In 1803, an East Indiaman trade ship came sailing into the Chinese Canton port. Among its passengers were William Jardine, a surgeon hailing from a poor Scottish family. Jardine had taken up the job as doctor on British trading ships headed for China, serving under the British East India Company (EIC), but soon found himself participating directly in trading various commodities.
In 1817, after years of experience, he left the EIC to join a private enterprise that specialized in one particular commodity - opium poppies. This was an extremely valuable commodity Jardine and his counterparts saw a major potential in China for. There was only one problem: China had banned the drug. This was in context of other trade difficulties in China at the time.
Since the 1600s, China was ruled by the Qing dynasty. The dynasty had a policy echoing that of the Tokugawa Japanese – total lockdown of the country and ban on international trade. In the late 18th century, Western powers were determined to open up the country and eventually managed to persuade the Emperor to allow trade partnerships with the West under the condition that all trade was to be made via Canton (modern day Guangzhou). This became known as the “Canton System”, a method for the Chinese to accurately monitor the trade by tying it through just one location.
It did not take long before Canton was filled with British, Portuguese, French, Dutch and U.S traders, all seeking to reap fortunes off the enormous economic potential of China. China had a total population of around 400 million at the time, and was one of the most exciting growth markets, despite its uncooperative regulatory system. Particularly lucrative was Chinese tea leaves and porcelain. However, the British had a problem: the Chinese wanted to be paid in silver, as opposed to any barter exchange. This could risk draining the Empire of silver.
Meanwhile, the British East India Company discovered a valuable new commodity: opium. Having annexed Calcutta, an opium-rich region, they realized the great commercial value of the drug for both medicine and recreational use. The Portuguese had tried to sell opium into China before via Macao, but the detrimental social effects of the drug were immediately noticed and the Chinese soon banned the buying and selling of opium on Chinese soil.
It was here William Jardine and the other merchants exploited a legal loophole. Instead of docking in Canton, they anchored their opium-loaded tradeships outside the port, and then contracted Chinese smugglers to load the contraband and bring it onshore to distribute it. These Chinese partners were known as the Hong traders. They paid in silver, which was then used by the same British merchants to buy tea, musk, porcelain and other goods to sell in Europe. Needless to say, this was an extremely lucrative business. They effectively converted opium into silver (whitewashing).
William Jardine had deep knowledge of the entire supply chain, having observed it for years as a doctor. In the new private enterprise, he quickly excelled as one of the top traders. In 1824, the chief executive of the enterprise went home to Britain after the company fell into disarray, and handed control over to Jardine and another crafty Scotsman called James Matheson.
Jardine and Matheson now inherited a range of ships and assets. They founded their own business, called Jardine-Matheson Corporation, as a vehicle for their trade. This became an iconic duo. Together, they grew a sophisticated network of opium procurers in India, cunning sailors and a vast pool of Hong traders, or smugglers. It did not take long before Jardine and Matheson became the de facto drug lords – the most successful opium traders in all of China.
Jardine, who now was enormously wealthy, cultivated an aura of authority around him. Very few were allowed to see him, and only a selected few had the privilege of exchanging words with him. He soon became known in China as the great Tai Pan – meaning “Big Shot” or “Chief Executive”. Others nicknamed him The Iron Headed Old Rat.
The opium drug spread at lightning speed across China, and soon had virtually the entire country addicted. Opium dens were opened along the entire coast, and millions were now filling up its rooms, desperate to satisfy their uncontrolled addiction. Even within the government bureaucracy there were opium addicts.
This numbed the entire country and caused catastrophic economic consequences: agricultural productivity collapsed as farmers stayed inside to enjoy their “high”, or sleep. Shops began to close, except the opium dens, of course. The addiction was especially prevalent along the Chinese coastline – the most economically concentrated region.
On top of this, the country was being drained of silver, as the metal flooded out to the Hong traders to pay for the imports. In 1839, the Qing Emperor’s very own son died of overdose. Witnessing this development with deep disgust, China’s High Commissioner, Lin Zexu, decided to act before this epidemic could cripple the entire country.
