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 The Traffic in Narcotics

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United States Commissioner of Narcotics



United States Attorney for the District of New Jersey Former Chairman, Legislative Commission to Study Narcotics, General Assembly of New Jersey







THE PRESENTATION OF A MANY-FACETED SUBJECT SUCH AS THE theme of this study is often best accomplished by supplementing analysis and summary by illustration. The reader can then readily correlate the abstract and theoretic with the actual situation as it is found by those whose administrative concern it is. Documenting the preceding chapter, there will be found here examples of the discussions of the UN Commission of Narcotic Drugs which clearly illustrate the political aspects of the subject. There is also presented A Report of the United States Representative on the UN Commission which factually analyzes and details the present situation in a world area that is of first importance in any study of the narcotics problem.


MAY 5, 1952

The CHAIRMAN recalled that at the previous meeting the USSR representative had made certain comments on the United States Government's annual report, with particular reference to the smuggling of narcotics from North Korea and the People's Republic of China. The United States representative had reserved the right to reply to those comments and had expressed the desire to do so at that meeting. He called on the United States Representative.

Page 69




MR. ANSLINGER (United States of America) submitted to the Commission a report dated 10 March 1952 which had been sent to the United States Government by the Supreme Commander for the Allied Powers in Japan.

According to that report, investigations, arrests and seizures in Japan during 1951 proved conclusively that the Chinese Communists were smuggling heroin into Japan. According to the statements of arrested traffickers, profits from the smuggling were used to finance the activities of the Communist Party and to obtain strategic raw materials. All the heroin seized in Japan came from Communist China; it was brought into the country either through Hong Kong or through North Korea. However, only 50 percent of the heroin seized in 1951 bore an indication of origin.

The total amount of heroin seized in Japan in 1951 was 8.783 kgs. and 2,208 traffickers had been arrested. Of these arrested, 377 were Chinese Communists and 269 North Koreans--- 29.2 percent of the total, although nationals of the People's Republic of China and the Korean People's Republic formed only 2 percent of the total population of Japan.

The heroin seized in Japan was from 83 to 98 percent pure. In the illicit traffic, the price of a bag containing one English pound had risen from $1,861.11 at the beginning of 1951 to $3,611.11 at the end of the year. The price per gram had risen from $9.72 to $27.77, and the retail price paid by addicts was about twenty times higher. At that stage in the retail traffic the purity of the heroin varied between 30 and 70 percent.

The traffic in smuggled heroin had attracted the authorities' attention for the first time at the end of 1947. During 1948, it had increased and in 1949 had attained considerable proportions. In 1950, 1,978 grams of heroin had been seized at Konosaki, on the Japanese coast. It had been brought into Japan by a group of North Korean Communists, with the help of Japanese accomplices. At the same time, 729 grams of heroin bought from a Communist company at Genzan, in North Korea, had been seized at Niigata, also on the coast of Japan. The total of heroin seized in 1950 had been 10 kgs., or three times the amount seized in 1949.

The chief of the Communist Party in Kyushu, implicated in one of the seizures, had said the heroin had been given him by a North Korean called Kyo Son, a member of the central committee of the Communist Party of Rashin (North Korea).

The part played by Kyo Son and the relation between Communist




Party activities and narcotic smuggling had become clear with the arrest of a Japanese called Akira Ito. According to his own statement. Ito at the end of the war joined the army of the People"s Republic of China. In September 1947, while be was a member of the crew of a smuggling ship belonging to a Chinese shipowner, Ito had gone to Japan and delivered secret messages to a member of the central committee of the Communist Party and to a notorious trafficker from Formosa who, when arrested later, was found to be in possession of 8.9 grams of heroin. After being arrested in Tokyo in November, 1947, for armed assault and sentenced to ten months' imprisonment, Ito had escaped and rejoined the Chinese Communist army. He had then been given special political training in China and sent to Rashin in North Korea where, after the outbreak of hostilities, he was put in charge of Communist propaganda. In September, 1950, he had again been sent to Japan to find one of the chiefs of the Chinese Communist Party and bring him back to North Korea. The ship in which he traveled had had a cargo of heroin, opium, and santonin, which had been exchanged for textiles, dynamite, and optical lenses.

On 31 August, 1951, during another voyage to Japan, the ship in which Ito was traveling had discharged thirteen cases at Sanrihama, eight of which contained santonin, and had loaded sixteen cases containing dynamite and fuses.

Replying to the USSR representative's statement at the previous meeting that it was absurd to claim that smuggling of narcotic drugs could be carried on in wartime while the coasts of the People's Republic of China were under a very tight blockade, he said that it seemed as if the USSR representative was unaware of the activities of the smugglers; contrary to what he thought, they found war conditions very favourable. A reference to the cases mentioned in the report of the Supreme Commander for the Allied Powers, which all concerned the traffic in heroin between Communist China and North Korea on the one band and Japan on the other, would confirm that fact. To those cases should be added the large seizure of heroin made at New York on board a Norwegian ship coming from the Far East. The covering of the packages definitely showed that it was of Communist Chinese origin. The case of the traffickers whom agents of the United States Bureau of Narcotics had recently arrested at San Francisco and on whom large quantities of heroin of Hong Kong origin were found might also be mentioned.

The facts mentioned in the SCAP report showed that all the heroin seized in Japan came from Communist China. The heroin seized in




North Korea was of the same type as that seized in Japan, and he referred in that connection to page 27 of document E/CN.7/232/Add.2, which stated that the island of Tsushima was an important relay point in the Smuggling of heroin from North Korea to Japan.

As regards the opium traffic, it should be noted that the Hong Kong authorities had seized large quantities of opium originating in Communist China and that a large amount of raw opium of the same origin had been seized in Thailand.

