricted opium imports. In 1838, the Emperor's launched a moralistic anti-opium campaign that threatened Britain's China trade, and London dispatched a fleet of six warships, capturing Canton in May 1839. The First Opium war ended in 1842 with the Treaty of Nanking which required China to cede Hong Kong, and open five new ports to foreign trade. But China still refused to legalize opium. The fifteen years following the First Opium War brought a new peak in the China trade. Illicit imports of Indian opium nearly doubled, rising to 4,810 tons in 1858. At the Calcutta auctions, frenzied bidding drove opium prices and profits to new heights, making a fast run to the China coast essential and launching 48 new clippers for the opium fleet. Among the 95 clippers in the fleet, the Calcutta's Cowasjee family owned six, the Americans of Russell & Co. had eight, and the British giants, Dent and Jardine, operated a total of 27. The era of the opium clipper ended when China finally legalized the drug trade after its defeat in the Second Opium War (1856-1858). In negotiations over the tariff provisions of this new treaty that ended the war, the British emissary Lord Elgin forced the Chinese to legalize opium imports. In the aftermath of legalization, Chinese officials began encouraging local production, and poppy cultivation spread beyond the country's southwest. As addiction spread throughout China, imports of Indian opium rose from 4,800 tons in 1859 to 6,700 tons twenty years later. After peaking in 1880, Indian imports declined slowly for the rest of the century as cheaper, China-grown opium began to supplant the high-grade Bengal brands. b.) Causality underlying above changes: 1.) Demand Increasing Ahead of Production: It appears that opium, once commercialized as recreational euphoric, produces a disproportionate demand that soon exceeds the original supply. In this case, the carefully controlled number of chests from Bengal soon proved insufficient for the demand in China. The result was stimulation of production in other opium regions. Thus, Malwa and Turkish production increased to help meet China's growing demand. In the end, England capitulated to market pressures, abandoned its self-imposed restraint, and encouraged an expansion of opium production in India. Once introduced, commercial opium stimulated demand in China beyond supply, encouraging thereby increased cultivation back in India; which, in turn, stimulated more demand in China, sparking, yet again, higher poppy plantings in India. In effect, even in this earliest era of commoditized opium trading, demand and supply increase through a process of reciprocal stimulation that makes it difficult, analytically, to determine which is the dominant cause. During the 18th and 19th Centuries, China had a limitless capacity for opium consumption that continually outstripped all production, both local and global. 2.) Changes in Shipping Technology: Since there was now an unlimited amount of opium that could be grown in India, improvements in shipping technology were needed to move greater amounts to China. Hence, a competition and the appearance of the clipper ship. Speed now determined profitability in the opium trade. 3.) Chinese Government Policy: The Chinese Imperial decrees of 1729 and 1799 banning opium smoking and importation did not restrain the rising addiction problem. However, the legalization of opium consumption in 1858 encouraged a sharp rise in both production and consumption. With legalization, domestic opium superseded imports, making speed less important in the shipping of opium and allowing steamships to replace the clippers. Thus, we must conclude that China's policy of prohibiting opium consumption and cultivation from 1729 to 1858 assured the East India Company a de facto monopoly over this fast growing market and created the basic underlying conditions for the hyper profitability of the India-China opium trade. Without this prohibition on cultivation, China could have reacted the Company's aggressive exports of Bengal opium by encouraging local opium harvests and destroying both market and profits for the Indian imports. As it was, China's addicts and their near insatiable demand for the illicit drug created high profits and inspired ferocious competition among merchant captains competing for a share of this lucrative market--English out of Calcutta, Indian and English out of Bombay, and Americans out of Smyrna, Turkey. 4.) Nature of Chinese Demand: In the midst of the acute demographic and caloric crisis of southeastern China in the late 18th and early 19th Centuries, opium attributes as a appetite suppressant may have increased its appeal to users at a time of scarcity and high food prices. At certain periods, the use of opium may have suppressed appetite sufficiently to make its addiction economical in comparison to the cost of eating a normal diet. 5.) Economics of European Mercantilism: In colonial Asia of this period (1773-1858), all successful European economic initiatives involved commercialization of drugs in some form--caffeine, nicotine, or opiates. This 18th century trade transformed these drugs from luxury goods into commodities of mass consumption, making them integral to the economies and lifestyles of both Asian and Atlantic nations. In Java after 1720, the Dutch V.O.C. collected a tax in coffee in the Priangen region of west Java and made vast profits through sales in Europe and America, becoming the globe's greatest coffee broker and gaining thereby a substitute for its substantial share of the China opium trade lost to Britain after 1720. Consciously imitating the V.O.C., Bourbon Spanish reformers in Manila established the Tobacco Monopoly in the 1782 and, for the next century, financed their colonial administration from their exclusive control over the cultivation and sale of this addictive drug to Filipinos. In Bengal, the British East India Company imposed a monopoly over opium in 1773 and used its sale to China to finance purchase of caffeine, in the form of tea, for export to Europe and North America. Within the monopolistic logic of mercantilism, the East India Company achieved the highest profits from opium because, from 1773 to 1830, its strong controls over key aspects--production, export, and sales. c.) Statistical Evidence from Text & Sources, "Politics of Heroin": 1.) Increase/decrease in World Opium Production: --The area under cultivation in Bengal, India increased from 90,000 acres in 1830, to 176,000 by 1840, and, finally, a peak of 500,000 acres by 1900. 2.) Changes in Opium Cultivation by Region: --Reflecting directly increases in production, Indian opium exports to China rose from 75 tons in 1773 to 4,810 tons in 1858--a sustained, high-level of growth over the space of 75 years. --Again reflecting increases in production, Turkish exports to China increased from 7 tons in 1805 to 100 tons in 1830--creating another instance of steady, high-level growth in production over a protracted period. 3.) Changes in Quantity of Opium Consumption by Region: --Rising from insignificant levels in the early 1700s, by the 1830s China had an estimated 3 million opium smokers. --US imports of opium rose 8 tons in 1840 to 62.7 tons in 1858. d.) Summary and Analysis of Trends within Epoch: >From the late 18th century onward, opium became a major trade commodity. Under the British East India Company (BEIC), centralized controls accelerated the export of Indian opium to China--from 13 tons in 1729 to and 2,558 tons in 1839. Using its full military and mercantile power, Britain played a central role in making China a lucrative drug market. The Company's steadfast refusal to raise Bengal's opium exports beyond its self-imposed quota of 4,000 chests per annum left a vast unmet demand for drugs among China's swelling population of opium smokers. When demand drove the price per chest upward from 415 rupees in 1799 to 2,428 rupees just 15 years later, the East India Company's monopoly on Bengal opium faced competition from Turkey and west India. As the Company loosened its restrictions in the 1820s and then lost its monopoly in 1834, China's opium imports increased nearly ten fold--from 270 tons in 1820 to 2,558 tons twenty years later. Opium addiction grew rapidly, reaching some three million Chinese addicts by the 1830s. Simultaneously, China's illicit imports of Indian opium nearly doubled, rising to 4,810 tons in 1858. DECLARATION & DISCLAIMER ========== CTRL is a discussion and informational exchange list. Proselyzting propagandic screeds are not allowed. Substance—not soapboxing! These are sordid matters and 'conspiracy theory', with its many half-truths, misdirections and outright frauds is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. 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