Chinese Commissioner Lin first sent a desperate plea to Queen Victoria, asking her to explain to why her citizens had returned friendly trade with such cynical malpractice in the hunt for profit. He wrote:
“…How can foreigners return injury for the benefit they have received by sending this poison to harm their benefactors? They may not intend to harm others on purpose, but the fact remains that they are so obsessed with material gain that they have no concern whatever for the harm they can cause to others. Have they no conscience? I have heard that you strictly prohibit opium in your own country, indicating unmistakably that you know how harmful opium is. You do not wish opium to harm your own country, but you choose to bring that harm to other countries such as China. Why?
You do not wish opium to harm your own country, but you choose to bring that harm to other countries such as China. Why?
The products that originate from China are all useful items. They are good for food and other purposes and are easy to sell. Has China produced one item that is harmful to foreign countries? For instance, tea and rhubarb are so important to foreigners' livelihood that they have to consume them every day. Were China to concern herself only with her own advantage without showing any regard for other people's welfare, how could foreigners continue to live?
As months accumulate and years pass by, the poison they have produced increases in its wicked intensity, and its repugnant odour reaches as high as the sky. Heaven is furious with anger, and all the gods are moaning with pain! It is hereby suggested that you destroy and plow under all of these opium plants and grow food crops instead, while issuing an order to punish severely anyone who dares to plant opium poppies again.
A murderer of one person is subject to the death sentence; just imagine how many people opium has killed! This is the rationale behind the new law which says that any foreigner who brings opium to China will be sentenced to death by hanging or beheading. Our purpose is to eliminate this poison once and for all and to the benefit of all mankind.”
However, his letter received no response – sources indicate it was “lost in transit”, and never arrived to the Queen. Thus, Lin Zexu began his war on drugs. "If the traffic in opium were not stopped a few decades from now we shall not only be without soldiers to resist the enemy, but also in want of silver to provide an army,” he had explained.
Lin’s forces arrested thousands of Chinese opium dealers and confiscating and destroying the drug wherever he could find it. He arrested 1700 opium traffickers, confiscated 70 000 opium pipes, boarded opium-laden ships to confiscate the cargo, and ultimately forced merchants to hand in 2.6 million pounds of opium.
Having campaigned across the country, he moved on the port of Canton. Lin’s army besieged the foreign quarter of the port and cut off their water and food supply, demanding that Western traders gave up all their opium stocks. Lin’s men also beat on drums all night to deprive the Westerners of sleep.
"Our purpose is to eliminate this poison once and for all and to the benefit of all mankind.”
In the midst of all this, Lin received cooperation from the British Trade Superintendent, Sir Charles Elliot. Sir Elliot had been governor in numerous countries across the world, but was deeply repulsed by what he witnessed in China. While he disliked Lin’s aggressive approach, he also considered the trade as dishonourable, and feared it could lead to open war with China. Risking his own career and personal safety, Sir Elliot halted incoming British opium ships and confiscated the drug, then handed it over to Commissioner Lin, who immediately destroyed it all.
It did not take long before Elliot had an angry mob of Hong traders at his doorstep, demanding compensation for their incalculable financial loss. To calm them, Elliot promised the smugglers that they, and British merchants, would be compensated by the British government.
In effect, Commissioner Lin and Sir Elliot jointly outlawed all opium trade in China. Lin proceeded to make the trade of opium punishable by death.
It seemed that the drug empire of Jardine and Matheson was at risk of collapse – but the two had spotted a weakness in Elliot’s plan. They knew that Elliot had no authority to compel the British state to compensate the Hong smugglers – and they were right. The British Parliament flatly dismissed Elliot’s request to compensate the Hong smugglers. Defending his actions, Elliot wrote the following to the British Foreign Secretary:
"No man entertains a deeper detestation of the disgrace and sin of this forced traffic on the coast of China. I have steadily discountenanced it by all the lawful means in my power, and at the total sacrifice of my private comfort in the society in which I have lived for some years past.”
With the inability of Elliot to do anything about the matter, the Hong traders now turned to the great Tai Pan – Jardine – for a solution. It was now very clear what Jardine and Matheson needed: they needed a war. The Tai Pan had flirted with the idea of war before, and he had finally found its right moment.
The two drug lords appeared for the British Parliament, with both men entering politics to lobby the government to send armed forces to China and coerce Lin to reverse his actions. It was China that had to compensate the Hong smugglers and British merchants, he argued. After all, it was Lin who had destroyed the commercial merchandise – not the British.
