THE CHINESE OPIUM WARS:
The Queen of England Pushes Dope

``In view of the inordinate lengths to which the corruption of morals have advanced, I almost think it necessary that Chinese missionaries should be sent us to teach the aim and practice of natural theology.''

--Gottfried Leibniz

At midnight on July 1, 1997, Hongkong, the British Crown Colony, will be restored to China. This is not only an event which will be celebrated by patriotic Chinese; any patriotic American should celebrate it as well. The British seizure of Hongkong was an aspect of one of the most ugly crimes of the British Empire: the takeover and destruction of India, and the use of India to flood China with opium. The British twice sent the Royal Navy to enforce opium addiction on China, in order to open up China for looting.

In spite of this crime, the British and their allies in the United States, are trying to use the return of Hongkong to create a scandal around alleged ``human rights violations'' by the Chinese, as a pretext to disrupt relations between China and the United States. This is especially dangerous because the battle to create a new economic system, to replace the collapsing one, is centered around U.S. cooperation with China. The issue at stake is not that of ``communism versus free trade.'' The war is between the British System and the American System.

It was common knowledge before 1921, that the British Empire was the world's leading drug trafficker in the 19th century. Even Ted Koppel, in a recent ``Nightline'' special report on Hongkong, was forced to admit this.

Lyndon LaRouche's associates published Dope, Inc., which documents how this British control has continued to this day. Treason in America, by Anton Chaitkin, documents how opium trafficking played a central role in building up the ``treason'' faction in America. However, this subject has been declared ``off-limits,'' by the defamation of LaRouche, as exemplified by the slander, ``LaRouche claims that the Queen of England runs drugs.''

The destructive nature of opium was well known at the time of the Opium Wars. Opium is highly addictive, and induces passivity into the smoker. Addicts seldom lived past age fifty; heavy smokers had a life expectancy of only five years.

The drug was widely used in Britain itself, even by the Royal Family, as shown by revelations that Queen Victoria's court frequently ordered opium from the royal apothecary at Balmoral. In England, where opium was legal, the cause of the exceptionally high infant mortality rate in one Lancashire town was discovered to be a concoction, called ``Godfrey's Cordial,'' a cough syrup containing opium which was given to babies, often in lethal doses.

While a prosperous Chinese official could afford opium addiction, a Chinese worker would spend two-thirds of his wages, neglecting his family. Many Chinese saw opium as a poison introduced by foreign enemies. In 1729, the Emperor banned the import of opium, except for a small amount, licensed as medicine. In 1799 a stronger Imperial decree was issued prohibiting both the smoking of opium and its importation. This decree stated:

``Foreigners obviously derive the most solid profits and advantages ... but that our countrymen should pursue this destructive and ensnaring vice ... is indeed odious and deplorable.''

Confucianism strongly condemned the use of drugs like opium. Gottfried Leibniz (1646-1716), the great German mathematician, physicist and philosopher, who wrote extensively on China, recognized that Confucianism contained many of the most positive features of Christianity. Leibniz worked for an ecumenical alliance between Confucianism and Christianity. In Confucianism, a man had a duty and debt to his ancestors. His body was given to him by his ancestors as their link to his descendants. Therefore, for a man to destroy his own body was a great offense against filial piety.

The British were well aware of the destructive nature of opium, but argued that opium sales were necessary because it was the only item which they could sell to the Chinese. Payment for tea, which the British imported, had created a drain of silver from England to China.

Far More Evil than Mere Greed

The Governor-General of the East India Company stated in 1817,

``Were it possible to prevent the use of the drug altogether, except for medicine, we would gladly do it, in compassion for mankind.''

To understand British actions in the Opium Wars, it is necessary to step back, and to place them in the context of modern history. The establishment of the nation-state, with the creation of France under Louis XI, as a project of the Golden Renaissance, allowed mankind to rise above a condition where 95% of the population lived little better than cattle. However, a financial oligarchy, centered in Venice, was bitterly committed to preserving feudalism. This Venetian oligarchy survived, and succeeded in capturing the Netherlands and England as the base for their operations.

