We Sell Drugs: The Alchemy of US Empire

by Suzanna Reiss

  STOCKPILING AND REMOBILIZING FOR DEFENSE

  The establishment, control, and policing of national stockpiles of drug commodities became manifestations of the powerful stance of the United States in relation to the rest of the world. So too were the new prisons, hospitals, and warehouses that increasingly stored the nation’s capital. The stockpiling of commodities, along with the immense value of the “energy, industrial or human,” stored within them, reflected economic and political transformations that far exceeded the immediate postwar concern of handling military surpluses. The FBN’s troubled efforts to assert monopoly control over military surplus narcotic drugs occurred amid a profound shift in US national security policy that placed an unprecedented peacetime urgency around preparations for war. Initially inspired by lessons learned during World War II on the strategic importance of controlling the supply and flow of strategic commodities, particularly raw materials deemed essential to waging war, in the five years following the cessation of hostilities these principles guided government defense policy as it sought to remobilize the nation for war against the Soviet Union.16

  The Cold War merely accelerated what had already become central to US policy: building a US-centered international economic and regulatory order to sustain and extend the unrivaled geopolitical and economic position in which the United States found itself at war’s end. As Thomas McCormick said, “By 1945, it had become axiomatic to American leaders that two prerequisites were necessary for the world system to function in an economically efficient and political stable way. First, there had to be a constantly expanding world economic pie. Second, there had to be a hegemonic power capable of enforcing rules of behavior necessary to ensure that expansion, and punishing or isolating those who refused to accede to those rules.”17 A key mechanism for securing this outcome was through US dominance over international market flows. Examining the principles and logic behind the consolidation of this economic vision provides a revealing perspective on the emerging ideological and material foundations of US capital’s growing global power and the policing that sustained it. The US public and private capacity to acquire, stockpile, and control the circulation of commodities, especially drug commodities, was quite consciously seen as a way to lessen dependence on market fluctuations and the trade proclivities of foreign powers, as a tool for replacing European and Japanese colonial influence in the Third World, and as a mechanism for countering the real or imagined influence of communism around the globe.

  In 1944 both military and civilian officials tackled the question of what to do with material surpluses at war’s end. The US Military Academy lamented that the period between the First and Second World Wars had only “witnessed the birth and feeble infancy of a national policy with respect to raw materials.” Problems encountered in the acquisition of material resources during the latter war inspired a recommendation to make stockpiling central to long-term strategic planning. By October 1944, Congress, intent that stockpiling become a permanent feature of national defense policy, passed the Surplus Property Act “to aid the reconversion from a war to a peace economy” by ordering the placement of surplus strategic and critical materials in a government stockpile to be available for national defense or emergency.18 This vision was furthered after the war when officials reformulated the government’s 1939 Strategic Materials Act with the passage of the 1946 Strategic and Critical Materials Stock Piling Act that characterized defense stockpiling as a necessary component of peacetime policy. The following year, the same month the FBN scrambled to contain the fallout from the “illicit” circulation of military surplus drugs, President Harry Truman readied the nation for a new type of war. On July 26, 1947, the president signed the National Security Act that reorganized the institutional foundations of national defense by creating the National Security Resources Board to coordinate economic mobilization, along with the Department of Defense, the National Security Council, and the Central Intelligence Agency. These institutional transformations reflected a shift toward a more aggressive foreign policy, propelled by the president’s call in March of that year for the global containment of communism (a policy that later came to be known as the Truman Doctrine).

  The need for such institutional changes seemed apparent in 1950 when President Truman declared a national emergency in response to Chinese Communist intervention in the conflict on the Korean peninsula. Immediately, as had happened at the outbreak of World War II, the government rapidly sought out the collaboration of the pharmaceutical industry. Just ten days into the state of emergency, Drug Trade News reported, “Key U.S. Agencies move to speed up mobilization plans for the drug industry.” Federal and state governments responded to the state of emergency in part by allocating increased funds for the stockpiling of drugs. According to the national Civil Defense director, the government “would spend $400,000,000 for stockpiling critically needed civil defense supplies during the next three years.”19 With the first “hot” war of the Cold War underway, more than a year after the Soviets had demonstrated their capacity to build and detonate a nuclear bomb, medicines stockpiles along with bomb shelters and duck-and-cover drills seemed necessary preparation for a potential attack on the American civilian population.