In early Autumn 1839, news of further escalation between Lin and British ships reached London. 60 British ships had been left starved outside Kowloon, leading to a skirmish between the traders and Chinese soldiers. Knowing China better than anyone, Jardine now presented detailed plans and logistical calculations of how the British military could easily crush the Chinese and force them to submission.
By the promise of an easy war, British Foreign Secretary Lord Palmerston gave his vote – in late Autumn of 1839, the British Empire declared war on China.
They sent the trained military of the East India Company and the Imperial Navy to bombard and raid along the Chinese coast. Chinese soldiers were untrained and poorly equipped, using matchlock guns, bows and swords against the British steam-powered war machine. Some Chinese soldiers were said to be weakened by their opium addiction – the very drug they fought against. With the help of Jardine’s intel, the British swiftly defeated the Chinese. By 1841, Qing China was at the mercy of the Empire.
This became known as the First Opium War and resulted in the Treaty of Nanking. It laid out a set of demands, most of which came from the Tai Pan and his colleagues.
Full compensation of any commercial losses by British merchants following Lin’s actions, to be paid in silver. This includes full payment of war reparations for the cost incurred on the British Empire. Both these sums totalled 21 million dollars, to be paid within 3 years and incurred interest upon any delays.
Ending the Canton System and opening four new Chinese ports to international merchants...
Xiamen
Fuzhou
Ningbo
Shanghai…where British merchants could trade with whomever they liked, at pre-determined tariffs.
Ceding an island, at British preference, to the British Crown.
For the last point, Tai Pan Jardine had already picked out the island he wanted. He and Matheson had smuggled opium on the island before and were well familiar with it – it was Hong Kong. And so, Hong Kong became the new seat of the great Tai Pan who now continued to rule his drug empire unopposed.
This was a deeply humiliating treaty. Lin Zexu was held responsible for the disgrace of such a defeat, and was exiled to Xinjiang. Sir Elliot became the first official administrator of Hong Kong, but was removed from his position shortly after, accused of disobedience and excessive leniency. In response to the accusation that he had “cared too much for the Chinese”, he wrote the following to the British Foreign Secretary:
“But I submit that it has been caring more for lasting British honour and substantial British interests, to protect friendly and helpful people, and to return the confidence of the great trading population of the Southern Provinces, with which it is our chief purpose to cultivate more intimate, social and commercial relations.”
The Tai Pan would go on to invest heavily in warehouses and accommodation for employees on Hong Kong, and the population of the tiny island doubled already within a year – however, by then, Jardine had already been struck by cancer. He died in 1843, leaving all his riches behind.
His partner in crime, Matheson, moved home the following year, buying the Isle of Lewis and building his own castle there. Those who lived in the Isle were evicted and moved en-masse to Canada. Matheson later became the Governor of the Bank of England. He left the Jardine-Matheson Corp empire to his nephews to manage.
In the following decades, Chinese opium imports would grow exponentially (from 1,400 tons in 1839 to 6,500 tons in 1880). Consequently, opium addiction became an epidemic in China, causing huge social unrest, infighting, civil wars and economic decline – ultimately leading to the weakening of the Qing government.
The Treaty of Nanking in 1841 marks the beginning of The Century of Humiliation – a dark epoch in Chinese history where the “Celestial Kingdom” was torn apart by foreign, imperialist powers and plagued by ethnic clashes, religious unrest and rebellions, often linked to the opium trade. For instance, there was the Second Opium War in the 1850s, which culminated with the full legalisation of opium in China in 1858. Followingly, there was the Taiping Rebellion, caused partially by a disdain for the opium calamity. The Taiping rebels seized almost 1/3 of China before they were crushed by government forces, supported by British and French troops. Weak and exposed, China was plagued by foreign interventions and civil wars for decades.
It was not until the rise of Mao Zedong that China finally rid itself of opium. Mao shut China from the global economy, put addicts in forced rehabilitation and executed opium dealers, often without trial. After Mao, the Chinese statesman Deng Xiaoping took effective control. Under his leadership, China once again opened its borders for international trade – but now with a determination to never again be the weak party.
In 1997, the last official foreign foothold in China ended, as Hong Kong was ceded back to China. However, the region is still reaping the consequences of what started almost two centuries ago when Jardine, the Tai Pan, came sailing into the port of Canton.
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