Empire of Crime

by Tim Newark

  ‘You may also like to know,’ said Sir Malcolm, sounding like a high-level dealer himself, ‘that our Consul-General in the Persian Gulf has advised us that there would be no difficulty in making direct contracts with the Persian shippers, and if we could give you any help in the matter, I have no doubt the British Government would be very glad to do so. Perhaps we might have a talk about this when we meet in Geneva.’

  Apparently, Sir Malcolm was suggesting trading directly with the Persian opium producers and delivering the goods straight to their imperial Asian partners – anything rather than going through crooked middlemen. Eight months later, however, and Sir Malcolm’s friendly little words with Asian foreign ministers seemed not to have had the effect he hoped and a senior figure in the Colonial Office, Mr J.J. Paskin, followed up Delevingne’s request with a series of stronger warnings to all colonial governments.

  One letter was sent to the British North Borneo Company – which had already had a run-in with the Americans over its Chinese merchants selling opium to the Philippines. Paskin told them: ‘You are, of course, aware that most of the Far Eastern Governments (British Colonial and others) which used to get practically the whole of their supplies of opium from India have been compelled to turn to Persia to supplement their restricted supplies of Indian opium. The cumulative effect last year was to create a boom in Persian opium.’

  The main subject of the letter – as with Delevingne’s – was the king of the black market dealers: M.A. Namazie. Having already pulled off one deal, selling opium to the Strait Settlements, they really didn’t want to see any other colonial government trading with the Persian wheeler-dealer.

  ‘You are no doubt familiar with the reputation of various branches of the Namazie family in Persia and elsewhere in connection with the illicit traffic in Persian opium,’ explained Paskin, ‘large quantities of which find their way into China. The employment by a British Colonial Government of a member of a family with a reputation like this was obviously open to serious criticisms which might be difficult to meet if they should be brought forward at Geneva.’

  This was the crux of it. Britain, with its prominent anti-drugs stance taken at the League of Nations, did not want to be embarrassed by its colonial governments making grubby little deals with gangsters like Namazie and his family. It was a matter of international prestige, especially as Britain was taking a lead in telling other nations not to partake in the illicit traffic in opium.

  ‘I do not know whether the Company has bought any opium through this firm,’ Paskin warned the British North Borneo Company, ‘but in any case, we trust that they will see the desirability of falling into line with instructions given to the Straits Government.’

  Not everyone was impressed by this argument. The French colonial government of Indo-China (now Vietnam, Cambodia and Laos) had already struck a deal with Namazie. Sir Edward Cook, who was the British financial adviser to the King of Siam, took exception to the Colonial Office’s hectoring stance. He believed this was a situation created by their own short-sighted attempts at prohibition and was not afraid to tell them so.

  ‘India’s impulsive gesture, which earned such easy applause at Geneva,’ complained Sir Edward Cook, ‘has forced Siam to take measures to safeguard her supply, and is making more difficult the task of these governments of opium-smoking countries which are genuinely trying to bring the habit under effective control.’

  Cook’s no-holds-barred confidential report was dispatched to London in September 1927.

  ‘Illicit opium, mainly of Chinese origin, is pouring into Siam, partly by sea and partly from the north via the Shan States,’ said Cook. It was selling far more cheaply than legally obtained opium and was undermining the Siamese government’s attempts to ration and register opium smokers and dealers. Indeed, it was subverting the role of Siamese officials, who were being bribed to accept the cheaper illegal opium. In the meantime, the Siamese government was seeking to import replacement opium from Persia, but this was forcing her into the hands of some unsavoury characters.

  ‘Namazie is a freelance and stands outside the ring of Jewish and Armenian dealers,’ noted Cook. ‘He is a British Indian subject by domicile, but a Persian by race. He has intimate connections with the Persian dealers at Bushire [now Bushehr on the Persian Gulf coast] and can nearly always “get in first”.’