The British East India Company (the ``Company'') was one of the institutions created as a product of the Venetian takeover of England. The Levant Company, set up to trade with the East, had been formed in 1592 as a fusion of the Turkey Company and the Venice Company. In 1600, the East India Company was formed as a spin-off of the Levant Company. It received a perpetual charter from the British Monarchy for a monopoly on trade with the East Indies.

In 1740, the Company's role in India was limited to trade through its centers at Bombay, Calcutta and Madras. By 1815, it had an army of 150,000 men, and governed most of India, either directly or indirectly. The Company utilized the vast superiority of European weapons to take over India in stages, through a series of wars. Its takeover was assisted by the collapse of power of the Indian Moghul Emperors, which left India broken up into sections, controlled by local rulers. By 1800, the main source of revenue, from Company operations in India, was land taxes, imposed on conquered lands.

Bengal was the first major area conquered by the Company. Its army defeated the native ruler in 1757, and proclaimed itself the official ruler of Bengal in 1765. It imposed incredibly harsh taxes. The province deteriorated rapidly. In 1770, the failure of monsoon rains, led to a famine in which an estimated one-third of the population perished.

Bengal then became the center of the East India Company's opium monopoly.

The East India Company's domination of the Indian economy was based on its private army. However, giving the lie to the radical ``privatizers,'' the ultimate muscle behind the company was the British military, as Lord Palmerston demonstrated by deploying it in the Opium Wars, to back up the British demand for ``free trade.''

In the aftermath of the disastrous Bengal famine, the British Crown took control over the East India Company's operations, and, under the India Act of William Pitt the Younger, in 1785, the Governor-General of India was made a Crown appointment. A six-member ``Board of Control'' was established in London to ``superintend, direct and control'' the Company's possessions. On the Board were the British Chancellor of the Exchequer, and a Secretary of State, both ministers of the British Crown. From this period, the ``free-trade'' East India Company was, effectively, a semi-official branch of the British government, until it was finally formally dissolved in 1858.

The Company lost control of India with the Indian Revolt of 1857-58, when British troops poured in to crush the uprising. The British government, under Lord Palmerston, took direct control of India. Queen Victoria, who noted that most Englishmen felt ``that India should belong to me,'' was made Empress of India in 1877.

Adam Smith and Karl Marx:
Apologists for the Empire's "Globalization"

The 19th Century was dominated by a battle between the supporters of the American System, on one side, and the British Empire, on the other. During the middle of the century, the circles around American economist, Henry Carey, fought for a series of projects to develop Asia, centered around railroads, as is described in the recent EIR cover-story, ``The 'land-bridge': Henry Carey's global development program.''

Had the Carey circles grand design not been sabotaged by the British Empire, all of Asia would have developed as dramatically as Japan, which escaped the control of the British, and formed an alliance with the Carey circles during the Meiji Restoration.

The science of economics, as embodied in the American System, was founded by Leibniz. The modern embodiment of this science, is found in the works of Lyndon LaRouche such as, So You Wish to Learn All About Economics: Successful human survival is guaranteed only when society organizes successive creative breakthroughs in science and technology, which are then applied economically, to increasing man's power over nature, resulting in increases in the relative potential population density.

A successful society is characterized by a rising living standard for its population, increasing investment in factories and basic infrastructure, and the generation of additional surplus, which is invested in generating new discoveries in science and technology.

The British system denied any role for human creativity, and instead argued, that if man merely followed his hedonistic desires, pursuing pleasure and avoiding pain, objective laws would naturally guide society to achieve the best allocation of wealth. Bernard de Mandeville stated explicitly in his Fable of the Bees, that men, in following their hedonistic desires, even in pursuit of evil ends, would ensure the best result for society.

Adam Smith, in his Wealth of Nations, followed this belief, that human behavior was best ordered by each man following his hedonistic desires to their lawful conclusion. He argued that opium was a legitimate product, the same as any other commodity, that the objective laws of the ``invisible hand'' must be allowed to determine all economic activity, and anything which stood in the way, such as national governments, were an obstacle which must be removed.

Smith, a propagandist for British colonialism, argued that human progress was advanced with the spread of this ``free market'' globally, through the expansion of the British Empire.

