delanceyplace.com 5/8/08 - tea and opium

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In today's encore excerpt - Chinese tea, the balance of payments, and opium:

"The British East India Company discovered that there was a market for tea in England, and soon it began importing chests of it back home. ... By 1800, textile workers and coal miners were spending 5 percent of their income just on tea (10 percent if sugar is added). ... As tea consumption in England increased, and as the ability of the British to command New World silver shrank, in part because of the American Revolution, mercantilist fears of what the continued outflow of silver to China would mean for British power prompted the British to find substitutes for silver that the Chinese would accept for tea. ... The British colonialists were [finally] able to produce another commodity to finance British tea: the addictive drug opium.

"[Many societies, China included, had long used opium for medicinal purposes, and so there was a small market there.] In 1773, the British governor-general of India established an opium monopoly in Bengal, charged with increasing production of the drug there and pushing its sale in China. Finding some success, even though the Chinese had prohibited opium smoking, the British expanded their market in China by distributing free pipes and selling the drug to new users at very low prices. ... Americans, too, had been bringing opium from Turkey to China, adding yet another source of supply. ... Huge numbers of Chinese became addicted to the drug. ...

"The [Chinese] Emperor appointed Lin Zexu special commissioner, with the power to do whatever it took to end the opium traffic ... [and] Lin dissolved 21,000 chests of opium in irrigation ditches. ... Thus was launched the Opium War of 1839-1842 between Great Britain and China. ... [With the superior weapons of the Industrial Revolution, Britain won and] China ceded territory to the British (Hong Kong) and paid a $21 million indemnity in Mexican silver, to cover the losses of the British drug traffickers. ...

"British trading companies imported about 50,000 chests of opium annually (6.5 million pounds), for sale to Chinese customers ... and great fortunes were built, not just in England, but in the United States as well. ... Profits from the American opium trade added to the endowments of prominent East Coast universities, padded the fortunes of ... the Roosevelt family of New York, and provided capital for Alexander Graham Bell's development of the telephone. ... By the late 1800s, so much opium was entering China or being produced there that 10 percent of China's population, or forty million people, were users with as many as half of those 'heavy smokers.' At the turn of the twentieth century, China was consuming 95 percent of the world's opium supply with predictable social economic and political effects."