Hong Kong’s Maritime Trade, Part IV: Opium

On Christmas Day, 1881, a steamship named City of Tokio arrived in San Francisco from Hong Kong and moored at the First Street pier just south of the city centre. Nine days later, just after midnight, a pair of police officers were in a patrol boat when they noticed a smaller vessel lurking near the steamship. When they began to approach, two men on the boat began to row away, and the police officers gave chase. They soon caught up with the mysterious vessel and boarded it, discovering 97 tin cans with the unmistakable labels of Lai Yuen and Fook Loong: two famous brands of Hong Kong opium.

All told, there had been 100 tins on the boat — three had been thrown overboard when the police approached — containing 2,000 pounds of opium worth US$25,000, nearly $750,000 in today’s dollars. In the cold night air, police slapped heavy iron handcuffs on the two men on the boat, James K. Kennedy and his boatman, McDermott, and placed them under arrest. Customs officers arrived, determined the opium had been smuggled into the United States from Hong Kong, and seized the cargo. 

But then the case took an unusual turn. Kennedy sued the US government, claiming the opium had not been smuggled at all. Instead, he said had taken harsh, high-morphine Turkish opium refined in New Jersey, and relabelled it as premium Hong Kong opium. Sourced from India and known for its relatively low morphine content, Hong Kong-refined opium fetched a premium on the market. In court, Kennedy testified that he planned to smuggle the drug into Hawaii, where it was illegal, which meant it fetched astronomical prices on the black market. And so even if he was planning to commit a crime in Hawaii — which at the time was still an independent kingdom — he argued that no crime had been committed in the United States, since opium was entirely legal and there was no law against counterfeit packaging.

The man who supplied Kennedy with the opium, a San Francisco businessman named Choy Lum, testified in great detail about how he had swapped his company’s own labels with those of the famous Hong Kong brands. An engraver was called in to examine the tins, determining that they had indeed not been produced in Hong Kong. Finally, in order to prove the opium was low-grade Turkish product and not the premium Indian stuff, a prodigious opium smoker named Mun Tong was called into court, where in front of the judge, he smoked three pipefuls of each of 16 opium samples — it took him three hours — and correctly identified 15 out of the 16.

Despite all of this evidence, the judge ruled against Kennedy. (A summary of the case is available online.) He claimed that he could not prove beyond a reasonable doubt that the opium had not been smuggled from Hong Kong. The drug remained in the custody of US customs, which eventually put it up for auction.

“The opium ships at Lintin, China,” an 1824 painting by William John Huggins that depicts opium traders off the coast of Tuen Mun

It’s an amusing bit of history, one that illustrates the extent to which opium was freely traded in the late 19th century. And it underlines just how much Hong Kong was intertwined with the opium trade. It wasn’t just one of the industries that Hong Kong was known for; it was the industry, the city’s entire reason for existence. Britain won control over Hong Kong Island as a result of the First Opium War (1839–1842) and Kowloon after the Second Opium War (1856–1860). And it wasn’t just a spoil of war: it was a deliberate attempt to create a secure base for trading opium, which filled the coffers of the British Empire like nothing else. 

Opium is obtained from the dried latex of poppy seed pods. Archaeological evidence suggests that people have been consuming it for at least 7,000 years, and its use as both medicine and recreational drug goes back many centuries. In China, it was consumed mainly as an aphrodisiac, and almost exclusively by the upper classes. But everything changed when European traders introduced the concept of smoking opium mixed with tobacco. Soon enough, Chinese consumers dispensed of the tobacco entirely, smoking enough pure opium that Qing Dynasty rulers began to see it as a problem. Opium was banned in 1729, but this had little effect on consumption. 

This was an opportunity for Great Britain, which had long been frustrated by what it saw as an unequal trading relationship with China. British consumers were eager for Chinese porcelain, silk and tea, but China wanted little in return. Opium was how Britain rectified the trading deficit. That eventually led to conflict with China, a topic on which many books have been written. Of the most recent, The Opium War by Julia Lovell is a particularly enlightening account that undoes many of the myths that have been spun out of the complicated history of the 19th century opium trade, including the Western perception that China was a closed-off, xenophobic society that invited war upon itself, and Communist Chinese propaganda that paints the wars as the beginning of China’s “century of humiliation.”

And yet no books have been written about the opium trade in Hong Kong specifically. The most comprehensive account is a master’s thesis published in 2004 by University of Hong Kong student Tiziana Salvi, “The Last Fifty Years of Legal Opium in Hong Kong, 1893–1943.” And what it reveals is that, by modern standards, Hong Kong was a narco state. In 1847, opium represented 86 percent of Hong Kong’s exports by value. In some years, Salvi notes, opium represented 45 percent of the Hong Kong government’s total tax revenue. In those early days of colonial Hong Kong, opium was everything. 

Nearly everyone who did business in the colony was involved to some extent in the opium trade. “Finding businessmen of any ethnicity who were not involved is a challenge,” notes history writer Jason Wordie.