It was obvious from what he had said that the traffic in narcotic drugs in Communist China was increasing all the time and was a serious menace. The Commission should appeal to the authorities in Hong Kong to increase their vigilance and to governments to intensify the campaign against the illicit traffic.

Mr. ZAKUSOV (Union of Soviet Socialist Republics) said that the United States Representative's statement was intended to divert the Commission's attention from the problem before it-the campaign against the illicit traffic. His speech contained slanderous assertions, intended to make the problem political, and merely took up the accusations of the United States press that Communist China was trafficking in narcotic drugs with Japan and South Korea in order to undermine the morals of United States troops and to obtain funds for the purchase of war material. . . . They (U. S. troops) used poison gases and bacterial warfare to such an extent that the war in Korea had become organized genocide. It could therefore be easily understood why the United States representative made slanderous attacks against the People's Republic of China. He was vainly trying to divert the attention of world public opinion from the horrors committed by the United States Armed Forces.

MR. ANSLINGER (United States of America) said he would raise a point of order if the discussions continued on a plane so far removed from the question of narcotic drugs. The USSR representative had violently attacked the United States Government, which had merely communicated to the Commission accurate, detailed facts, supported by irrefutable proofs, on the traffic in narcotic drugs carried on by Communist China. The USSR representative claimed that the information given was inaccurate, but could not prove that. The Commission was waiting for him to produce statistics, documents and reports proving that his accusations were well founded and stating how the production, manufacture and illicit trade in narcotics in Communist China was organized. Instead of submitting such facts, he had merely tried




to hide the truth under a mixture of half-truths, lies and offensive words. It was not slanderous to state that Communist China was at the present time the biggest source of the illicit traffic in narcotic drugs in the world; it was a true statement, as would be seen from a study of document E/CN.7/234. Moreover, China was not the only country where drugs entered the illicit traffic. When the Commission had studied the reports of other countries where such traffic was being carried on, their representatives had not made insulting remarks. They had merely given all the explanations requested, said what their governments were doing, and described the measures taken to combat the traffic. The USSR representative's attitude showed that he was unable to refute the facts the United States Government had communicated to the Commission.

The CHAIRMAN recognized that the Commission was an international body, in which all representatives had the right to be heard and to explain their governments' points of view, but it was solely a technical organ which, under its terms of reference, should deal exclusively with questions concerning narcotic drugs. If a representative departed from the one subject with which the Commission was competent to deal, he would be obliged to interrupt the debate and call that member to order.

MR. HSIA (China) recalled that on several occasions at previous sessions he had tried to warn the Commission of the danger to humanity of the change in the Chinese authorities' attitude to narcotic drugs. His statements had been interrupted by points of order on the ground that they had nothing to do with the debate. He could give the Commission many interesting details of the way illicit cultivation and export of opium were being carried on officially in Communist China. As soon as the Red armies occupied a sector, the Communist authorities reorganized opium cultivation. They were not concerned with domestic consumption, but were especially interested in discovering foreign markets. Any merchant who wished to export opium had to obtain a permit from the police--- the special trade office--- and thus became a legal shipper of opium. The authorities of the special trade office and all the other authorities gave him the assistance he needed to get rid of his opium by illicit means. Smuggling was carried on mainly over the south-eastern frontier. Motorized junks carried the drug to the ships and loading took place at sea. Opium was not, however, the only substance carried in that officially organized smuggling. A morphine factory had been set up in Western China under the




auspices of the military authorities. It employed two Japanese experts and two hundred workers and produced 300 lbs. of morphine a day, the major part of which was destined for Japan or the Philippines. By thus officially organizing contraband in narcotic drugs the Communist authorities were trying to obtain foreign exchange in order to buy arms and war material. The Commission would realize the extent of the traffic when it knew that one shipment alone had been valued at U.S. $20,000,000.

MRS. MELCHIOR (Poland) was sorry that the question of the representation of the People's Republic of China had been deferred to the next session. It was contrary to all reason that a country with 500 million inhabitants should not be represented on the Commission and thus be able to defend itself against slanderous attacks.

MR. ZAKUSOV (Union of Soviet Socialist Republics) wished to know why the Commission considered his protests against the lying accusations against Communist China as political considerations that were not within its competence, but refrained from applying the same criterion when the representative of Nationalist China accused the Communist Chinese authorities of promoting illicit traffic.

He drew the United States representative's attention to the fact that all his information was drawn from the United States press; if the United States representative challenged the evidence in the United States press, that would indicate that the press was not telling the truth.

The USSR Government had been accused of failing to transmit any information on illicit traffic in narcotic drugs for some time; the Permanent Central Opium Board, however, was in a position to testify that the USSR had transmitted such information, although there might have been some delay since the terminology did not exist in Russian. The charge that the USSR had failed to transmit information had perhaps been made by certain countries where drug addiction was rampant and which were envious of the fact that that evil was non-existent in the USSR.

MR. ANSLINGER (United States of America) recalled that at a previous meeting, the Chinese representative's statement on the official organization of illicit traffic in Communist China had been cut short by a point of order raised by the USSR representative.

In his country the press was completely free; it was not subjected



to any government control and could discharge its duty of informing public opinion without the slightest restraint.

With regard to absence of drug addiction in the USSR, he pointed out that the last prewar report submitted by the USSR in 1937 had mentioned the seizure of several hundred tons of opium for smoking on the Manchurian frontier. That seemed to be a sign that drug addiction did exist in the USSR, unless, of course, the USSR Government did not consider the habit of smoking opium as addiction.

MR. MAY (Permanent Central Opium Board) recalled that the Government of the People's Republic of China had not so far replied to his letter of 6 November, 1951, asking for information on the control of narcotic drugs and of opium in particular.

