When Britain was the largest drug dealer in the World

The British Empire was the largest drug pusher the world has ever seen. By the 1830s the smuggling of opium into China was a source of huge profits and these profits played a crucial role in the financing of British rule in India and were the underpinning of British trade and commerce throughout the East. This is one of those little details that are often overlooked in general histories of the empire, where the opium trade is generally played down and sometimes ignored altogether. Denis Judd’s acclaimed volume, Empire , a 500-page history of the British Empire, has no discussion of either the trade or the wars it occasioned. 1 More recently, the prestigious Oxford History of the British Empire: the 19th Century , edited by Andrew Porter, barely acknowledges the trade in over 700 erudite pages. 2 This is despite its tremendous economic importance: opium is estimated to have been “the world’s most valuable single commodity trade of the 19th century”, 3 and despite the fact that the Second Opium War actually brought about the overthrow of the government of the day in a vote of confidence and forced the holding of a general election, something not even the massive opposition to the recent Iraq war managed. Moreover, the opium trade was, in the words of the historian John K Fairbanks, without any doubt, “the most long-continued and systematic crime of modern times”.

The production of opium in India had come under British control towards the end of the 18th century. In 1775 the British gave the East India Company a monopoly over its production and sale, and towards the end of the century the company established an opium agency to manage the business. Sale and consumption of the product in India itself were successfully discouraged, something which seems to show a clear awareness of its disastrous consequences. 5 The export of opium to China, however, was to develop into a massive concern. In the 1760s some 1,000 chests of opium (each weighing 140 lbs) were smuggled into China, and this figure gradually increased to around 4,000 chests in 1800. In the years from 1800 to 1820 the trade stagnated with an average of 4,500 chests being shipped each year. Expansion only really began after 1820 so that by 1824 over 12,000 chests were being smuggled into China, rising to 19,000 in 1830, to 30,000 in 1835 and to 40,000 chests (an incredible 2,500 tons of opium) in 1838. 6 By this time the opium trade had become a vital national interest, “the hub of British commerce in the East”. 7 The opium trade was one corner of an Eastern “triangular trade” that mirrored the 18th century Atlantic slave trade. The smuggling of opium turned a large British trading deficit with China into a substantial surplus, paying for British imports of tea and silk, for the export of manufactured goods to India and for a substantial proportion of the costs of British rule in India. According to one authority, the opium trade was absolutely crucial “to the expansion of the British Empire in the late 18th and 19th centuries”. This was both because of the revenues it produced and because of the powerful network of “narco-capitalists”, merchants and financiers it created, “who profited from the trade, and whose influence buttressed the imperial lobby throughout the 19th century”. For the British administration in India, opium was its second most important source of revenue and, for most of the 19th century, its most important export. 8 The trade kept the East India Company “afloat financially”. 9 Moreover, as John Wong has shown, it not only turned a British trade deficit with China into a substantial surplus and generated massive profits, but also provided substantial revenues for the British government in London. The duty that was levied on the tea imports, which was paid for by smuggled opium, was sufficient to finance a considerable proportion of the costs of the Royal Navy during the 19th century. The opium trade was clearly not a small-scale affair carried out by small-time crooks and gangsters. Instead it was a massive international commerce carried out by major British trading companies under the armed protection of the British state. According to William Jardine of Jardine Matheson, the most important of the companies involved in the trade, it was “the safest and most gentlemanlike speculation I am aware of ”. In a good year profits could be as high as $1,000 a chest. His wealth was sufficient to buy him a seat in the House of Commons and, as we shall see, to get him the ear of the government. 10 Jardine Matheson and Co was founded in 1832 and was the most successful of the opium smuggling companies. It is still a major financial and trading company today. Jardine’s partner in the enterprise, James Matheson, shows the uses to which the profits from the trade could be put. In the 1840s he too became an MP, sitting in the Commons for some 25 years. He bought the Hebridean Island of Lewis for £500,000, had Stornoway Castle built and cleared more than 500 families off the land, shipping them to Canada. He went on to become chairman of the great P & O shipping line, the major opium carrier for most of the 19th century, a governor of the Bank of England and the second largest landowner in Britain. His successor in the company, Alexander Matheson, a nephew, was likewise to settle on extensive estates in Scotland, bought for £773,000, and was to be an MP for nearly 40 years.

After three opium wars….

What of the opium trade? By the 1860s the British were exporting 60,000 chests of opium to China annually, rising to 100,000 chests (over 6,000 tons of opium) annually in the 1880s. After this the trade began to decline in the face of competition from Chinese produced opium. It still remained a profitable business for the rest of the century and beyond. The British opium trade with China did not finally come to an end until 1917. As for Britain’s pre-eminent position in China, this began to come under pressure from rival imperialist powers towards the end of the 19th century and from Chinese revolutionary nationalism in the early decades of the 20th century. But Britain’s influence was only finally eclipsed in the 1930s.

Source – The Blood Never Dried by John Newsinger