A similar defense of British colonialism was also advanced by Karl Marx. Marx has an undeserved reputation as an opponent of British imperialism, because his writings were designed to appeal to, and manipulate people, based on their grievances. Marx emigrated from Germany to England at age 30, where he became a dupe of British Prime Minister Lord Palmerston.

Palmerston dominated the British government from 1830 to 1865, and, was the central figure in efforts to make the British Empire into a new Roman Empire. He directed British strategy in the Opium Wars. He also kept a stable of radicals and terrorists for purposes of destabilizing other nations. (Eleven countries have recently denounced the British government for harboring terrorists, demonstrating that the British have continued this practice to this day.)

In Marx's early writings, he adopted Aristotle's definition of man as ``a political animal,'' even using the ancient Greek term, used by Aristotle. Consequently, he rejected the conception that man advances society through creative discovery, and instead argued that society advanced according to mechanistic laws through a natural progression, from ancient society, to feudalism, to capitalism, to socialism, to communism. Marx called Adam Smith's Wealth of Nations, ``an immense step forward'' because it reduced the value of all economic activity to the value placed on it, by the universal free market.

Marx attacked Carey's program for national economic development as a regression from Adam Smith. He rejected Henry Carey's attack on ``the diabolical influence of England on the world-market,'' by claiming that it was simply, ``the natural laws of capitalist production,'' and attacked Carey's plans for an alliance with Russia to defeat the British Empire by labeling him a ``Russophile.''

Karl Marx Defends British Opium War

Marx's role as an apologist for the British Empire's ``globalization'' is explicit in his defense of the British Empire's rape of India. Marx advanced a Mandevillian argument, that, because ``capitalism'' is superior to ``oriental despotism'', even though the intent and actions of British colonialism were evil, British colonialism benefitted India!

Even more explicit is Marx's defense of Britain's first Opium War. Amidst much bravado about the potential for world revolution, Marx praised the Opium War for throwing China into chaos. He claimed that Britain was advancing civilization in China, by destroying China's old culture, and opening up China to the international economy. He even reported, approvingly, that British policies were causing such unemployment in China, that displaced Chinese workers were being used as slave labor throughout the world. Karl Marx wrote in a July 22, 1853 article in the New York Daily Tribune:

``Whatever be the social causes, and whatever religious, dynastic, or national shape they may assume, that have brought about the chronic rebellions subsisting in China for about ten years past, and now gathered together in one formidable revolution, the occasion of this outbreak has unquestionably been afforded by the English cannon forcing upon China that soporific drug called opium. Before the British arms the authority of the Manchu dynasty fell to pieces; the superstitious faith in the Eternity of the Celestial Empire broke down; the barbarous and hermetic isolation from the civilized world was infringed; and an opening was made for that intercourse which has since proceeded so rapidly under the golden attractions of California and Australia. At the same time the silver coin of the Empire, its life-blood, began to be drained away to the British East Indies.''

``It would seem as though history had first to make this whole people drunk before it could rouse them out of their hereditary stupidity.''

``The Chinese, it is true, are no more likely to renounce the use of opium than are the Germans to forswear tobacco.''

Henry Carey Refutes the British System

The devastating flaw in Adam Smith, Karl Marx, and all who claimed the British Empire was advancing more backward civilizations, was identified by Henry Carey: The British System is not capitalism. Rather, the British Empire, and its effects, can be best described by comparing them, to the oligarchy of the ancient Roman Empire, and the destruction which they wrought on the world. Carey presented a devastating expose of the British Empire in his 1853 book, The Slave Trade, Domestic & Foreign, Why it Exists & and How it May be Extinguished. He demonstrated that the British system violated the requirements for successful human survival, and, that opium production was a lawful result of the destructive nature of the British System.

Carey described how the Roman system was based on centralizing the power of governing and taxing. He showed how this led, lawfully, to exhaustion and collapse, resulting in a severe drop in population:

``Still onward the city grows, absorbing the wealth of the world, and with it grow the poverty, slavery, and rapacity of the people, the exhaustion of provinces, and the avarice and tyranny of rulers and magistrates, until at length the empire, rotten at the heart, becomes the prey of barbarians, and all become slaves alike,--thus furnishing proof conclusive that the community which desires to command respect for its own rights must practice respect for those of others; which lies at the base of all Christianity--'Do unto others as ye would that they should do unto you.'|''

``England, on the contrary, has sought to restrict her subjects and the people of the world in their modes of employment; and this she has done with a view to compel them to make all their exchanges in her single market, leaving to her to fix the prices of all she bought and all she sold, thus taxing them at her discretion in both time and money.''

