High Times
October 2000
ISN 03626301

Black Market Bones
by RA Kris Millegan

"Motherships" sail up and down the coast. Fast, small craft come out, load
contraband and scoot back to shore day and night. Corrupt officials take
bribes to look the other way. The smugglers live large, build yachts and send
their kids to private schools. Banks and fronts are set up to launder money,
move "product" and avoid scrutiny. Oodles and oodles of money are being made.
The 1980s in Miami? Nope, we're talking about the mid-1800s, when some of
America's oldest fortunes were made in the Chinese opium trade.

"The finest and fastest vessels of their size to be found in any sea, built
by the best naval architects in England, Scotland and America. No cost is
spared in their equipment, their crews large for rapid evolution, and their
captains are the most skilled and dashing sailors to be found." So wrote
missionary John Johnstone in the 1850s as he traveled by opium clipper to his
station along the China coast.

You see, by the mid-1830s the trade in opium was the largest commodity market
on the planet. And as Carl A. Trocki's excellent book Opium, Empire and the
Global Economy (1999) points out:

 "The trade in such drugs  results in  monopoly which not only centralizes
the drug traffic, but also restructures  the social and economic terrain in
the process.  Two major effects are the creation of mass markets and the
generation of enormous ... unprecedented, cash flows. [Which]  results in the
concentrated accumulation of vast pools of wealth. [Which]  have been among
the primary foundations of global capitalism and the modern nation-state
itself. Indeed, it may be argued that the entire rise of the West, from 1500
to 1900, depended on a series of drug trades.

"Drug trades destabilized existing societies not merely because they
destroyed individual human beings but also, and perhaps more importantly
[they] undercut the existing political economy of any state. They have
created new forms of capital; and they have redistributed wealth in radically
new ways.

"It is possible to suggest  that mass consumption, as it exists in modern
society, began with drug addiction. And, beyond that, addiction began with a
drug-as-commodity. Something was necessary to prime the pump, as it were, to
initiate the cycles of production, consumption and accumulation that we
identify with capitalism. Opium was the catalyst of the consumer market, the
money economy.

"Opium created pools of capital and fed the institutions that accumulated it:
the banking and financial systems, the insurance systems and the
transportation and information infrastructures."

 One might say, "Who controls opium controls "

Fast Ships, Drugs and Money
"When we sold the Heathen nations rum and opium in rolls, And the
Missionaries went along to save their sinful souls." The Old Clipper Days
-Julian S. Cutler

The Portuguese, Dutch, French, British and others began trading in opium soon
after the first contact with China. Because the Chinese desired few trade
goods, the Western nations soon became short of silver to purchase tea, silk,
porcelain and other desired items. Fueled by both economic and imperialistic
motives, the opium trade grew from around 200 chests (16 tons) a year to
4,200 chests (336 tons) by 1820, with the majority imported from India and in
the hands of British traders. But the times were a'changing.

The upstart Americans introduced their famous clipper ships expressly for the
"China trade," and in the 1830s the price of opium went down and shipments of
opium to China went up. Shipments in 1830 were four times what they had been
in 1820; by 1838, they'd more than doubled again. The opium clipper, with its
ability to sail against the monsoons, sometimes made three round-trip
journeys within one year, instead of taking up to two years. Profits were
huge, and there was a large flow of silver being introduced from China into
booming Western economies.

In early 1837 there was a crash in the opium market, and the speculators'
losses reverberated around the world in a financial panic, in which specie
became scarce both in Britain and the US. Smuggler Robert B. Forbes lost his
first opium fortune in the "Panic of 1837," and returned to China for more.
He had built a house, (now a museum) in Milton, Massachusetts (not far from
where former President George Bush was born). Forbes had a special ship
built: the "Lintin," a "storeship" named after an anchorage where he spent
many years warehousing and selling contraband opium to Russell & Co. Chinese
customers. Forbes would tell Chinese officials and others that he didn't deal
in opium. But he was actually engaging in word games, and/or "transferring"
the opium trade to front companies.

Russell & Co. was the largest American opium smuggler, and the third largest
in the world, behind the British Dent firm and the largest smuggler of all,
the Scottish merchants Jardine-Matheson. For many years Russell & Co and
Jardine-Matheson worked together and were known as the "Combination." They
virtually controlled the trade, manipulating market forces towards maximizing

Russell & Co. was started in 1824, by Samuel Russell of Middletown,
Connecticut. In 1828 it "absorbed" the T.H. Perkins opium concern of Boston,
and became America's dominant force in China. Russell & Co. was very much a
family affair, with uncles, cousins, brothers, fathers and sons dominating
the firm and its allied banks and fronts.

The Russell family was steeped in Yale College history. The Rev. Nodiah
Russell was a Yale founder. And in 1832, Gen. William Huntington Russell,
Samuel Russell's cousin, founded one of the US' most famous secret societies:
The Order of Skull and Bones, along with Alphonso Taft. Taft's son, future
President William Howard Taft (S&B 1878), would play many roles in the
creation of international narcotics controls and the US Drug War.