Hormusjee Naorojee Mody, chief benefactor of the University of Hong Kong? Opium trader. Jardine Matheson, whose Jardine House is an iconic feature of Hong Kong skyline? Major opium traders. Even Swire, which never dealt directly in opium, transported the substance on its ships. The few Hong Kong merchants who weren’t involved at least indirectly were anti-opium crusaders like David Olyphant, whose opposition to the drug was based on moral and religious principles. 

All of this was encouraged by colonial authorities. “Born as a free port where merchants of many nationalities aggressively safeguarded the free trade system, there was only one avenue for the colonial government to bring in revenue: opium,” writes Salvi. At first, the government instituted a system known as the opium farm, based on a model that worked well in Singapore, in which the right to deal in opium was granted by public auction to the highest bidder. The first “farmers” were British entrepreneurs Alexander Mathieson and George Duddell (after whom Duddell Street is named). But opium smuggling was rampant and without adequate connections to the Chinese community, their business failed. The next opium farmers were always Chinese businessmen, and their success laid the groundwork for a local Chinese elite that would eventually rival the colonial British one.

The farmers did everything they could to consolidate their power, going so far as to raid the private houses and ships of anyone they suspected was dealing opium. That eventually led many Chinese traders to avoid Hong Kong entirely. Seeing this drop in economic activity, the colonial government decided to abolish the farming system in favour of open licences: anyone who paid for one could trade in opium. But this was also a failure, thanks largely to unchecked smuggling. Over the next several decades, the government alternated between the opium farm and a licensing system, struggling to find the right balance. 

Things finally came to a head in 1914 when the government took full control of the opium trade. “The government monopoly for the production and distribution of [opium] would finally give the government the freedom to change or adjust legislation as needed without the spectre of compensation to the opium farmer,” writes Salvi. “For the first time, the authorities were able to directly access the full potential of the drug market, which was to become the major reason for the strenuous resistance that all future colonial governments had towards any possible decision to outlaw the practice of opium smoking in the colony.”

An opium seller in the early 1900s. Artist unknown. Image via Wikimedia

Which raises the question, just who was smoking opium in Hong Kong? “Potentially anyone could have been an opium smoker,” notes Salvi. In the West, opium was associated with exotic Chinatown dens where Chinese men and the occasional white bohemian wasted away in a haze of smoke. And that was certainly true in Hong Kong, where countless opium dens operated throughout the city. But there were many respectable members of society who consumed opium. In the Chinese population, at least, opium was ubiquitous. 

“For the wealthy class, it basically remained a leisure activity and a way of showing off their status,” writes Salvi. “For the coolies, it became the means of bearing the harshness of life, especially for those who emigrated in search of jobs. Alone, living in poor conditions, without the support of the family, they found in opium a way to fall into oblivion, forgetting the pitiable reality of their existence.”

But an anti-opium movement was growing in the West. It was part of the same temperance movement that targeted alcohol, tainted by a heavy streak of anti-Asian racism, the same racism that led the United States and Canada to ban Chinese immigration in 1882 and 1923, respectively. Colonial governments in Asia resisted any move to restrict opium, not only because of the lavish tax revenues, but because colonial administrators saw opium as preferable to alcohol; better a docile population of opium addicts than a volatile crowd of drunks. But international pressure kept growing, backed by the growing political might of the prohibitionist United States. When the British regained control of Hong Kong after the Japanese occupation from 1941 to 1945, they finally banned opium. 

Of course, opium didn’t just disappear from the streets of Hong Kong. Instead, it moved underground, and opium dens became fly-by-night affairs. “Opium smoking booths moved frequently,” lifelong Yau Ma Tei resident Chan Kwong-yiu told the HK Memory oral history project. But some simply reopened in the same place after being raided by police, as was the case for a particularly notorious opium den across from the Yau Ma Tei Theatre. When legendary gangster Ng Sik-ho was arrested in 1974, he was found with 20 tonnes of opium and morphine. Opium dens were being raided as late as 1994, when police noticed smoke billowing from a shack near a Sha Tin housing estate and discovered elderly men smoking opium inside. 

Today, the opium trade has all but vanished, replaced by other drugs that continue to thrive in Hong Kong, like heroin, ketamine and cocaine. When gonzo journalist Nick Tosches visited Hong Kong in the late 1990s for his book The Last Opium Den, he found nothing here. “In the end, there is nothing that the night stalkers and gangs of Sham Shui Po cannot get for me,” he wrote. “Perhaps a kilo of pure No. 4 heroin? A ton of pure No. 4 heroin? A truckload of pills? Artillery or explosives? American hundred-dollar bills complete with watermark, safety thread, and intaglio as fine as that of the Bureau of Engraving and Printing? Or perhaps I should like to buy — we’re talking outright ownership here — a few women, children, whatever. No problem. But no one can bring me to an opium den. Why? Because there is no such thing.”

And yet, in another sense, opium is everywhere. It paid for the granite used to pave Pottinger Street; it funded the construction of Government House and other historic monuments; it underpins the wealth of families and companies who continue to play an outsized role in the city’s economic and social life. Hong Kong is no longer a narco state, but beneath its soaring towers and glitzy shopping malls, the city’s foundations remain shrouded in an opium haze.