MR. VAILLE (France) considered that the USSR representative had pushed propaganda rather far when he had said, implicitly but clearly, that the United States had attacked Communist China. He could not let such an accusation pass uncontested since the United States, far from being an aggressor country, had come to the assistance of South Korea when the latter had fallen victim to aggression by Communist forces from North Korea. As long as strong nations felt it their duty to assist weak nations when the latter were attacked, the world would have reason to hope.

The CHAIRMAN reiterated that members of the Commission were entitled to state their point of view on the illicit traffic in narcotic drugs and on respect for the international obligations assumed by governments, provided that they kept within the limits of courteous discussion. The best example of the procedure that should be followed was that of the investigation that had been undertaken in Peru and Bolivia: the Commission had been asked for a scientific opinion and had been able to study the facts freely because its examination had dealt solely with the coca leaf and political considerations had not supervened. The Commission was a technical body, and it was not competent to discuss political questions or to consider the status of governments. He also reminded the Polish representative that the Commission had decided by 10 votes to 3, with 1 abstention, to defer the question of the representation of China to its eighth session. The discussion would therefore be confined to the question of illicit traffic in narcotic drugs. Regardless of who was speaking, any statement which was not to the point would be ruled out of order and any




speaker who failed to comply with the ruling would be interrupted immediately.

MR. SHARMAN (Canada) unreservedly approved the Chairman's ruling. He recalled that a number of states, including Canada, made no attempt to bide the fact that drug addiction was a problem in their country. In Chapter V of its annual report (E/CN.7/232), the Canadian Government had indicated the scope of the problem and had stressed that, because large amounts of heroin were reaching Canada, addiction, which must be considered infectious among criminal psychopaths, was on the increase. In reply to a question, he had explained that the narcotic drugs brought illicitly to Canada came from the same source as those which were smuggled into the United States. His delegation shared the United States representative's views and warmly supported his clear and objective statement.


APRIL 15, 1953

After the debate on May 5, 1952, in this Commission on the situation in relation to the smuggling of narcotic drugs from Communist China, the Russian delegate circulated a statement, document E/2233 dated May 27, 1952, by the Ministry of Foreign Affairs of Communist China. The statement alleges that the report submitted by the representative of the United States Government contained the slanderous assertion that Communist China is engaged in the illegal sale of heroin to Japan, and was a baseless fabrication from start to finish; that from the date of its formation, Communist China has consistently and resolutely pursued a policy of the strictest prohibition of opium and other narcotic drugs.

Instead of giving this Commission a factual report on conditions as other governments have done, the Chinese regime delivered a diatribe of abuse to the Commission for listening to the truth, calling it "malicious slander," "shameless dissemination of lying rumors," intrigue and fabrication and endeavored to shift responsibility for the traffic to other governments.

In view of this challenge, I shall furnish the Commission with additional facts on the situation.




The 1950 organization of the Chinese regime for the sale of opium and other narcotics has been carried over into 1953 with the exception that some of the lesser officials have been changed with the top officials remaining the same as before.

At the time the Communists occupied Shensi the district was barren and unproductive so the Communists depended on the cultivation and sale of opium to finance their vast military administration. As a result the organization for the sale of opium and the Communist financial organization were closely correlated, and in the areas dominated by the Communists the free sale of opium and opium-smoking were acknowledged facts and opium was termed a special item.

As soon as the Communists advanced to Manchuria with the support of the Soviets, they put a stop to the free trade of opium in the areas under their domination, but encouraged such trade in areas controlled by the National Government as a strategem.

When the Communists occupied the whole of China, opium-smoking was prohibited in the land by order of the Communist Administrative Department, but it soon became known that traffic in narcotics would be permitted if it was contrived behind the scenes so those who wished to export opium applied to the government organization controlling special items and received licenses to export opium which amounted to a license to buy and sell opium and heroin.

Tientsin and Canton are the chief opium and heroin export centers in China.

Within the Communist government there is the Opium Prohibition Bureau of the Peoples' Government. Within this Bureau the responsible persons are: Po I Po, Chief of the Finance Division; Yie Chih Chuang, Chief of the Trade Division; and Wang Feng Chi, who as Chief of the Hwapei Opium Prohibition Bureau is the actual person in charge.

The Opium Prohibition Bureau amounts to a government monopoly which, in the Tientsin district, is known as the Yuta Concern which is located at 5, Aomen-lu, 10 Ward, Tientsin. Wang Tsu Chen is the head of this concern, Li Tsu Feng is the managing director, and Sung Ran Chen is an active partner. Wang is a native of Nanking and was formerly a bandit; Li is a leader of bandits of the Tseng Jen Wan clique; and Sung is a famous opium dealer in Tientsin.

The opium business in the Canton district is monopolized by the South China Trade Bureau under the name of "Lin Chi Hang." Wang Jui Feng, a senior Communist leader, is in charge.

In Hankow stockpiling and transportation are carried out by the




Hankow Agency of the Central and Southern District Tobacco Bureau. The person in charge is Lo Wen, Chief of the Accounting Department of the Central and Southern Army District.

The opium stored in the Shihkiachwang Warehouse, with Kuo Hua Yuen in charge, includes the stockpile of opium which was accumulated before the Communists took charge of the government.

The person in charge of the Northern Shensi Warehouse is Kung Liang who is responsible for the planting, harvesting, and processing of opium in the northern Shensi district.

The Jehol Agency, the original name was the Jehol Agency of the Central Tobacco Bureau Superintendent's Office, is beaded by Wu Chih Ho who is in charge of the seeding, harvesting, and processing of opium in the Jehol district.

