Opium Traders and Their Worlds-Volume Two: A Revisionist Exposé of the World's Greatest Opium Traders

By M. Kienholz

Opium Traders-Volume Two continues the history of opium commerce at a point where the Sassoons of Persia, closely connected with the Rothchilds, won control of the trade. The Sassoons celebrated when the monopoly of the British East India Company was repealed; they used their business expertise and parliamentary connections in London to grab nearly 80% of the drug trade out of India. Connections with British royalty made possible their important involvement in securing Israel as the Jewish Homeland. The Sassoons' extensive holdings in India and China were encroached upon as a result of India's independence movement and China's takeover by communists.

Indian independence strengthened the hold of the Parsee family of Tatas, who, in the 21st Century are advertising the development of a "People's car" estimated to cost about $2,500. China's takeover by communists, who now hold a monopoly of China's expansive opium trade, followed the Taiping and Boxer Rebellions and the revolution of Sun Yat-sen and Chiang Kai-chek. These militant movements are summarized.

Japan's exploitation of opium in the Manchuria-Manchukuo era, through secret societies, is detailed.

The opium trade of East Asia and the Middle East is further elaborated in descriptions of the cultivation of poppies of Iran, Iraq, Pakistan, Russia, Turkey, Burma, Vietnam, Afghanistan and Indonesian territories.

Contemporary poppy fields of Mallinckrodt, opium and labor smuggling during the years of railroad building and Mafia activity in the United States are addressed.

• Language: English
• Publisher: iUniverse
• Release date: Oct 13, 2008
• ISBN: 9780595613267

M. Kienholz

M. KIENHOLZ, researcher, poet, and author of eight books, graduated magna cum laude/Business Administration from Eastern Washington University. A professional secretary and career police stenographer, Kienholz worked with The Honorable Albert F. Canwell from the 1960s to 2002, managing his confidential files and associated library, bookstore, and print shop.

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Opium Traders and

Their Worlds—Volume Two

A revisionist exposé of

the world’s greatest opium traders

M. Kienholz

iUniverse, Inc.

New York Bloomington Shanghai

Opium Traders and Their Worlds—Volume Two

A revisionist exposé of the world’s greatest opium traders

Copyright © 2008 by Mary L. Kienholz

All rights reserved. No part of this book may be used or reproduced by any

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ISBN: 978-0-595-49977-9 (pbk)

ISBN: 978-0-595-61326-7 (ebk)

Printed in the United States of America

For my children and grandchildren—

My guidepost in this narrative is: Truth is often neither easy to discover nor comfortable for those who hide it, but it should be as free to be revealed as to be hidden. And remember that even a hardheaded buffalo lets the chips fall where they may.

Contents

Introduction

Chapter Twenty-six

Chapter Twenty-seven

Chapter Twenty-eight

Chapter Twenty-nine

Chapter Thirty

Chapter Thirty-one

Chapter Thirty-Two

Chapter Thirty-three

Chapter Thirty-four

Chapter Thirty-five

Chapter Thirty-six

Chapter Thirty-seven

Chapter Thirty-eight

Chapter Thirty-nine

Chapter Forty

Chapter Forty-one

Chapter Forty-two

Chapter Notes

Bibliography

Reference Works

INTRODUCTION

Volume One of Opium Traders and Their Worlds examines the great trading companies, their rivalries and aggressions, with emphasis on Britain’s East India Company, the greatest winner in these events. It reviews the history of the opium colonialists of Boston and New York who had their day as leading drug shippers and discusses the trade’s ship builders, ships, and captains.

Volume Two describes the power shift from trading companies to East Asian and Middle Eastern opium traders such as the Jewish Sassoons, Parsee Tatas, Chinese Triads, Japanese imperialists, and the so-called Golden Crescent and Golden Triangle. It culminates in a review of some aspects of the opium trade in the United States, including the opium operation at John Day, Oregon, and the more recent poppy experiment of the Mallinckrodt Company at Yakima, Washington.

These volumes are described as revisionist, and they are to the extent that the information collected, although available out there, is so skillfully ignored by historians that it is shocking to some readers. Nevertheless, knowledge of the reality that narcotics, past and present, are an important part of foreign, as well as local, policy is necessary if citizens are to vote intelligently.