  The Cold War helped solidify the policy link between drugs and national security that had been evident for more than a decade since the government began accumulating stockpiles in the 1930s. When federal gold reserves were transferred from the Treasury Department’s vaults in Washington to Fort Knox, the vaults were subsequently filled with government-surplus narcotics.20 This transfer came about after Congress had devalued the dollar in 1934, providing at least a symbolic counterpoint to the steadily increasing value of drug commodities in economic, political, legal, social, and cultural life.21 In truth, the government moved the gold reserves in an effort to better protect them from a possible enemy invasion.22 But Anslinger himself emphasized that drug stockpiling had “even more value,” or at least the equivalent importance of safeguarding gold. “We could not store it anywhere else, unless it would be in a Fort Knox gold vault,” he informed the press, “because a narcotic addict will go to almost any length to obtain opium and a person who could steal even a small part of the supply would have a small fortune.” Beyond its dramatic symbolism, the replacement of gold by narcotics in the US Treasury was a very material reflection—locked up in concrete vaults—of the importance the government attributed to controlling drug commodities. Narcotics embodied the growing interdependence of corporate and government power with the government ostensibly storing private companies’ stockpiles for future use. Anslinger bragged the government “does not own an ounce of” the stockpiled opium. “Manufacturers and medical supply houses furnished the money to purchase it through the government, and hold the rights to use it under federal sanction for medical uses as needed.”23 Drug commodities, and the public and private institutional networks involved in regulating them, did in fact do much of the work of establishing a new world order, and drugs assumed a powerful place among the transferable assets of capital with their remarkable interchangeable properties.

  Storing and controlling the flow of drug commodities bolstered national power, while at the same time becoming more difficult throughout the 1940s as the quantities of drugs in circulation continued to grow. While the Naval Supply Depot in Clearfield, Utah, had apparently not been informed of the government’s directives granting the FBN centralized control over drug dispositions at the time of the prison fiasco, many government agencies did comply with its imperatives. There were a number of different ways that drugs made their way to the FBN’s Drug Disposal Committee. In addition to drugs received from the War Assets Administration, the FBN itself accumulated drugs it had confiscated in police raids, as well as from stocks of drugs surrendered by retail drug stores that were going out of business. The FBN worked hard to ensure the fate of these drug stockpiles bolstered its own institutional importance in relation to the government’s national security efforts, even as the Treasu
ry Department’s vaults rapidly proved inadequate for the growing cache.

  This was one of the reasons why the FBN was not eager to cooperate with a 1952 US Attorney’s Office investigation into an illicit cocaine ring in Washington. In an exposé of the investigation published in the Saturday Evening Post, the Assistant US Attorney revealed that the source of cocaine had been traced back to the vaults in the basement of the US Treasury. Since as far back as 1949, a janitor working in the Treasury Department had been supplying “several major narcotics offenders, big operators who had been in business for years.” Over the course of two and a half years an estimated thirty to one hundred ounces of cocaine and between twenty and fifty pounds of marijuana had been delivered to the “underworld.” The US Attorney’s Office and Federal Bureau of Narcotics agents took the indicted janitor, Eddie Gregg, to the Treasury Annex to demonstrate his methods. As the story was told, “The entrance to the room was a heavy grilled-iron door with a section of steel, encasing the lock, across the middle. There was a knob on the inner side of the lock, but none outside. Unless he had had a key, it was difficult to imagine a man getting past this formidable roadblock.” So “Eddie looked around and spotted a piece of brown cord, like that used for wrapping packages” (one might wonder how it came to be there for the demonstration) and managed to work the doorknob from the other side. The incident reveals—as does the story of the prison in Utah—the tenuous delineation of legal and illegal commodity circuits, along with the inevitable—and often profitable—slippage that occurs at its boundary.24

  Eddie’s easy entry made a mockery of the Treasury vault’s security system and oddly exposed the futility of the Federal Bureau of Narcotics’ preoccupation with security and controls. More striking, the chairman of the FBN’s Drug Disposal Committee was unable to provide investigators with an accounting of the quantities of drugs stolen. His explanation that “the system used in keeping inventory in the storeroom, losses or thefts could be sustained and yet not be recorded” was vastly inconsistent with the FBN’s own directives and warnings concerning the handling of such stockpiles. Whether true or simply told to the grand jury, this inconsistency reveals the uneven expectations of accountability and powers of enforcement in the realm of drug control at that time. In the end, considering the impossibility of determining that any given quantity of drugs had been stolen, the grand jury cited the FBN for “negligence” and was forced to dismiss several of the indictments for lack of evidence.25

  Commissioner Anslinger, unsurprisingly, preferred to highlight the necessary and valuable role the FBN played in bolstering the nation’s defenses. The same year the Treasury vaults began supplying DC’s drug trafficking underworld, the commissioner boasted to Congress of the FBN’s expertise in handling drug surpluses and the valuable role the institution played with regard to defense mobilization. Appearing before the congressional committee tasked with approving the FBN’s annual budget in February 1949, Anslinger described how the bureau had “sent, since the war’s end, some 30 express cars” to the “Munitions Board Stockpile,” which he estimated accounted for “several million dollars worth of the stuff.” The “stuff” in question seemed to include an array of drugs; as the commissioner explained, “the only drugs that we destroy are drugs like marijuana, for which there is no medical need.” The commissioner reassured his audience that the FBN handled drugs appropriately to maximize public safety and provide for the national defense. If there was any question over the chemical content of the drugs coming into FBN possession, Anslinger explained, he passed the drugs on to a pharmaceutical manufacturer licensed to work with narcotic “alkaloids,” which in turn purified the questionable substances before the FBN sent them on to the strategic stockpile.26 Drug surplus stocks grew so large that by June 1952 the Federal Bureau of Narcotics was overwhelmed by the quantities of surplus narcotics being transferred into its custody.27 As a result, the FBN procedure for handling the drugs—having all surplus narcotics pass through the FBN to be recorded, tracked, stockpiled, or released for final disposition—was modified to have drugs shipped directly through the General Service Administration either on to the national stockpile or turned over to authorized manufacturers for reprocessing: “to purify all of this stuff,” as Anslinger put it.28

