All About Opium with Carl Zha

Today, we have Carl Zha from the Silk and Steel Podcast joining us to discuss the Opium wars.

Show Notes

0:00:00 - 0:03:12 - Introductions

0:03:14- 0:05:20 - Opium Beginnings

Originally, opium was ingested orally. However, ingesting it in large quantities lead to death because it stopped breathing. However, after Europeans colonized the New World, they brought back tobacco from the Americas. Particularly, the Spanish and the Portuguese, who brought it to the Philippines and Malaysia, both countries had a significant Chinese diaspora. Later, when the Dutch colonized Indonesia, they, too, brought tobacco. Now, Opium was mixed with tobacco and it could be smoked allowing for consumption in larger amounts without death.

0:05:21- 0:07:08 - Damn British and Opium

Opium, itself, is not grown in china. It is grown outside of China and had to be imported. India grew Opium. In the Late 18th century when the British Colonized India, they forced the farmers in India to grow opium. Their policy of making Indian farmers grow Opium was responsible for many famines.

The British East India Company (BEIC) would license the opium through their opium monopoly. They would sell the opium to individual traders who would carry them into China, because the British want plausible deniability. If someone every questioned them, they would say, “Oh, we are the venerable British East India company. We don't we don't actually believe in the opium trade.”

0:07:08- 0:08:01 - Smoke and Mirrors

The BEIC ships the opium, but the individual parcels will be parceled out and sold to employees of BEIC. A famous opium smuggler is William Jardine, who started as a sergeant under the BEIC. As an employee of the BEIC, he got his own cargo space on their shops which was used to ship opium that he sold to China.

0:08:02- 0:09:48 - China’s Opium Epidemic

Opium was illegal in China and soon the Chinese government realized they had a crisis. Initially, opium was a luxury good because it was not grown in China. However, the innovation of the BEIC flooded the market with cheap opium. Now, laborers could afford it. It blossomed into a full-blown opium crisis.

0:09:49- 0:13:42 - Limits on Foreign Trade

Originally, foreign presence in China was curtailed. It was limited to a few port ciites and the British could only stay for 6 months before having to go to the island of Macau. The British weren’t happy that they could only conduct trade in the city of Canton. The British had to resort to selling opium because originally their product was not competitive.

British had developed a taste for Chinese tea, and they needed silver to trade because China had gone into the Silver standard.

0:13:43 - 0:14:48 - The Magic Formula

Soon, the British hit the magic formula of selling drugs to the Chinese to drain China of it’s silver. The British ran a trade deficit with China prior to the massive operation of opium smuggling. According to some estimates, 50% of the silver mined in the South America is from the 18th and 19th century, ended up in China. The British just decided to sell drugs to drain the silver.

0:14:48 - 0:18:28 Enter Americans

During the founding of the United States, most of the New England old money was made in the opium fortune. There was Astor who has an area in Queens named after him: Astoria. Other families who made their fortune through the Opium Trade:

* The Forbes Family whose descendant John Forbes Kerry was Secretary of State under Obama.

* The Delano Family - FDR’s Grandfather.

* HSBC bank

During a famine in Guangzhau, American traders hid opium under bags of rice. All the Ivy league universities were also heavily invested in the opium trade. That’s how America was founded on: Drugs and Slaves.

0:19:24 - 0:25:47 China Fights Back