CHAPTER TWENTY-SIX

THE SASSOONS AND THEIR NEXUS

In 1871, the Sassoon group was acknowledged to be the major holder of opium stocks in India and in China; they were owners and controllers of seventy percent of the total of all kinds.

—Edward Le Favour1

How is it that a single family, that of David Sassoon (1792–1864), a refugee from Persia, came to dominate the India opium trade? How did his circle effectively push aside members of the Malwa opium syndicate established in 1820 by Magniacs, Davidsons, and Dents; allegedly marginalize the great Jardine-Matheson firm’s opium trade; and overtake British East India Company freelancers and Boston, Salem, Philadelphia, and New York firms? By 1871, the Sassoons controlled seventy percent of the middle-man opium market in both Malwa and Patna opium auctioned in Bombay and Calcutta, with the Chinese distributing much of the drug inside China.

David Sassoon’s dynasty might be considered the successor to Jardine-Matheson & Company, although David was contemporary with that company, arriving in India the year Jardine-Matheson adopted its present name (1832). Malwa opium had by then come into its own and constituted one-third of all Bombay trading revenue.

Competitiveness, history, and politics were the thumb and fingers that pushed David Sassoon (1792–1864) through the needle’s eye. His father was an affluent Baghdad merchant whose family had transferred from Spain to Persia in the sixteenth century. In 1828, David Sassoon went from wealth in Baghdad to allegedly sleeping as a fugitive in a merchant’s shed on a wharf at Bushire, shooting rats, whose scampering toenails kept him awake. It is reported that during the year 1830–31; i.e., the year before arriving in India, the Sassoons trafficked in 18,956 chests of opium; and opium trafficking may have been a family tradition for generations. The Sassoons blamed their fleeing Persia not on their opium dealing but on outbreaks of anti-Semitism.

David Sassoon’s father was married to Amam Gubbay (Gubbai), member of a wealthy Jewish family in the opium trade of Mesopotamia and India. David claimed to be descended from King David.

Continuing from Bushire to British India, David Sassoon found a personal financial angel and over time became mogul of a far-reaching multinational mercantile empire founded on opium. One of David’s tactics was to undersell other opium dealers for five years. Another tactic was to advance money to growers a la mode the East India Company and to practice usury. (Usury also was used successfully by John Jacob Astor to short-change Native Americans in the fur trade.) These techniques gave him substantial control of the Malwa raw opium market by 1860.

David took control of the Patna market by outbidding his competitors at auction. His tactics were effective but required considerable capital in hand.

Important factors in Sassoons’ successes were the British vs. China Opium Wars that in 1842 and after opened China’s large ports, eventually forced acceptance of opium sales throughout China, and brought about the fortuitous opening of the Peninsular & Oriental Steam Navigation Company (P&O Co.). Though Sassoons owned the Persian Gulf Steamship Company, the P&O Co.—which merged with British India Steam Navigation—gave the Sassoons an important medium for transporting their overall trade to distant ports. This shipping line was included in the Inchcape Group. The Chairman of P&O Co. was James Lyle Mackay Inchcape, who was a member of the Council of India. The steamship line became a British conglomerate—a subsidiary is P&O Australia.

Another aid to success in the opium trade was consumer propaganda and promotion. In China, fraudulent assurance was given the public that opium was a cure for a variety of diseases, even leprosy, which already had been successfully treated for centuries there with chaulmoogra oil. The Sassoons even opened a leprosy infirmary in Britain, presumably with their magic addictive sap as medicine.

David Sassoon extended his business by establishing branches in Calcutta, Shanghai, Canton, and Hongkong and, obtaining a monopoly in the opium trade, reached out to Yokohama and Nagasaki in Japan.2 His apparatus for shipping to the West has not been adequately explored.

David Sassoon added raw cotton to his trading inventory in 1840. The Sassoons are said to have put many of Britain’s Lancashire cotton mills out of business through their ruthless tactics. David eventually managed to capture contracts to provide cloth for the Indian army.3 With strong guarantees in both opium and cotton, he could relax at the end of a busy day with the Parsee opium tradesman Jamsetji Jeejeebhoy, listening to Persian melodies strummed softly on Indian stringed instruments, or take a solo smoke with his rose-scented hookah, reflecting on his various philanthropies.