  The pharmaceutical industry found itself in a unique position, with private drug manufacturers assuming a central role in government defense mobilization as “reworkers” of drug materials. Private drug manufacturers were given the critical task of transforming excess into valuable goods. While the government designated an array of drugs essential to national defense and destined for national stockpiling, of those legally labeled “narcotic” only opium stocks were considered “deficient or insufficiently” developed and were therefore targeted for acquisition by the government.29 As the regulations outlined, “Opium and opium derivatives, and preparations thereof, (normally strategic and critical material) should be reported to General Services Administration by the holding agency and if acceptable for the purpose should be ordered to be forwarded direct to the stockpile.” All such transfers, whether to the national stockpile or the stores of manufacturers, continued to be tracked by the bureau, which made sure these excess narcotics were stockpiled in “adequately safeguarded storage facilities.”30

  Any drugs rejected for the stockpile should be destroyed or sent to a “registered manufacturer” where chemists could “rework the drugs . . . into a suitable form,” or exchange them for drugs “acceptable for stockpiling.” The bureau went on to specify that for medically valuable “surplus narcotic drug preparations” which were not needed for the national defense stockpile, including drugs such as “cocaine and the synthetics Demerol, Dolophine, etc.,” the preferred “mode of disposal” was to exchange them for strategic drugs of an equivalent value.31 From the government’s perspective the value of drugs like cocaine that fell into the FBN’s possession resided less in their chemical substance, or a fear of inadequate access to them, but in their exchange value. Thus drug commodities were a critical component of the new defense mobilization, either as nationally stockpiled material for the eventuality of war, or, as in the case of surplus cocaine, as a drug strategically exchangeable through the manufacturer for other narcotics like opium, needed for the stockpile. In the process, pharmaceutical manufacturers were integrated into the effort of defense mobilization as reprocessors, exchangers, and providers of strategic drug materials.

  RESOURCES FOR FREEDOM

  By the end of the decade the mutable value of drugs and the logic underlying efforts to direct drug market flows in the interest of national defense were important components of a much larger global and economic agenda being advanced by the government with a spirited imperial ambition bolstered by Cold War compulsions. A pamphlet issued by the Executive Office of the President, entitled “The Story of Defense Mobilization: How the United States Is Building Its Might in Order to Avoid a Third World War,” communicated this vision: “The increasing menace of the forces of communist aggression requires that the national defense of the United States be strengthened as speedily as possible.” The same day on which Truman declared a national emergency in response to events unfolding on the Korean peninsula, he also created the Office of Defense Mobilization (ODM) to coordinate and oversee all mobilization activities of the federal government. In particular, the ODM had two central aims: one, “to gear the American industry to production for defense,” and two, “to back up that mighty effort with a stable economy.”32

  The importance of resource stockpiling to secure this stable economy and American visions for a new world order was clearly illuminated when Truman convened a President’s Materials Policy Commission in January 1951: “We cannot allow shortages of materials,” the president explained, “to jeopardize our national security nor to become a bottleneck to our economic expansion.”33 The Materials Policy Commission’s task was to devise a plan to guide the acquisition and disposition of materials deemed essential to national security, a
nd to assess the adequacy of both government and private industry practices. The president advised that materials surpluses would provide for domestic necessities, and also that national security depended on international economic expansion to generate ever-greater material supplies so as to avoid any “bottleneck” that might obstruct a growing US empire. By the time the commission published its findings and recommendations in a 1952 report entitled Resources for Freedom,34 the problem of controlling the flow of raw materials that had so dominated US concerns during the war, as well as the problems of surplus materials disposition in the war’s aftermath, had increasingly been tied not just to control but to a perceived necessity of expanding that raw materials base. In an expression of the circular logic whereby growth was tied to demand which was tied to further growth, fusing the military and economic foundations of US capital’s expansion, Resources for Freedom explained: “Military security depends heavily on a vigorous and expanding economy to produce the overwhelming quantities of the equipment, machinery, and supplies necessary for modern military strength. On the other hand, healthy economic growth depends importantly on military security to maintain that climate of confidence in the future in which private enterprise flourishes. Neither military nor economic strength can be raised to its highest potential without an abundant and varied flow of materials.”35