In Shanghai opium transactions are prohibited, but Chu Yu Lung, who is a public security officer, of the Shanghai district is in charge of the liaison office. His principal job is to negotiate with buyers of opium.

The traffic in narcotics is closely related to other organs of the Communist government. For example, there is a close relation with the Peoples' Bank of China and the Bank of China both of which have local branches throughout the country with special counters to handle loans, extend credit, and handle mortgages for opium. The transportation of opium is guarded by the armed forces. These agencies along with the Tobacco Monopoly are also the organs for handling the transactions in opium. The responsible persons of the Tobacco Monopoly in the various districts have close connections with the big opium dealers. They employ the names of recognized firms for their export business and conduct narcotic transactions under the protection and cover of various subterfuges.

In August of 1950, the following kinds of opium, with the morphine content as shown, were held in the various districts:

















No. 1 Camel





Special Camel





No. I Race Horse





Special Race Horse














Since the quality of opium produced in the northwestern and southwestern districts of China is not uniform and the price varies, Lin Siu Hao who has charge of the laboratory attached to the Shanghai Hygienic Department makes the analysis and decides the standard of opium for export purposes.

Opium is a publicly owned property and the people are not officially permitted to produce, transport, smoke, or sell it privately. Accordingly, all the organs for collecting, purchasing, stockpiling and transporting opium are held exclusively in the hands of the Central Opium Prohibition Bureau. The opium which has, been obtained for export by traders in Tientsin is conveyed to Taku on boats by the troops stationed there. The opium stored in Canton is delivered to Shun Chan by the army and sold there.

When transportation is by boats, sampans are used for further transportation and the cost is usually two yuan for each liang.

The method of concluding contracts in the Canton district is not uniform so traders sign contracts with the Central Trade Bureau in Sui Chou. Sometimes opium is traded for chemicals at the Trade Bureau in South China. At the time of the transaction the two parties sign a contract at the Shen Chou Warehouse and the Communists take charge of the transportation.

The above organizations and Chinese, Korean, and Japanese Communists are presently operating to smuggle heroin into Japan, from which country a portion is transshipped to the United States, not only to obtain dollars and strategic materials but also to sabotage by creating narcotic addiction.

One of the most important officials in the Communist regime who is responsible for supplying heroin to the illicit traffic in Japan is Cheng Lao San, Director of the Opium Prohibition Bureau for the states of Chiang Su, Che Chiang, and An Hui-three states or districts around Shanghai. Cheng is probably the biggest narcotic dealer in the Communist regime and is known as the King of Opium.

Under Cheng there is the following organization as far as Japan is concerned: Li Chin Sui is Cheng's top man in Kobe and Tokyo. The following known Communists in Japan pooled Y5,000,000 and bought a ship in which they sailed from Kobe July 4, 1952: Li Tien Cheng, Kuo Chu Hsiu, Lan Kuo Cheng, Pao Wen Han, Pao Jui Sheng, Liu Kan Lung, and Hsieh Chun Mu. All of them are Chinese.

Since that time only Pao Jui Sheng has been known to return to Japan. He came back to Muroran, Hokkaido, on the Dutch ship Malacca.




This group of Chinese Communists and Li Tien Cheng negotiate directly with Cheng Lao San for narcotics. Li Chin Sui is a fugitive on a narcotic charge in Japan. He and two other Chinese smuggled approximately four pounds of heroin from China to Japan which was seized on the M.S. Hermaline in Kobe in 1951. It is believed 170 pounds were smuggled into Yokohama shortly before the seizure in Kobe, and that this heroin was purchased by Hsieh Chun Mu and Hung En Chu. The latter Chinese and his associate Hsu Yu Fu have been arrested in Japan for trafficking in heroin. Hung and Hsu were both involved in the Hermaline investigation and have the same relationship to Li Chin Sui as Li Tien Cheng, who has recently been arrested in Hong Kong and will be deported.

Cheng Lao San supplied heroin to Shibata Tatsuo, a Japanese who was arrested in Tokyo in April, 1952, when he attempted to sell 720 grams of heroin at the rate of ¥290,000 for 110 grams. The heroin was supplied to this Japanese through Lo Chung Chung who trafficks in heroin under the direction of Cheng Lao San. This heroin was the Red Lion brand. In the early part of 1951 this same brand of heroin which had been smuggled into Japan by air from China was seized in the amount of 676 grams. A further seizure of this Red Lion brand of heroin, which is manufactured in quantity in Tientsin, was made in Kobe July 25, 1952, in the amount of 706 grams with a purity of 89-09 percent. Also on October 6, 1952, in Kobe 1,313 grams of the same Red Lion brand of heroin were seized. This heroin had a purity of 84 percent. In all of these seizures the principals were Chinese. The seizures from China in Kobe although several months apart had packages numbered as follows: In July, 00016 and 00019; in October, 00017, 00018 and 00021. These are Chinese factory numbers.

Chen Kun Yuan, a Chinese living in one of the Mitsui mansions in Hongo Meguro, Tokyo, has a close connection with Cheng Lao San. Chen in 1949-50 shipped large quantities of heroin to Tokyo. He became wealthy from this nefarious traffic and in 1951 set himself up in the lacquer business in Tokyo. just before Chen moved to Tokyo he shipped 40 pounds of heroin to Tokyo by air, and in June 1952 is reported to have shipped 120 pounds of heroin to Tokyo in one-half pound rubberized bags. In each shipment several one-half pound packages were included, and Chen is reported to have paid the pilot of the aircraft ¥200,000 in each case of shipment for taking the heroin in as his own luggage and for making the delivery in Meguro Ward, Tokyo.