The Opium Wars
"I had not come to China for health or pleasure, and that I should remain at
my post as long as I could sell a yard of cloth or buy a pound of tea."
-R.B. Forbes to Capt. C. Elliot, British Superintendent of Trade, in refusing
to leave Canton during the first Opium War

Relations between the West and the China had always been strained. The
Chinese emperor would only receive Western ambassadors as if they were
tribute-bearing vassals, and in the highly structured social caste of China,
merchants were not worthy of respect, let alone discourse at an official
level. For many years dealings with Westerners were delegated to a few "Hong"
merchants, who paid for the privilege and had to vouchsafe the foreigners'
commercial dealings. The term "pidgin" English came from the Hong merchant
pronunciation of the word "business," for the English that was used to
conduct affairs with the "white devils."

Chinese High Commissioner Lin Tse-hsu came to Canton in 1839 with an order to
"investigate the port affairs." The first edict against opium had come in
1729; another against smoking came in 1796. The trade had grown to 40,000
chests by 1838. Smoking, a novel, more soporific and addictive manner of
using opium, plus the encouragement of the trade by the British and others,
had devastated all segments of Chinese society. Corruption, smuggling and
smoking were rampant, creating apathy, and the trade was also draining
China's treasury.

Lin couldn't believe that opium was legal in Britain, and wrote a letter to
Queen Victoria to implore her aid in stopping the trade. He disrupted the
local merchants and published new edicts against the use and importation of
the drug. Lin demanded that all chests of opium be forfeited as contraband,
and all trading houses sign a bond, pledge to smuggle no more and become
liable to Chinese law, which included the death penalty. Through threats, a
servant walkout, giant gongs that were rung all night and other measures, he
was able to collect over 20,000 chests of opium (about half of that year's
Indian trade). Then under orders from the emperor, he destroyed it all.

This sparked the first Opium War, made huge profits for those companies that
had held on to chests, and left Russell & Company the only trading firm left
open in Canton.

During that first Opium War, the chief of operations for Russell & Co. in
Canton was Warren Delano, Jr., grandfather of Franklin Roosevelt. He was also
the US vice-consul and once wrote home, "The High officers of the [Chinese]
Government have not only connived at the trade, but the Governor and other
officers of the province have bought the drug and have taken it from the
stationed ships in their own Government boats." Wu Ping-chen, or Howqua II,
the leading "hong" merchant, was considered by some to be one of the world's
richest men, worth over $26 million in 1833.

Serious Business
"If the trade is ever legalized, it will cease to be profitable from that
time. The more difficulties that attend it, the better for you and us."
 -Directors of Jardine-Matheson

The profits were huge and many fortunes were made. Warren Delano went home
with one, lost it and went back to China to get more. Russell & Co. partners
included John Cleve Green, a banker and railroad investor who made large
donations to and was a trustee for Princeton; A. Abiel Low, a shipbuilder,
merchant and railroad owner who backed Columbia University; and merchants
Augustine Heard and Joseph Coolidge. Coolidge's son organized the United
Fruit Company, and his grandson, Archibald C. Coolidge, was a cofounder of
the Council on Foreign Relations. Partner John M. Forbes "dominated the
management" of the Chicago, Burlington and Quincey railroad, with Charles
Perkins as president. Other partners and captains included Joseph Taylor
Gilman, William Henry King, John Alsop Griswold, Captain Lovett and Captain
J. Prescott. Captain Prescott called on F.T. Bush, Esq., his friend and agent
in Hong Kong, frequently.

 Russell & Co. families, relations and friends are well represented in the
Order of Skull and Bones.In 1856, Daniel C. Gilman (S&B 1852), a Russell &
Co. partner relation, incorporated the Order of Skull & Bones as the Russell
Trust Association, with General W.H. Russell as its president

 After the first Opium War, the port of Shanghai was opened up, with Russell
& Co. as one of it first foreign merchants. In 1841, Russell brought the
first steam ship to Chinese waters and continued to develop transportation
routes as long as opium made them profitable. Russell partners were also
involved in early railroad ventures in China, together with US railroad
magnate E.H. Harriman, whose sons later became very active in Skull and Bones.

The second Opium War led to the legalization of opium in China in 1858, and
the "country traders" began to lose their control of the business. They were
just smugglers warehousing the "product" offshore and plying up and down the
coast delivering opium to Chinese "compradors." Once opium was legalized,
Chinese and Indian merchants started to take over the trade. Russell and
others, with their limited role as smugglers, hadn't developed any structure
to sell opium in inner China. The Chinese brokers could now just order opium
just like any commodity, and the trade was transferred to firms with strong
ties at the producing base, India, and the consuming giant, China.