Benjamin Franklin had attacked this British policy 100 years earlier, and, correctly argued that the development of American manufactures, would improve the productivity of the British dominions, as a whole, and enrich both the Colonies and England. However, the Venetian oligarchy, firmly in control of England, was not interested in enriching nations, but rather, in consolidating and spreading their oligarchical system. So, Franklin recognized that a break with Venetian-controlled England was necessary.

Carey demonstrated, in graphic detail, that the British Empire's system of ``globalization'' had devastating effects on India. Prior to the takeover of India by the East India Company, the Indian economy was characterized by the existence of native manufacture of cloth and other goods, which made possible a division of labor, and a higher level of productivity for the economy as a whole. The British demanded one-half of the gross product of the land, as tribute from the areas that they controlled, and imposed a tax collection system which severely disrupted the economy.

Even more deadly, the British imposed a policy of technological apartheid, banning the export of machinery, from England to India, and refusing to develop India's rich iron and coal deposits. Taxes were imposed to deliberately suppress native manufacturing.

Carey stated:

``The Hindoo, like the negro, is shut out from the workshop. If he attempts to convert his cotton into yarn, his spindle is taxed in nearly all of the profit it can yield him. If he attempts to make cloth, his loom is subjected to a heavy tax, from which that of his wealthy English competitor is exempt. His iron ore and his coal must remain in the ground, and if he dares to apply his labour even to the collection of the salt which crystallizes before his door, he is punished by fine and imprisonment.''

The introduction of steam driven machinery, was used by the British to devastate India's native cloth manufacturers, rather than to revolutionize Indian production. Although the steam engine had been developed by Benjamin Franklin's collaborators, who intended that it be used to improve the productivity of labor, the British applied it to their slave labor system, filling the factories with workers, including children, who worked 15 to 17 hours a day.

Free Trade Destroys Indian Cloth Manufacturing

Carey describes how in 1813, British ``free trade'' removed tariffs on cloth imported into India, ``but with the restriction on the export of machinery and artisans maintained in full force.'' Within twenty years, Indian cloth manufacturing was completely wiped out. The result was not merely mass unemployment and starvation of cloth manufacturers, but the impoverishment of cotton cultivators, since cotton now had to be shipped all the way to England, and the British now had a monopoly control of cotton consumption.

Henry Carey demonstrated that this British looting had the effect of reducing the ability of India to support its population.

Carey also understood that the destructive nature of the British system contained an inherent tendency toward bankruptcy, requiring it to constantly find new sources of loot. The conquest of Bengal led to an initial surge in tax revenues. However, by 1815, the Company was 40 million pounds sterling in debt. The Company's 150,000-strong army was consuming three-quarters of its annual budget. The looting of India had so severely damaged the Indian economy that taxes and revenues were declining. The Company's major source of revenue was its China trade: tea paid for by opium.

As Carey stated:

``Calcutta grows, the city of palaces, but poverty and wretchedness grow as the people of India find themselves more and more compelled to resort to that city to make their exchanges.... Now, every man must send his cotton to Calcutta, thence to go to England with the rice and the indigo of his neighbours, before he and they can exchange food for cloth or cotton--and the larger the quantity they send the greater is the tendency to decline in price. With every extension of the system there is increasing inability to pay the taxes, and increasing necessity for seeking new markets in which to sell cloth and collect what are called rents--and the more wide the extension of the system the greater is the difficulty of collecting revenue sufficient for keeping the machine of government in motion. This difficulty it was that drove the representatives of British power and civilization into become traders in that pernicious drug, opium.''