This same Chen was a ringleader of narcotic traffickers in Central




China during World War II, and was arrested in Szechwan Province, China, at which time his property was confiscated. Under the Communist regime in China he again trafficked in heroin and amassed millions in two years. Among his followers are a Korean who has charge of transporting raw opium from Korea and Soviet Russia; a Chinese by the name of Chang Liang Tung who is taking care of Chen's illicit narcotic interests in Tientsin and Shanghai; and another Chinese, Tao Tsing Kang, who is engaged in smuggling heroin. After processing the opium, this group smuggled heroin to Singapore, Japan, and parts of China. About one half of their heroin is reported reaching Japan.

Although Li Chin Sui is not known as a Communist, he is boss of the Chinese underground in Japan and has collected large sums of money which he has turned over to the Communist regime of China. In southern China, the exact location is not known, the Ministry of Trade and Commerce has a branch office and Li Chin Sui has a company by the name of Tung Yung Trading Company which really functions as a branch office of this Ministry and handles medical supplies and other strategic materials for the Communist regime of China.

The above-mentioned Liu Kan Lung is closely associated with the sons of the notorious trafficker in narcotics, Li Sui Sen, a Chinese who was arrested on a narcotic charge in Yokohama in October, 1951. One of Li's sons lives in Shanghai, while three more sons live in other parts of Communist China.

Hsieh Chun Mu, the narcotic trafficker mentioned above was closely associated with Kaji Wataru and Mitsuhashi Masao, military spies and Communists about whom there has recently been so much publicity.

In the Atsugi-Gotemba area, Communists, both Korean and Chinese, with the Koreans outnumbering the Chinese, are using street girls to sell heroin to American military personnel. The Koreans and Chinese have taken over the narcotic traffic around the military bases which have been divided as follows: Sasebo, Chinese; Chitose, Koreans; Asaka, Koreans; Kokura, Chinese and Koreans.

Out of a total of 1,494 narcotic violators arrested in Japan from January through November, 1952, 24.6 percent were Chinese and 16.8 percent were Koreans. Thus this element of the population, less than two percent of the total, accounted for more than 41 percent of the narcotic violators. Narcotic agents arrested 52.2 percent of the violators, while the police and customs arrested 39.4 percent. The remaining arrests were made as a result of cooperation between enforcement agencies. A total of 7,843 grams of heroin and 1,827 grams of raw opium were seized during the eleven months period.




In Yokohama is located what is considered the most active group of Chinese narcotic smugglers in Japan since they are reported to be operating regular smuggling ships, complete with false bottoms, for the purpose of carrying heroin and gold from China in exchange for platinum, American dollars, and other strategic materials. In this group of known Communists are: Wu Hua Kuo who has been arrested on charges of smuggling and bribing customs officials; Yang Wen Ting who is connected with a trading company and who was arrested in 1949 on a smuggling charge; Wang Chung I, Wu Kao Ming, and Chen Jen Chi, all so-called traders. Associated with this group was the trafficker, Hsieh Chun Wu, mentioned above who smuggled himself out of Japan and is now living in Peiping. His family followed him on October 11, 1952. Also in this group of Communists are Pi Lei Kuang, Chien Ta Ming, and Liang Pei Hua. The latter is in charge of the Kanto area (Tokyo Plain) for carrying out directives from Red China, and is reported to have received money and heroin from a Lo Chung Chung, mentioned previously as a lieutenant of Cheng Lao San. This Lo used to obtain heroin and entrust it to merchant seamen to bring to Japan. When the ships arrived, Lo would drive to the wharf to receive the heroin.

The information with respect to the previous paragraph came to light when a day laborer in Yokohama was arrested and interrogated. This laborer, a certain Saito, signed on one of the ships of the smuggling group in Yokohama in December, 1950, at Yutsubo and arrived at Reisui, Korea, after three days. The cargo of clothes was discharged and narcotics packed in cartons was taken aboard and later discharged in Shizuoka prefecture, Japan. During this voyage, Saito who was not an addict was tied hand and foot and forcibly given heroin injections until he acquired a craving for the drug.

In January 1951, Saito, who was now an addict, reached one of the smuggling ships lying off the port of Yokohama by small boat. The ship touched at Oita prefecture. After leaving Japan, about 20 boxes of opium, heroin, watches, and revolvers were loaded at another port and the ship sailed for Dairen where she stayed about one week. At Dairen 20 cardboard boxes of heroin were taken aboard. The ship then sailed for Japan and discharged 10 boxes of narcotics and revolvers near Hirado Island, Nagasaki prefecture. These boxes were, addressed to the Kyushu and Hiroshima Branches of the Japanese Communist Party. The ship then passed through the Japan Sea to, Hakodate, Hokkaido, where 10 boxes were delivered to a Japanese who met the ship by trawler. After this, two boxes were delivered to a




Korean at Matsushima near Sendai, Japan. Late in January the ship returned to Yokohama where the followers of Wu Hua Kuo came out in a small boat and received 10 boxes. The boxes were put in American military vehicles and hidden in wheat in a lumber room in the back yard of Wu.

Saito left Japan again soon afterward on the same ship. The ship carried 500 tires, 100 cases of beer and 100 cases of Suntory whiskey, and arrived in Shanghai in about one week. The cargo was handed over to Red soldiers who provided documents and the ship sailed for a certain destination where provisions, cakes, crude rubber, and narcotics were loaded. The ship then returned to Shanghai where the cakes were discharged, and then to Dairen where 30 cases of narcotics and revolvers were taken aboard. The next port was Vladivostok where nine Japanese left the ship. Later, off the coast of Chiba prefecture, the revolvers and narcotics were delivered to eight or nine Japanese who came out in a small boat, and the ship returned to Yokohama. More than 20 persons, mostly Chinese, listed in the day laborer's statement are known narcotic violators, and Saito was able to identify photographs of these people.