The Sassoon dynasty, like its trading vessels, reached far beyond the boundaries of India. The Sassoons were connected by marriage with Gunzburgs, a wealthy banking family in Russia. David Sassoon’s grandson Joseph (1855–1918) married Louise de Gunzburg. Baron Horace Gunzburg (1833–1909) was a Jewish Bavarian financier in St. Petersburg and an ambivalent financial adviser to the Russian treasury. The Baron was a supporter of the Social Revolutionary, Aleksandr Kerenski. The Baron was married to Rosa Warburg, daughter of Siegmund and Theophilie Rosenberg Warburg. A cousin of the St. Petersburg Gunzbergs, Paul Warburg, served an apprenticeship in one of the Gunzberg banks (perhaps the Banque Russe pour le Commerce Etranger, Paris.) Paul was a founder of the United States Federal Reserve System.

David’s son, Reuben Sassoon, was assigned to 12 Leadenhall Street in London. There, his wife Kate Sassoon (née Ezekiel) who, perhaps disturbed by Reuben’s excessive intimate association with the Rothschilds and the Prince of Wales, smoked a hookah incessantly, became porcine and had to be carried up and down stairs of her luxurious home.4

Sassoon mansions in England and India were renowned—David Sassoon’s Sans Souci (Malabar Hill) and Garden Reach (summer home, Poona or Pune, India), Edward’s Trent Park (later Philip Sassoon’s), Ashley Park (S.D. Sassoon’s), Port Lympne (Philip Sassoon’s), and Hyde Park (Louise and Arthur Sassoon’s)—received rave notices in the society pages.

The daughter of Flora Sassoon Feuchtwanger married David Ezra. The Ezras invested in a personal zoo with exotic animals from Africa and other countries. Their mansion boasted a ballroom that would accommodate 150 dancers. The mansion, confiscated by Chinese communists, now houses the People’s Armed Police.

Part of the Sassoons’ financial success was the result of the syndicate formed with brokers E. Gubbay and E.D.I. Ezra to corner the supply of raw opium.5 However, David’s wealth, like that of the Rothschilds, sometimes was largely attributed to his clutch of sons who were established in business with capital especially from the family’s two staples, opium and cotton, and by labor capital in the form of both slaves and slavish and grateful Jewish refugees. Jacob Sassoon (1844–1916) of Bombay, grandson of David Sassoon, Sr. and son of Elias David Sassoon, alone worked fifteen thousand laborers on his cotton plantations.

Family patriarch David Sassoon, himself one of seven Baghdadi sons of Sheikh Sason ben Salah (1750–1830), was as prolific as his father. In addition to eight sons, he had numerous grandchildren—fourteen of his grandsons were exalted to commands in the British military during World War I.

David had been engaged to Hannah Joseph while in Persia in 1807 at the age of fifteen and they married. Two years after her death in 1826, he married Farya Hayeem (1812–86), twenty years his junior. At the time of his exit from Persia, he had two sons by Hannah—Abdullah Albert Sassoon and Elias David Sassoon—and two daughters. Elias David or E.D. arrived in China (1844), where he dealt in opium and textiles.6 David’s second wife, Farya, was to bear six sons: Sassoon David Sassoon, Reuben David Sassoon, Arthur Sassoon, twins Aaron and Solomon Sassoon, and Frederick Sassoon. All David’s sons were trained in business and performed with greater or lesser skill and avidity.

The godfather who financed David Sassoon’s first godown in Bombay was a family friend, Samuel Zacharia of Shiraz and Bushire, who was well acquainted with traders from Persia (i.e., Parsees). These Parsees, and probably the Sassoons as well, were old hands at India’s opium trade and were familiar with its established network.