The British East India Company's Opium Monopoly

The East India Company established a monopoly over the production of opium, shortly after taking over Bengal. Before each growing season, Company officers went through the villages contracting with the peasants on how much acreage to plant, and making loans to cover costs. Indian peasants sold the opium juice to the Company, whence it was taken to the factory. The opium juice was processed into a form suitable for smoking, and formed into three pound cakes, which were then wrapped in poppy pedals. Forty of these cakes were loaded into chests, each stamped with the symbol of the East India Company.

In a completely transparent fraud of ``free trade,'' the Company then auctioned off these chests to ``country traders,'' (whom it pretended were independent), at roughly four times the cost of production. These traders were licensed by the Company, and in some cases financed by it. The Company would even give the ``country traders'' opium on consignment, and collect payment in Canton (Guangzhou) after the opium had been sold.

The great nation of China, which had cities of 1 million inhabitants, while the largest European city had only a population of 100,000, represented an enticing target. China's population of 300 million was some 20 times that of England. The British Navy had complete superiority over the antiquated Chinese navy. However, occupying and garrisoning China was impossible.

What the British Will Never Forget

Were you to read the British press today, you would learn that the British Empire never forgets its defeats. Along with the defeat by Sudan of General Charles ``Chinese'' Gordon, killed in Khartoum in 1885, one of the nastiest setbacks ever suffered by the British, was the dismissal of their envoy, Lord Macartney by the Chinese Emperor in 1794. Hoping to ``beat'' the Russians and others to the China market, the British sent Macartney, with a large entourage, and ships full of trinkets, to attempt to entice the Emperor into opening China to British trade. But the Emperor decided, rightly, that the British had nothing to offer him, nor China, and, after ordering Macartney to ``tremblingly obey,'' sent him packing.

The British would follow the earlier example of the Dutch, who pacified Indonesia with opium: the Dutch East India Company began shipping opium to Java in 1659, and by the middle of the next century, 100 tons were arriving every year, in the city of Batavia, alone. The opium addicts and the corrupt officials who collected bribes to allow smuggling, effectively became allies with the British in subverting China. Opium had a devastating effect on the Chinese military, and on the Chinese intelligensia.

Although the Chinese had used opium as a medicine, there was no widespread addiction before the British arrived. The Portuguese had smuggled some opium to China. The first major shipment of opium, was arranged in 1781, by the Company's Governor-General, Warren Hastings, who described opium as a ``pernicious'' commodity, ``which the wisdom of the Government should carefully restrain from internal consumption.'' It was a financial disaster. The opium was brought to Canton, the only city where the Chinese allowed foreigners to trade. The Chinese showed little interest, so the ship left without selling its opium. The Company lost a quarter-of-a-million dollars.

However, steady British smuggling paid off. By 1804, the revenues from opium sales to China, were sufficient to cover the cost of tea, imported from China. Between 1804 and 1806, $7 million were transferred out of China.

Until 1820, the Company practiced a policy of limiting opium shipments to less than 5,000 chests, sufficient to gain substantial loot, but calculated so as not to provoke a response from the Chinese.

However, the bankruptcy of the East India Company, and a strategy of more intensive looting of India, required a new, more destructive policy for China as well. In 1817, the British launched their ``free trade'' offensive against India, flooding it with English cloth, while blocking the development of Indian cloth manufacture. The British required increased sales of opium to pay for the shipments of cloth into India. The Company shifted to a policy of maximizing opium smuggling (and addiction, as well).

The Company even defended its policy, claiming that it was necessary to stop competition from other opium smugglers, declaring in 1819, that its policy was ``to endeavour to secure the command of the Market by furnishing a Supply on so enlarged a scale and on such reasonable terms as shall prevent competition.''

The Chinese made a limited effort to stop opium smuggling in 1821. The British responded by moving the base of their opium-smuggling operations out of Canton, to the small island of Lintin inside Canton Bay, where the Chinese navy could not threaten it. The smugglers' ships each carried about ten cannon, and were more powerful than any fleet which the Chinese Emperor could deploy against them. The trading companies anchored old ships off Lintin Island, which stored the opium until small ships smuggled it ashore. The opium trade increased from 4,244 chests in the 1820-21 season to 18,956 by 1830-31. By 1831, the opium trade into China was two-and-a-half times greater than the tea trade. It was probably the largest trade in a single commodity anywhere in the world.