Among the more important cases which can be traced directly to Communist China are the following:

Seizure in Kobe, July 25, 1952-706 grams of heroin

After the arrest of a Japanese pharmacy owner in Kobe and the seizure of 706 grams of heroin, it was established that Chang Shih Ching, a Chinese male aged thirty-nine had brought the heroin to Kobe from Tokyo and had enlisted the help of the Japanese in disposing of the drug. This heroin was 89-09 percent pure, was manufactured in Tientsin, and bore two Red Lion brand labels.

Seizure in Kobe, July 21, 1952-323 grams of heroin

Narcotic agents negotiated for the purchase of a large quantity of heroin from Sai Sei Ichi, a Korean, and later arrested Sai and Yang Yao Mu, a Chinese aged twenty-seven, in possession of 323 grams of heroin. The heroin was 89 percent pure and was contained in the familiar fabric bags in which large seizures of heroin from China have been made.

Seizure in Yokohama, August 5, 1952-83 grams of heroin

Narcotic agents arrested Wu Chun Sheng, a Chinese aged thirty-seven, after they had seized 83 grams of heroin which Wu had left in




the home of a Japanese friend for safekeeping. Wu is a close associate of known Communists and narcotic traffickers smuggling from Communist China who were reported in 1951. These traffickers included Jo A Ki, a Chinese who has been charged with narcotic violations on three occasions.

Seizure in Yokohama, September 28, 1952-37 grams of heroin

Narcotic agents arrested Peng Lan Hsi, a Chinese aged thirty, in Kawasaki, which is a suburb of Yokohama. Heroin in the amount of 37 grams and cutting equipment were found in the possession of Peng who is the boss of Communists in Tsurumi Ward, Yokohama. Peng had obtained the heroin from the notorious narcotic trafficker in Kobe, Chang Shiu Shin, a Chinese, who was arrested in December, 1952.

Seizure in Tokyo, October 3, 1952-3,413 grams of heroin

The Narcotic Squad of Tokyo Metropolitan Police on October 3, 1952, seized 2,100 grams of heroin, 97 percent pure, in two biscuit tins at Toyko International Airport where it had just arrived by air. Following the seizure two Chinese, Chu Sun Chong and So Tung Chung, were arrested in Tokyo after which narcotic agents seized 1,313 grams of heroin in Kobe from officials of the Chuang Tai Trading Company, a Chinese concern. This heroin was 84 percent pure and was contained in 50-gram packages. Although the Kobe seizure was made on information obtained from the seizure in Tokyo, it is believed the Kobe seizure originated with Wang Wu Ming, a Chinese trafficker who is reported to have brought the heroin to Japan. The Tokyo seizure was to have been received by the Ento Enterprise Company where two Chinese had made elaborate plans and had made four large shipments of heroin from Communist China to Tokyo. Twenty,one such shipments were traced by officials investigating the narcotic seizure. In addition to the Chinese, ten Japanese were arrested in Japan.

All information obtained from extensive investigations shows the heroin in Japan originated from Communist China. Some amounts arrive from Horai, China, between Tsingtao and Tientsin. The Communists use crews of merchant ships, crews and passengers of aircraft, as carriers, as well as their own Communist couriers and agents, to smuggle narcotics.





Opium and heroin reach all parts of South Korea from north of the 38th Parallel. The usual route is via Kangwa Island off the coast near Inchon. Smugglers move down the coast in small boats and deliver the contraband to Communist guerrillas in the central-western part of South Korea in the general area of Kochang. On December 20, 1952, 13.5 pounds of raw opium which had reached South Korea by this route were seized. The opium was being offered at the rate of U.S. $90 per pound.

Heroin which is being seized in Korea is the familiar light tan, coarse, granular heroin which originates in Communist China, being manufactured in Tientsin. The price in South Korea ranges from U.S. $10 to $20 per gram.

Some of this heroin is brought in by political agents who infiltrate across the front lines from North Korea. In other instances the heroin is smuggled in by ship, plane and courier. It is common knowledge in Korea that any trader who cooperates with the Chinese makes tremendous financial gains. One such Korean who was known to have smuggled narcotics with other contraband is reported to have made 10 billion Won.

In 1951, in Pusan there was a group of Koreans who were representatives of a North Korean Trading Company with connections in Mukden and Peiping. These men had limited capital, so they trafficked in heroin to recuperate their fortunes. These trading company representatives now have adequate capital and have built their fortunes on narcotic traffic. Money obtained from the sale of heroin in South Korea finally returns to North Korea and Red China either in the form of dollars or of strategic materials.

When the United Nations forces moved through North Korea in October, 1950, a warehouse of the Ministry of Commerce in Pyongyang contained large quantities of opium and morphine. There were at least 300 boxes of opium weighing from 30 to 50 pounds each, while the morphine in one-pound cans was in a quantity sufficient to fill two or three rooms of approximately 10' x 12'. In Pyongyang it was found the Ministry of Commerce had a factory for processing opium in the same compound in the west part of the city.

All of the non-addict peddlers of heroin in South Korea originally came from North Korea. This is also true of the chemists.

On August 25, 1952, a clandestine laboratory was seized in a room in Pusan. There were 333 grams of heroin of 81.7% purity and smaller




amounts of heroin in process. All the persons arrested in this case had permanent addresses in North Korea, and so far as could be determined all the original narcotics came from North Korea.

The ROK Navy seized 500 grams of heroin from a Communist and were able to prove conclusively that the heroin came from North Korea. This heroin was contained in a metal can with a slip-over top. The container closely resembles the cans in which heroin was purchased from Communist Trading Stores in Genzan, North Korea, in 1949.