Like other opium families, the Sassoons developed a dizzying maze of links through marriage to money, and consequently to banks that could finance businesses, stabilize cash flow, and hide or launder opium income when necessary. The importance of liquidity was demonstrated in an 1897 epidemic of bubonic plague in India. The Sassoons had invested large sums into India’s textile industry and in 1861, the initial year of the American Civil War, cotton was second only to opium in sales value. At the time of the Black Death, ten thousand workers fled from India’s textile mills each week, which would have overwhelmed most business owners. The plague was followed by Asiatic cholera and malaria. Even this series of adversities, when ports were quarantined and trade was at a standstill, did not bankrupt the huge Sassoon textile mills. The Sassoon connections to the ultra-wealthy families of Ezras and Gubbays, Rothschilds, Isaacs, Gunzbergs, Rosenbergs, Channings, Benjamins, Hardoons, and Baghdad Sassoons were indispensable, their financial resources enormous and their setbacks temporary.

Silas A. Hardoon was not related to the Sassoons but, like the Sassoons, was an opium trafficker. He, too, left Baghdad under Daud Pasha, the last local ruler of Mesopotamia (deposed in 1831 by Sultan Ali Reza Pasha), and worked for Sassoons until 1882 when he went into the cotton trade. After three years in that trade, he took a management job with E.D. Sassoon and became immensely wealthy. He and his Chinese wife adopted ten children and had them schooled in English, Chinese, and Hebrew.7

Flora Sassoon is described as one member of the family who visited with the many Sassoons who remained in Baghdad. As an indication of Sassoon influence post-Daud, she is described as staying in the Pasha’s palace at the port of Basra during trips to Iraq.8 Sassoon relatives including Heskel Elkebir (1740–1816), whose first wife was the daughter of Jacob Aaron Gubbay, were located in Basra.

A grandson, Heskel Shoua Heskel Elkebir (Ezekiel Abraham, 1824–96) married Aziza Sassoon, the daughter of Sir Albert (Abdullah) Sassoon. One of Heskel’s large brood, daughter Flora (Farha) Sassoon, married her second cousin Solomon David Sassoon (1792–1864), son of Sheik Sason ben Saleh and Amam Gubbay. She was his second wife. Solomon David died before the Sassoon monopoly reached its zenith.

United States physicians noted that about 1870, a great stimulus seems to have been given to the cultivation of the poppy [in Persia] and to the improvement of the product.9 This stimulus was the result of several factors, including the boost in opium sales to the United States during the Civil War, Sassoons’ lucrative new monopoly in the Far East, and perhaps Flora’s visits to the Middle East.

Sassoon females who married outside the family solar system sought spouses who could help the family prosper. However, endogamy was practiced especially by kabbalists (some of whose works were collected by Sassoons) and their imitators in both the Rothschild and Sassoon dynasties frequently married cousins, welding strong family links. Meyer Sassoon married Mozelle Gubbay. A.M. Gubbay was the son-in-law of Albert Sassoon. David’s son Elias David Sassoon married Leah Gubbay. David Gubbay succeeded Frederick Sassoon as head of one of David Sassoon’s reorganized companies and also followed Frederick as a director of the Imperial Bank of Persia, with which these families (and Great Britain) had close ties. The Imperial Bank had been imposed on Persia by order of the British government. It was organized in 1899 principally by Glyn Mills, J. Henry Schroder, and David Sassoon & Sons, after the Shah’s visit to England as a guest of Sir Albert Sassoon. It was capitalized at £2 million sterling10 or, according to an Encyclopedia Britannica article, Persia, £4 million. It absorbed the banks of Bushire, Isfahan, Tabriz, and Tehran. After capturing the concession to issue notes from Baron Julius de Reuter’s bank, the Imperial Bank controlled the issuance of notes to 1930, when the Persian government funded the Bank Mellie Iran and took over that function. Tied to the Imperial Bank investment was a concession from the Shah to exploit Persia’s resources for sixty years.11 Such large-scale coups resulted in part from massaging relations with Britain’s royal house and government officials, whose control extended even beyond Britain’s colonial holdings.

Besides his important family connections, a natural aptitude for aggressive strategy propelled David Sassoon to master hurdles placed in his path. One of these hurdles was the East India Company monopoly. It was legislated out of existence in 1834 under the combined pressure of both opium traffickers and excluded general traders, a mere fifteen years after the Bombay opium auction was opened. When EIC lost its monopoly power, David Sassoon threw a victory party to celebrate.12 Suspicion that money bought surrogate votes was rampant.