William Jardine: "Iron-Headed Old Rat"

The largest of the ``country traders'' was Jardine, Matheson & Co. William Jardine and James Matheson formed a partnership in 1828. Matheson was the first to see the potential of smuggling along the entire Chinese coast. Matheson blamed the Chinese dislike for ``free trade'' to their ``marvellous degree of imbecility and avarice, conceit and obstinacy.'' Jardine was nicknamed ``Iron-Headed Old Rat'' by the Chinese. He advocated making Formosa an offshore base for the Western powers. He was also one of the most vocal advocates for war, stating:

``Obtain us but a sale for our goods, and we will supply any quantity.... Nor indeed should our valuable commerce and revenue both in India and Great Britain be permitted to remain subject to a caprice which a few gunboats laid alongside this city would overrule by the discharge of a few mortars.... The results of a war with China could not be doubted.''

Both returned to England, and became members of Parliament. Matheson used his opium fortune to become the second largest landholder in Great Britain, and was made a Baron by Queen Victoria.

One obstacle to war, was Sir George Robinson, the British Superintendent of Trade in Canton. He applied to England for orders, which would authorize him to stop British opium smuggling, which, of course, he never received. He suggested, in February 1836, that ``a more certain method would be to prohibit the growth of the poppy and manufacture of opium in British India.'' He was fired by Palmerston, then British Foreign Secretary, for this.

Robinson's replacement was Captain Charles Elliot of the Royal Navy, who had been spying all along on Robinson for Palmerston. Elliot had previously been involved in designing the plan for ``freeing'' the slaves throughout the British Empire, which Henry Carey exposed, as being carried out in such a way, as to have what he termed ``disastrous consequences.'' In Jamaica, following an ``emancipation'' of the slaves, the effect was to drive down wages and living standards for both the former slaves, and imported Indian laborers.

By the late 1830's, there was no doubt that opium was leading to the destruction of China. By 1836, opium shipments were more than 30,000 chests, enough to supply 12.5 million smokers. The Chinese imperial army lost a battle against local rebels because the army was addicted to opium. The financial drain on China was disrupting the entire economy. From 1829 to 1840, Chinese exports had brought in 7 million silver dollars, but imports, mainly opium had drained 56 million. The loss of silver was disrupting the internal economy leading to increased unrest.

Lin Zexu, appointed by the Emperor to stop the opium traffic, stated:.

``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.''

Lin Zexu was appointed by the Chinese Emperor, High Commissioner to investigate port affairs, on December 31, 1839. He deployed sufficient military force to drive the opium traffickers from Lintin Island. They redeployed to a barren island further out, named Hongkong. Lin Zexu also demanded that the British smugglers hand over their stockpiles of opium, and sign a bond pledging not to smuggle more opium under penalty of death.

Lin sent a letter to Queen Victoria appealing to her to stop the opium traffic. He told Queen Victoria:

``this poisonous article is manufactured by certain devilish persons in places subject to your rule.... What is here forbidden to consume, your dependencies must be forbidden to manufacture.''

The behavior Captain Charles Elliot was accurately described by James Matheson:

``To a close observer, it would seem as if the whole of Elliot's career were expressly designed to lead on the Chinese to commit themselves, and produce a collision... I suppose war with China will be the next step.''

Creating a Pretext for War

Elliot sought to establish a pretext for war other than the defense of opium, arguing that the issue was the Chinese demand that British merchants be subject to ``barbaric'' Chinese law. He instructed British merchants to hand over their, in fact, unsalable opium stockpiles, with the promise that the British government would reimburse them for their loss. In perhaps the biggest drug-bust in history, Lin destroyed 20,283 chests, or 2.5 million pounds seized from British smugglers.

Elliot then deployed the British forces at hand to create a series of incidents with the Chinese, which could be used to rally support back in England for the planned war.

While Matheson continued the company's smuggling operations from the new base at Hongkong, Jardine was sent to London, as the representative of all the opium smugglers, to rally support for war. The propaganda he spread in London, was that honest British merchants were being besieged, imprisoned, deprived of food, and actually threatened with death. He rallied British cotton merchants that war was necessary to ``open China'' to imports of British cloth.