The small decks or packages of heroin which can be purchased in Seoul, particularly from Chinese, contain the light tan, coarse-textured heroin which is commonly received from Communist China.


British authorities are making diligent efforts to suppress the traffic from the Chinese mainland.

Li Choy Fat & Company, which includes Li Choy Fat, Li Sui Po, and Kwok Kam Chi, all three of whom are Chinese, were important traffickers in narcotics for several years. Li Choy Fat was formerly of Shanghai and was deported from Hong Kong June 26, 1952.

Li Choy Fat was carrying on his narcotic smuggling full scale. By sea narcotics were moved in vessels ranging from the smallest junk to the biggest commercial liners. Airline and charter planes are also used, and it is reasonably safe to say there is not an airline operating either to or from the colony which has not been used by narcotic smugglers. Late in 1952 it became firmly established that the movement of gold and narcotic smuggling were closely connected and Communist inspired. It was also discovered the same traffickers were shipping strategic war materials to Communist China.

After the deportation of Li Choy Fat, he was sentenced to fifteen years imprisonment in Taipeh for his smuggling activities.

Millard K. Nasholds, a United States citizen, was arrested in Taipeh on a charge of smuggling 26 pounds of heroin which originated in Communist China. He was sentenced to six years' imprisonment and fined U.S. $5,000.

It has been estimated that from 50 to 100 million dollars of gold were smuggled during a two-year period by individual couriers. To estimate the amount of gold and narcotics being smuggled by all means available it is necessary to realize that on occasions the entire crew of certain ships is involved, that the heroin so smuggled supplies a large part of the international




knowledge of these operations including the crews of ships is afraid to divulge the information because of fear of reprisals against members of the family who are in Communist China.

Li Sui Po, the Chinese mentioned above as being part of the Li Choy Fat & Company, was formerly of Shanghai where he was closely associated with Wu Sze Pau, a Chinese who operated from 76 Jessfield Road, Shanghai. This area became known as the Badlands and reeked with narcotics. Wu and Li were the top gangsters of Shanghai and after the death of Wu, Li Sui Po and the wife of Wu Sze Pau teamed up. Sze Oi Chan, (maiden name of the wife of Wu Sze Pau) was reported to have been directly responsible for many shootings in Shanghai, including the shooting of a policeman who stopped her car from crashing a police barricade.

Li Sui Po and Sze Oi Chan late in 1947 began to operate on intimate terms with Li Choy Fat. On September 9, 1952 Sze Oi Chan (aliases Shee So Chun, Yuen Yuk Ying, Mrs. Wu Yen and Yung Mai Kwong) was arrested after she had sold 25 ounces of heroin through a dance girl for H.K. $9,000. This heroin was marked in the same manner as the heroin mentioned above which was seized in Japan. The package bore the Chinese factory number 00040.

Li Sui Po and Sze Oi Chan sold the Red Lion brand of heroin from Communist China and, although practically destitute in 1947, were wealthy when they were deported in 1952. Since that time the wife of Li Sui Po, who operated a retail clothing store as a front, has been arrested for trafficking in heroin and is facing deportation from Hong Kong.

The third Chinese in the Li Choy Fat & Company was Kwok Kam Chi, a Chiu Chow man from Fukien Province. In addition to smuggling of opium and heroin from Communist China, Kwok was using a ten-room isolated house to process heroin from opium until raided by Police in December 1952 after which time Kwok was banished from the colony. With reference to Kwok the Chi Yin Daily News, Hong Kong, October 18, 1952, carried the following article: "The Chinese Communists have concentrated all the opium from different parts of the mainland at South China for sale abroad so as to obtain foreign exchange. The sale at two certain places has been greatly increased and at the same time organizations have been established in Kwangtung and Kwangsi provinces to undertake the transport of narcotics and work in collusion with traitorous merchants overseas. The details and intrigue were exposed in detail July 7, 1952, and since that time the authorities have paid special attention and for the past three




months have exerted great effort in their investigations. It is understood Kwok and a number of other traffickers have left for Japan within the past two months."

In the Transportation Section of the Tin Shing Company the person who was in charge was Chan Shan Yuk, who was the manager of the Chan Brothers Company and of the Sun Hoi Tung Shipping Company. On December 14, 1952, Chan Shan Yuk and nine other Chinese were charged on a piracy count in an attempt to seize the SS Nidar, bound for Japan, and deliver it to the Communists at Canton. Chan Shan Yuk had successfully pirated a ship and delivered it to the Communists some six months previous to the above incident.

Associated with Chan Shan Yuk in the Chan Brothers Company was Judah I. Ezra who was deported from the United States after serving a term of imprisonment after a conviction for narcotic smuggling.

The China Syndicate and Company, late in 1952, offered to deliver 200 tons of opium from Communist China to a broker, L. Y. Gob and Sons, Bangkok, Thailand, on behalf of what was found to be a nonexistent Swiss firm. When approached with reference to large quantities of opium, officials of the China Syndicate and Company stated they could furnish "tons and tons" of opium from stockpiles in Canton. They also stated the opium would be available at Shum Chan, a town in Communist China just across the line from the Hong Kong colony, from which place they would move the opium and deliver it to a ship. The price quoted was U.S. $12.50 per pound. Before opium or heroin will be delivered in quantity the buyer must put his money in escrow in a bank and the seller is likewise represented by a bank. When the purchase is to be consummated the buyer and seller arrange for the delivery of the narcotics after which the money is collected from the bank by the seller. China Syndicate officials also offered 200 taels of smoking opium and produced samples. They also stated they would sell any amount of heroin and suggested materials rather than money be provided for payment.

Late in 1952, British authorities in Hong Kong seized 231 ounces of crude morphine which arrived from Bangkok aboard a surface vessel. Shortly before the seizure the narcotics were transferred to a sampan. The morphine originated in Yunnan Province.