The old Western trading firms set up banks, transferred assets to other
schemes and tried to capitalize on their "China trade" experience, but none
of these ventures had quite the same level of profitability. Russell & Co.
formed the Shanghai Steam Navigation Company, but in 1877 sold it to the
China Merchant's Steam Navigation Company, and the American share of Chinese
shipping dropped by 80%. Some sources say Russell failed in 1891, with
British and German firms taken over their business. According to others, the
company's successor in Shanghai was Shewan & Tomes. .

The Modern World: Prohibition, Smugglers and Spies
"The Money from the drugs produced the money for the guns, and that is how
the operation worked, and Bush knew the whole goddamn thing."
-CIA operative Trenton Parker, in Rodney Stitch's Defrauding America

 Ironically, the scions of these 19th-century opium fortunes would go on to
play key roles in the Drug Wars of the 20th century: in both the enactment of
drug prohibition and in the clandestine arrangements between smugglers and
government spies.

In 1898, the Spanish-American War signaled the United States' debut as a
global imperial power. American troops invaded Manila, and three years later,
after a brutal guerrilla war, the Philippines became a colony of the US.
President Theodore Roosevelt appointed Bonesman William Howard Taft to serve
as the first civil governor of the islands. (Patriarch Bonesman Henry Stimson
(S&B 1888) plus some Russell & Co. relations, later held that post.) Taft
stayed on in the Philippines until 1904, even turning down a much-desired
appointment to the US Supreme Court.

In 1903 the Philippines became the first modern nation in Asia to declare
opium illegal. Soon there was a black market, and smuggling again began
developing into a major force. Taft succeeded Roosevelt as President in 1909,
and actively promoted federal legislation and international conventions to
outlaw and "control" certain drugs. These international treaties helped to
break down judicial reluctance, and brought claims of the extraconstitutional
force of international treaty obligations into the enabling of US drug
laws-thus creating a profitable prohibition. And entangled in many of the
recent nexuses of smugglers and spies is George H.W. Bush (S&B 1948), one of
scores of men from old-money families who wound up playing a prominent role
in the covert-action realms of US foreign policy.

We have been told the CIA agent George Bush who J. Edgar Hoover mentioned in
a FBI memo concerning the John F. Kennedy assassination and Cubans was not
THE George Bush. We have been told that Bush, then vice president, was "out
of the loop" for the Iran-Contra scandal of the 1980s, in which the US
government either looked the other way or actively aided the Nicaraguan
rebels' cocaine trafficking. Some of this we know to be lies.

Spooks, smugglers, and secrets seem to converge in a netherworld rapidly
being exposed by researchers fueled by the Internet's capabilities of
networking, discussion and informational exchange. Former federal
prosecutors, journalists, authors, professors, researchers and others tracing
the drug trade from many different directions all seem to end up with certain
groups of high-level operatives being involved with this illicit trade in
both drugs and arms. And many leads seem to point to George H.W. Bush and
friends as the "elite deviants" involved in these schemes. "Many of the
scandals that have occurred in the US since 1963 [and] are fundamentally
interrelated," sociologist David Simon wrote in Elite Deviance. "That is, the
same people and institutions have been involved."

The mainstream media ignores it all, even the most recent startling
revelations in the CIA's own Volume II of [TK] hearings, which in no
uncertain terms lay out involvement in drug smuggling by US intelligence
operatives in Central America, especially Lt. Col. Oliver North and other
folks with strong contacts with George H.W. Bush.

And "Poppy" Bush also has kept alive the tradition of fast boats and
smugglers. There was his friend Don Arnow, the "cigarette boat" builder/mob
smuggler who was shot and died slumped over his steering wheel. As did
another intelligence-connected drug-smuggler, Barry Seal, who died with
Bush's private phone number in his wallet.

With the current opiate epidemic closely mimicking the classic
nation-destabilization/fortune-building imperialistic opium policy used
against China in the 1800s, many drug-trade researchers question just what is
going on where the higher echelons of the drug trade meet the secret branches
of government.

 Is the "official" prohibition one of collusion for political control, social
engineering and the huge profits derived from illicit goods? Is all the
heroin on the street there just because there is a market full of desirous
buyers? Or is a "secret government" using intelligence and military
operatives in a massive drugging of our nation? Who runs it and where does the
 money go? Is it government-sanctioned," under some twisted "national
security" mantle?

Heroin is at an all-time high in purity, and at bargain-basement prices in a
black market with younger and younger customers. It has gone from costing
$300 a gram and being scarce in the 1960s to being everywhere and costing
just $100 a gram in 2000, while marijuana has gone from $10 to $300 an ounce
and has gotten somewhat harder to get. Is this by chance?

Aloha, He'Ping,
Om, Shalom, Salaam.
Em Hotep, Peace Be,
All My Relations.
Omnia Bona Bonis,
Adieu, Adios, Aloha.
Roads End

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