Duties levied on imports to Britain were another problem for shippers and the Sassoons lobbied for reduction or cancellation. In 1846, the English Free Trade Act was lobbied and passed. In 1849 the Navigation Act was repealed, removing restrictions on non-British shippers.

During the early 1830s, when David was actively squeezing them out of the opium trade, many of the influential agency houses folded their tents and went home. Dent & Company and the Palmer House closed their Asian offices. The House of MacIntosh and Co. failed in 1832; Daniel Beale & Co. (Magniac & Co.) claimed to have failed in 1815 but continued under a new name and became Jardine-Matheson. Fairlie & Co. suspended payments in 1833. Its partners, David Scott and Henry Bonham, were members of Parliament but were unable to save the company. John Jacob Astor in a moment of prescience dropped out of the opium trade and sold his opium fleet in 1827, seven years before he sold his American Fur Company. He was in poor health. There were other failures and exits that boomeranged from the Opium Wars, which narrowed the number of businesses in the trade to a few who refused to take their fortunes and run.

Sassoons and the Rothschilds

Branches of the Sassoon family tree were sufficient to support the weight of a flock of businesses, all of which benefited by ready access to capital. The descendants of David Sassoon came to be described as the Rothschilds of the East after David began to harvest Britain’s veritable diamond mine of India opium. The Rothschilds of the East appellation was suitable not only figuratively but also literally since the Sassoons’ bankers, the Rothschilds, and the Sassoons intermarried. Rothschild banking connections available to the Sassoons were the family’s merchant banking houses in Frankfort, Vienna, London, Naples, and Paris. There were, in addition, the powerful ties to the Imperial Bank of Persia, the Bank of England, the Bank of Boston (Massachusetts), which handled the Sassoons’ Shanghai operation, and Asian banks.

The Rothschilds have made investments in most countries of the world and currently focus on financing, fund management, banking, mutual funds, diamonds, gold, and minerals. A few recent examples of N.M. Rothschild’s activity in the mining industry are illustrative. On 31 March 2000, in the company’s quarterly report to shareholders, Croesus Mining described its acquisition of the Davyhurst Gold (Australia) project from N.M. Rothschild and Sons, and a joint venture with Ramsgate Resources Limited, another Rothschild affiliate, at Kalgoorlie, Australia. N.M. Rothschild of London was the instrument in the acquisition of the Nifty Copper Mine of Australia (Straits Resources Ltd.) by Aditya Birla Group of India. N.M. Rothschild of Denver, Colorado, was the intercessor in the transfer of the Pittston Coal Company’s coal mining assets to Alpha Natural Resources. Financial support has been given to companies in Paris, South Africa, Indonesia, New Guinea, Norway, Israel, Japan, and elsewhere by the Rothchilds.

David Sassoon’s son Arthur Sassoon married Louise Perugia. Her father, Achille Perugia, was a member of an old patrician Italo-Jewish family. He was a distant relative of the Rothschilds. David’s grandson, Edward Albert Sassoon (1856–1912), 2nd Baronet, married Aline Caroline de Rothschild (1885–1908), daughter of Baron Gustave de Rothschild. Louise Perugia Sassoon’s sister Marie Perugia snagged Leopold Leo de Rothschild. Marie Perugia learned how to ride horses in order to rein him in.13 Leo’s father, Gustave de Rothschild, had enough clout to entertain the king of England in Paris, and the Prince of Wales attended Marie’s wedding.14 Meyer Amchel Rothschild (1743–1812) had older ties with the British government than did the Sassoons.15 Meyer’s daughter, Hannah Rothschild Rosebery, is given credit for initiating the Sassoons’ introduction to Marlborough House.

Alfred Sassoon sometimes lampooned his uncles, who provided opium (an established device for control of others) to the Marlborough House set, under the pretext of delivering incense.16 Reuben Sassoon’s photo album boasted pictures of Marlborough House, constructed for the Prince of Wales (1841–1910) (later Edward VII) and Princess Alexandra, the eldest daughter of Denmark’s Christian IX, after their marriage in 1863.