Matheson met with Palmerston to plan strategy and supply information, obtained through his smuggling operations, on Chinese geography, which was crucial for British military operations.

The British sent a fleet of 16 men-of-war, four armed steam ships, and transport ships carrying 4,000 Scottish, Irish and Indian troops, which arrived in June of 1840. The Chinese were totally unprepared. The Imperial army was really only a police force, designed to put down internal revolts. Although the Chinese had invented gunpowder, their artillery was little more effective than fireworks. Their guns were mounted solidly in their forts or ships and could not be aimed. Although they desperately tried to innovate, during the wars which followed, the Chinese lacked the science, or the industrial base necessary to match a British military, well-schooled in slaughtering defenseless populations.

The British carried out a series of attacks on Chinese cities using the fleet to destroy obsolete Chinese fortifications, and then threaten the cities with destruction unless they paid ransom. The British moved cannon to the edge of Canton, and forced the city to pay a ransom of $6 million. Shanghai paid $300,000, ransom but was still severely looted.

Typical was the capture of the Island of Chou-shan and its capital, Tin-hai. The British used broadsides from the fleet to demolish the fleet of 11 war junks and an obsolete shore battery. The Chinese militia of 1,600 fled the bombardment. British troops were landed unopposed on the beach, which was scattered with dead bodies, bows and arrows, spears, and obsolete matchlock rifles. The Madras Artillery mounted four cannon on a hill, and began shelling the defenseless town, forcing the residents to flee. Soon, the soldiers discovered that the town was stocked with rice wine. Drunken soldiers and sailors pillaged the burning town until there was nothing left to steal or destroy.

The British sent a fleet up the Yangtze River to cut the Grand Canal and attack Nanking. All of Beijing's food supply was brought by boat up the Grand Canal. The force, now numbering around 12,000, sailed up the river, attacking cities along the way, or forcing them to buy immunity. When the British force arrived in Nanking, the Chinese Emperor sued for peace.

By this time, Captain Elliot had been replaced by Sir Henry Pottinger. Elliot had been denounced for being too soft on the Chinese, because he had been willing to settle the war for only $6 million as compensation for the destroyed opium, and possession of Hongkong. His liberal reputation still intact, he was sent to his next assignment, as the British representative to the newly independent Republic of Texas.

Lord Palmerston had given Sir Henry Pottinger precise written instructions about opium. He was ``strongly to impress upon the Chinese plenipotentiaries ... how much it would be to the interest of that Government to legalize the trade.''

The Chinese refused to even discuss the legalization of opium. The Emperor responded: ``Gain-seeking and corrupt men will for profit and sensuality defeat my wishes, but nothing will induce me to derive a revenue from the vice and misery of my people.''

In the Treaty of Nanking, signed on August 29, 1842, China agreed to pay an indemnity of $21 million and cede Hongkong to Britain. The ports of Canton, Shanghai, Ningpo, Amoy and Fuzhou were declared open for trade, and Chinese tariffs were limited to 5%. Foreigners in these ``treaty ports'' were not subject to Chinese laws. Finally, British warships could anchor in the ``treaty ports'' and could enter any Chinese port ``when the interests of trade demanded.'' The Chinese were quickly forced to sign similar treaties with France and the United States.

In the period following the first Opium War, Hongkong was avoided by tea or silk traders, and instead served as a center for opium smuggling, gambling, prostitution and piracy. The Governor of Hongkong reported that ``almost every person possessed of capital who is not connected with government employ is employed in the opium trade.''

Hongshang: Central Bank for the Opium Trade

The Hongkong economy has continued to be dominated by opium money, as it developed into a model for the success of British ``free enterprise'' methods. The Hongkong and Shanghai Bank (``Hongshang''), the closest thing to a Central Bank that exists in the ``free enterprise'' Hongkong economy, was founded with opium money.

The first Opium War was followed by a second in 1856-60. The British were joined by the French as junior partners, the French having appointed themselves the ``protectors'' of China's Catholics. The combined British and French forces looted and destroyed the Emperor's Summer Palace.