  Based in Singapore, Namazie was able to manipulate the market and sell opium to those middlemen who had struck deals directly with South-East Asian governments, including that of Siam and the Straits Settlements, leaving him with considerable profits. ‘Naturally, it is an advantage to deal direct with Namazie … On the one occasion on which Siam purchased Persian opium (1110 chests), Namazie quoted substantially less than did the Jews.’

  ‘Namazie is neither better nor worse than the other dealers,’ insisted Cook. ‘He differs from them in being (a) in better touch with the Persian trader (b) much less well-educated. To the whole lot of them the idea of being deterred by conscientious scruples from doing a promising piece of business, is unintelligible.’

  To boycott Namazie, as London was ordering, would serve no good purpose, argued Sir Edward Cook, ‘but would be of the nature of eye-wash’.

  ‘The whole business is a dirty one,’ he concluded. ‘It was not from choice that Siam bought opium from one of the Singapore dealers. She would have been quite content to continue purchasing from India; the price, it is true, was extremely high, but the supply was assured and the opium is pure.’

  Cook felt the price of legally supplied opium was way too high and encouraged smuggling. He had been approached by some British firms, who promised to supply Siam with good quality opium, ‘but I must say their names – Ziegler and Shirazee – don’t inspire confidence.

  ‘I have been forced to the conclusion that any further step forward in Siam in the direction of opium suppression, as well as any success in dealing with smuggling, will necessitate some reduction in the retail price of licit opium.’

  Cook’s lengthy and knowledgeable response to the Colonial Office’s interference into Asian affairs was passed on to the British Foreign Secretary with a note saying ‘worthy of sympathetic attention’. It was a strong rebuttal to Delevingne and the liberal establishment.

  The crisis faced by Delevingne in 1927 was stark. He had succeeded in stopping the Indian government from exporting opium throughout South-East Asia, but there were millions of opium addicts, mainly Chinese, who still demanded their daily fix. With Persian growers and dealers happy to step in and undercut colonial attempts to control the price of opium, the illicit trade was growing rapidly, giving greater power to the narcotics crimelords. The governors of the colonies were getting impatient for action and leading the discontent was Sir Cecil Clementi, Governor of Hong Kong.

  ‘If no effective opposition is offered,’ said Sir Cecil, ‘the position of the opium smuggler will grow daily stronger. The interests concerned to oppose ultimate reduction and the profits of the return to illicit business become progressively more formidable. The Hong Kong market is extremely desirable and annual profits from smuggling were not less than 1,000,000 dollars.’

  Unless something was done and done quickly, Hong Kong was in danger of becoming the centre of a world trade in illicit drugs.

  ‘There is still enormous wholesale opium smuggling from South China,’ continued the desperate Sir Cecil, ‘for which Hong Kong is the natural port of shipment and through which the Colony is brought into disrepute. Such business will be encouraged further by any relaxation or failure of the only effective attack that Hong Kong is in a position to make on any part of the smuggling system.’

  The situation was getting worse day by day because of the civil war raging in mainland China between rival warlords in the wake of the collapse of the Qing Dynasty in 1911. Chinese refugees were flooding into Hong Kong, raising the colony’s population from 600,000 to 900,000 and quadrupling the consumption of opium.

  ‘Reduction of opium consumption is impos
sible,’ said Sir Cecil Clementi, ‘so long as militarists require money, China encourages the production and Hong Kong remains the main shelter for refugees.’

  To bolster their war chests, the competing warlords, including the nationalist Kuomintang leader Chiang Kai-shek, who would emerge victorious the following year, were keen to exploit the money-making potential of the opium trade by growing and selling it.

  In order to defeat this wave of illegal opium threatening to engulf all British colonies in South-East Asia, there was only one answer Sir Cecil could think of. That was to become a dealer himself – to become the biggest dealer in the region. It was, in fact, an idea that had been mulled over by Delevingne himself, in his correspondence with Prince Charoon of Siam earlier in 1927, when he suggested introducing him to Persian exporters. But the difference between Delevingne and Sir Cecil was that the Hong Kong Governor wanted to radically increase the amount of opium he imported in order to challenge the illegal smugglers directly. Sir Cecil’s daring idea was the result of a life spent in South-East Asia, dealing with the reality of gang life on the streets of British colonies.