When David Sassoon died in 1864, Parsees and Jews closed their bazaars in mourning. Memories of the Sassoon family were perpetuated in institutions and memorials, not limited to Jewish industries and landmarks. The David Sassoon Library at Mumbai (Bombay) was initiated in 1847 and completed in 1870. It is a yellow stone building, the cost of which was shared by David and the government. Two statues recall David’s efforts: the statue of Britain’s Prince Albert, financed by Sir David Sassoon as an intentional flattery of Queen Victoria’s husband, and a statue of Sir David Sassoon by Thomas Woolner, financed by public subscription. The latter project was initiated by Sir Bartle Frere (1815–84), governor of Bombay, an 1867 member of the Council of India and first high commissioner of South Africa (1877), who was recalled for inciting the Zulu war.17 Notable contributors to the Sassoon memorial included the Montagues, Moccattas, Rothschilds, and British Prime Minister William Gladstone.

The August Belmonts and Their Circle

When, in 1837, the race to produce opium resulted in a market glut, a price crash, and a worldwide financial panic, many Asian banks had outstanding loans secured by opium stocks. During the panic, German-born August Belmont, Sr. (true name, according to Stephen Birmingham: Schoenberg) was rushed first to Havana, then to New York to buy depressed securities and financial paper for the House of Rothschild.

It is possible that August Belmont, Sr. (1816–90) is the mysterious and unnamed Rothschild agent mentioned by Josephine Goldmark in Pilgrims of ’48 who came to the United States to prospect for Rothschild investments during the opium-induced Panic of 1837. Goldmark’s book contains her story of the assassination of Habsburgian Austrian Defense Minister Count Latour by two men, one of whom was the Frankist kabbalist, Jakob Josef Goldmark, whose descendant Jo(h)n Goldmark served in the Washington State Legislature to the 1960s. Jonathan Goldmark’s uncle was U.S. Supreme Court Justice Louis Brandeis, who adopted Dembitz for his middle name in honor of his uncle Lewis Dembitz. The unidentified Rothschild agent traveled in the United States with Adolf Brandeis, whose mother was the sister of Lewis Naphtali Dembitz. The Dembitz, Goldmark, and Frankfurter families were prominent kabbalist families of Poland and Austria.18 Under indictment for murdering Defense Minister Latour, Dr. Josef Goldmark fled to Switzerland after the 1848 revolution in Austria. Although a dermatologist by profession, Goldmark learned how to make bullets in Switzerland, came to the United States, and became wealthy producing most of the bullets used by the Union Army during the Civil War. President Lincoln supplied armed guards to protect his factory. Josef did not return to his native country until after a change in political climate there and the disappearance of evidence.

Louis Brandeis’ nephew, John Goldmark, and John’s wife Sally (Irma Ringe), after John lost a race to retain his Washington state political office in the 1960s, were plaintiffs in an unsuccessful libel suit against Albert F. Canwell. Canwell was former chairman of the Joint Legislative Committee Investigating Un-American Activities in Washington State and a one-term state representative. Canwell had revealed Sally Goldmark’s (Irma Ringe’s) connection with the top-level Perlo-Kramer communist cell in Washington, D.C., and unsuccessfully invited her to recant. He had never named Sally’s husband, John, as a Communist Party member, although he did not doubt that this nephew of an indicted murderer was in the Party.

Before appearing in the United States, August Belmont, Sr. (1816–90) had been an agent of the Rothschilds in Frankfort, Germany, from the age of fourteen. He quickly settled into an important ecological niche in the United States, serving from 1844 to 1850 as consul general for Austria. There he was situated in close proximity to the Vienna House of Rothschild and was present during the assassination of Defense Minister Count Latour. His position allowed him to keep a trained ear to the wall of the Hapsburg dynasty during one of its most endangered periods.

In America, August Belmont, Sr. made good use of his political clout by promoting debt-financing by the City of New York and selling New York City bonds in Europe on commission. Through Young America, he also promoted free trade, the dissolution of international boundaries, republican revolutions and was a pillar of strength for Tammany’s Tweed Ring. (In 1856, William B. Astor, heir to John Jacob Astor’s furs, opium, and real estate fortune, which also had benefited greatly from Tammany’s peregrinations, was an endorser of the corrupt Tammany politician, New York Mayor Fernando Wood.)19

Belmont was appointed