In the treaty ending the second Opium War, the Chinese were forced to accept the legalization of opium. With Chinese resistance broken, large scale opium production in China was begun, supposedly to stop the drain on silver caused by opium imports. Both imports and domestic production soared, with imports reaching 105,508 chests by 1880. It is conservatively estimated, that China's opium-addicts numbered between 30 and 40 million, at that time.

Parallel to this, the British gained a stranglehold on the Chinese economy and government finances. In 1853, the British were able to grab control of Chinese Customs in Shanghai, because of the Taiping revolt. Twenty years later, all Chinese customs were managed by the British, with all Customs Houses of China within reach of British shells. For 40 years after 1860, Britain dominated China's commerce. By 1895, China's trade with Britain's represented two-thirds of all China trade, which then totalled 53.2 million pounds sterling.

Opium remained at the head of the list, averaging 10 million pounds sterling a year during the 1880's. By 1900, a great part of government revenues went to pay indemnities, imposed on China by various ``peace'' treaties.

Opium went hand-in-hand with foreign conquest and revolution. China was rapidly broken apart by the centrifugal forces introduced by the effects of British looting. From 1850 to 1860, China was racked by revolts by the Taiping and Triad gangs. Deaths from the chaos are estimated to have been several tens of millions. Many provinces lost more than half their population. By 1916, China was so shattered, that when nationalists around Sun Yat-sen attempted to set up a Republic, the greatest problem was to unite the country. China had been broken apart by competing war lords, a condition similar to India just prior to the British conquest.

Throughout the early 20th century, Japan, which was the British Empire's key ally in Asia, launched repeated attacks on China. The Japanese used British methods, including the bombing of civilians in Shanghai in 1932, and the use of dope. The Japanese ran huge amounts of drugs, including heroin, into occupied Manchuria, and by 1944, opium addicts there were estimated around 13 million, or one-third of the population.

This was the heritage of Hongkong.

With the British lease on the ``New Territories'' part of the Colony running out, in the early 1980s, Chinese leader Deng Xiaoping demanded the return of the entire colony, including Hongkong island, which had been ceeded ``in perpetuity,'' on the basis of China's national sovereignty. The British had little to stand on, and were forced to come to an agreement.

Afterword

In the intervening years, the policy of the Chinese government has been to integrate Hongkong--one of the two largest container ports in the world--into the Chinese economy. The new Beijing-Kowloon railroad has just been opened, linking Hongkong with central and north China, and enabling Hongkong's port to play an urgently needed role in opening and developing the Chinese economy.

In May 1996, Helga Zepp-LaRouche presented LaRouche's concept of using the Eurasian Land-Bridge as the basis for global economic reconstruction to a government-sponsored Symposium on the Land-Bridge in Beijing.

It is through this economic reconstruction, that the drug-running, looting policies of the British empire, will finally be defeated.

To order books mentioned in this report, please contact Benjamin Frankin Booksellers at (800) 453-4108.

Captions:

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Adam Smith argued that opium was a legitimate product, the same as any other commodity, that the objective laws of the ``invisible hand'' must be allowed to determine all economic activity.

Karl Marx praised the Opium War for throwing China into chaos. He claimed that Britain was advancing civilization in China, by destroying China's old culture, and opening it up to the international economy: ``It would seem as though history had first to make this whole people drunk before it could rouse them out of their hereditary stupidity,'' he said about China.

[hongkong]
EIRNS
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The Hongkong economy has continued to be dominated by opium money, as it developed into a model for the success of British ``free enterprise'' methods. The Hongkong and Shanghai Bank (``Hongshang''), the closest thing to a Central Bank that exists in the ``free enterprise'' Hongkong economy, was founded with opium money. Here, Hongshang Bank seen from the harbor.
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A Chinese Opium Smoker. It is conservatively estimated, that by 1880, China's opium-addicts numbered between 30 and 40 million.


[drawing of Lin from book]
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Lin Zexu, Commissioner of Canton, led a ruthless campaign in 1838 to wipe out opium consumption, which, the British complained bitterly, was having an affect. Thousands of Chinese opium merchants were arrested. ``We have never seen so serious a persecution, or one so general,'' lamented William Jardine. Lin's seizure of 2.5 million pouds of raw opium was, undoubtedly, the biggest drug bust ever.''

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This drawing shows Lin directing the burning of the opium.