  Sir Cecil Clementi was born in Cawnpore, India, the son of a colonel, and was educated at St Paul’s School and Magdalen College, Oxford, where he studied Classics and Sanskrit. A tall, athletic and handsome man, he easily won the respect of his peers. An outstanding scholar and linguist, he was placed fourth in the civil service exams of 1899 and could choose where he wished to serve. Arriving in Hong Kong, he passed his Chinese language exams with ease and was appointed Assistant Colonial Secretary and Clerk of Council in 1907 at the age of 32.

  On top of all this, he was the nephew of Sir Cecil Clementi-Smith, the former Governor of the Straits Settlements, a man who knew more than most about the opium trade and the ruthless gangs associated with it. The young man had accompanied his uncle, who was the chief British delegate, to the International Opium Commission in Shanghai in 1909. During this trip, he learned not only everything about the opium trade, but also that it was his fearless uncle who had dared to challenge the rule of the Triads.

  After Sir Cecil Clementi-Smith had retired to England, he received a telegram from a Chinese merchant living in Singapore. The wealthy gentleman invited the former governor to have his portrait painted by any artist he liked – he could draw the money for the commission from his bank account in London. The generous gift was to express the merchant’s gratitude at being able to live and carry on his business ‘without fear of murder or blackmail’ – an immunity which he justly attributed to Sir Cecil Clementi-Smith. The portrait hung in the Royal Academy.

  When Clementi-Smith had become Governor of the Straits Settlements in 1887, he had made it his number one priority to tackle the local organised crime syndicates, known as Secret Chinese Societies. How dangerous this could be was revealed in that same year when William A. Pickering, a fluent Mandarin speaker and self-styled ‘Protector of the Chinese’, took on the Ghee Hok Society – a notorious crime gang.

  On 18 July 1887, Pickering was sitting in his office when he was approached by a Chinese carpenter offering him a petition. As Pickering gazed at the paper, the carpenter pulled out an axe and slashed at his forehead. A Chinese assistant tried to intervene but was killed outright. Pickering survived the assassination attempt, and the Ghee Hok Society felt the full weight of government punishment, with all their headmen being banished.

  No colonial government could succeed in South-East Asia unless it got a grip on the secret societies that dominated their Chinese communities. In Penang in 1887, it was estimated that these gangs had 92,581 members and they controlled all the illegal activities in the colony, including gambling, extortion and prostitution. Frequently, clashes between rival gangs broke out into violent street fights. Their gambling dens were protected behind armoured doors and located down narrow passages, with trapdoors allowing a quick escape. ‘Their organisation is so perfect,’ said one report, ‘their power for striking a blow against the Government so easy and swift, that in a new country, where the security of life and property is all important, their presence cannot be otherwise than a bane.’

  In 1889, the Rajah of Sarawak – descended from Sir James Brooke – feared the growing influence of Ghee Hin Secret Society members in his country and had six of their leaders arrested. After a short trial, the six headmen were put before a firing squad of Sarawak Rangers and executed. A statement in the Straits Times proclaimed: ‘The Rajah of Sarawak knows from painful experience what evil Chinese secret societies can work … The Rajah, on discovering what was brewing, lost not a moment in frustrating their plans. Secret society men know now what awaits them in Sarawak, and if they choose to take the risk they deserve the penalty.’

  Interestingly, in 1889, newspaper correspondents were already beginning to use a different title for these secret societies – a name that would later be used to describe Chinese gang members in the British Far East: the Triads.

  The power of the Chinese gangs grew undiminished into the twentieth century and in Kuala Lumpur in 1909, when colonial police clashed with them, it resulted in a bloodbath. ‘The Chinamen were dressed in red cloth,’ said a Singapore reporter. ‘On approaching the temple the police were met with a volley of bullets and the fiercest fighting ensued, four Chinese being killed and many wounded. A European inspector and a Sikh constable were severely wounded.’

  With the eruption of illicit drugs trading following Britain’s opium prohibition, it was natural that these Chinese gangs should dominate the distribution of narcotics in Chinese-populated cities throughout South-East Asia. When the 50-year-old Sir Cecil Clementi became Governor of Hong Kong in 1925, he knew this very well, not only from the advice of his streetwise uncle, but also from his own personal experience on the streets of the colony.

  More than anyone else, Sir Cecil knew the danger this posed to Britain’s ability to control the rapidly growing Chinese population in their colonies, and for that reason he was willing to go further than any other governor and think the unthinkable.

  In defiance of the British government’s agreement at the Hague Convention to severely limit the buying and selling of opium within her empire, with the aim of suppressing opium smoking completely, Sir Cecil was a realist. In order to defeat the smugglers and destroy their empire of crime, he wanted to buy large quantities of opium directly from Persia and dump it cheaply on his home market – putting the smugglers out of business at a stroke. To achieve this, the Governor needed to buy 40 chests of opium a month from Persia, in addition to its annual allowance from India of 196 chests. That meant more than doubling the amount of legal opium entering the colony.

  While he waited for official permission from London, Sir Cecil embarked on his personal drug-dealing exercise by unleashing more legal opium on the market. Within days, government sales had quadrupled. Initial feedback seemed to justify his gamble.

  ‘Steps taken in Hong Kong have now passed beyond the experimental stage,’ reported Sir Cecil to London, ‘and the fact that there is no sign of increased consumption to balance the increase in Government sales shows its success, which is further evidenced by the fact accepted in the Colony that the smugglers have had a serious set back. In addition the daily average of opium offenders in jail has fallen from 540 to 361, a very important factor in view of its chronic overcrowding.’

  Sir Cecil’s policy seemed a miracle cure for crime. To carry on, he needed further supplies of opium and asked permission to import these from Singapore while he awaited an influx of opium from Persia. If he didn’t get it, he warned, ‘I submit that the domination of the Hong Kong opium market by smugglers may be expected to produce greater international difficulties than any misrepresentation of the successful attempt to make opium smuggling in this Colony less profitable now being made by this Government.’

  Sir Cecil’s pre-emptory action caused a sharp intake of breath among the pen-pushers in Whitehall. At a secret Cabinet meeting, the disapproval of His Britannic Majesty’s Gover
nment was made clear.

  ‘It seems to us to be very regrettable that the Governor should have introduced without previous consultation with his Majesty’s Government so serious a departure from its established policy.’

  Everyone now turned to Sir Malcolm Delevingne to pick up the gauntlet thrown down by the rogue Governor of Hong Kong.

  ‘The position in the Colony is that the plentiful supply of opium from China has greatly increased the consumption of opium in the Colony,’ admitted Delevingne. ‘It may be conceded at once that if there was a good prospect of driving the smugglers permanently out of business, the resulting advantages would be so great in the long run as possibly to outweigh the disadvantages.’

  But, argued Delevingne, to succeed with this campaign would mean Hong Kong committing itself indefinitely to supplying cheap opium to its consumers. As soon as any attempt was made to reduce the supply of opium in order to suppress the habit, the market would be invaded once again by cheap illicit opium from China. It seemed an unsustainable stance, for Sir Cecil to carry on being the chief supplier of opium to his population – ‘the sales of Government opium will rise to an enormous figure’ – and with it would come an enormous increase in revenue.

  In the old days, this would have been very acceptable – indeed, desirable – but not in the third decade of the twentieth century.

  ‘It is hardly necessary to point out,’ said Delevingne, ‘the handle this situation will give to the anti-British propagandists and the critics of our policy in the United States, in China, and no doubt also in Japan, which is watching us closely. It is inevitable also that our hands will be weakened at Geneva in the efforts we are making to bring the much bigger problem of the drug traffic under better control.’