The latest seizure in Hong Kong was on February 7, 1953, at which time 26 ounces of heroin were seized from Li Wan, a Chinese, and his two Chinese associates.




Related News Dispatches

The following dispatch appeared in Hsing Tao Ph Pao, independent newspaper, Hong Kong, December 28, 1952:

"(Dispatch from Canton) In order to earn more foreign exchange the Chinese Communists are continuing to export opium and other an native produce to foreign countries. It was mainly for this purpose that the Chinese Peoples Aviation Company inaugurated a regular passenger-freight service from Chungking to Kunming to Canton via Nanning. A plane brought 25 cases (of about 62 catties each) of raw opium from Kunming to Canton on the afternoon of December 20. It is said that the opium will be exported to a nearby foreign area." [Note: 1 cattie equals 1 1/3 pounds.]

The following item taken from the Hua Chiao Jih Pao, conservative newspaper, Hong Kong, February 19, 1953, further substantiates the position of Macao in the traffic of narcotics with Communist China:

"(Dispatch from Swatow) Since the fall of the Teochew-Swatow area into Communist hands over three Years ago, peasants living in Kityang and Puning hsien in the area, encouraged by the Communist authorities, have planted opium poppies extensively every year in October, providing the biggest source of revenue for the Communists. Last year poppy planters in Kityang and Puning alone sold a total of over 210,000 taels of raw opium to the Communist Teochew-Swatow Trading Company which made big profits by smuggling the drug to Hong Kong and Macao for sale. According to an unconfirmed report, about 80,000 mow of opium poppies were planted in October last year in the two hsien of Kityang and Puning alone. No wonder the Communist authorities here are paying a great deal of attention to taxing the poppy planters. K'ang Tzu-wen, formerly Vice-Administrative Commissioner for the Teochew-Swatow area, has recently got himself appointed to the post of Chairman of the Board of Directors of the Teocbew-Swatow Trading Company so that he may have a finger in the pie.

"Before the planting season for opium poppies began last year, Communist Peoples Bank and Trading Company officials in various hsien in the Teochew-Swatow area had already advanced huge sums of money to the planters, most of whom agreed to sell their produce to the Communists in advance at a price determined by the latter.

Another dispatch concerning Hong Kong and Macao's relation to Communist China in the narcotic traffic is that found in the Kung Shang Jih Pao, Hong Kong, October 16, 1952:



"(Dispatch from Canton, October 15) Four hundred and fifty cases of raw opium arrived in Canton from Yunnan Province on October 4, 1952. The cases of opium, all of which were sealed by the Provincial Peoples Government of Yunnan, were consigned to a certain firm in Yat Tak Chung Lu, Canton. It was learned that this firm is owned by Ch'en Keng and a certain Yang who is Ch'en Keng's personal representative in Canton. It is also learned the opium was intended for Hong Kong and Macao."

That opium continues to be available for the international traffic is due to the encouragement offered growers by the Chinese Communists as shown by the following dispatch:

"The 8th moon of the lunar calendar is the time for the planting of the poppy, and the Chinese Communist authorities are taking into consideration conditions in various areas in fixing tax tariffs on poppies cultivated. The Kwangtung Communist leader, Yeh Chien-ying, on September 3 issued secret instructions to authorities in the various hsien and municipalities in the province to the effect that since the prohibition of poppy cultivation could not be fully enforced in the remote and hilly areas, they might as well enforce the policy of seeking prohibition through taxation so that the people would be made to abandon poppy cultivation voluntarily.

"The taxation rate of 280 catties of grain for every 100 poppy plants cultivated was fixed, and tax evasions would be severely punished. The news amounted to the lifting of the ban on poppy cultivation, and peasants in various parts of Kwangtung were elated.

"In the scores of hsiang in the suburbs of Canton, it was stated that all the dry fields would be devoted to poppy cultivation since it brought a greater yield than rice cultivation." (This dispatch is from the Hsing Tao Jih Pao, Hong Kong, September 10, 1952.)

Yunnanese opium smugglers into Thailand are often better armed than the police themselves. On one occasion there was a group of one hundred of these smugglers that attacked the police in September, 1952, about 100 miles north of Chiengmai. On another occasion about, the same time the smugglers and police fought it out at a point only fifteen miles north of Chiengmai. Prior to this incident on August 28, 1952, a band of the Yunnanese opium smugglers stopped a Chiengmai-bound bus and forced it to wait almost an hour while a caravan of approximately 200 opium carriers crossed the road.

An Associated Press dispatch from Taipeh January 26, 1953 suggests the magnitude of the narcotic smuggling operation by the Chinese Communists:




"The Tatao News Agency, recognized publicity medium for the Chinese Nationalist Ministry of the Interior today alleged that the Chinese Reds were selling huge amounts of narcotics to Southeast Asia and used the proceeds to initiate communist activities. The Agency, which claims to get its information from underground sources on the mainland, said that 1,500,000 ounces of opium and other narcotics had been shipped to the countries of Southeast Asia from the South China province of Kwangse since it was overrun by the Reds in 1949."


Illicit opium and heroin in the Philippines come from Communist China. These narcotics arrive by surface ships and by air. The heroin has the same physical characteristics as the heroin which has been proved to originate in Communist China.

Large scale smuggling into the Philippines from Communist China was disclosed on October 21, 1952, in Manila following the arrest of two Chinese by the police. Arrested and charged with violation of the opium law and facing possible deportation, if found guilty, were Jose Lao Ko Kua, thirty, and Tio Eng Tiong, fifty-four.


That opium from Communist China reaches Malaya in large quantities is shown by the seizure on the Burmese vessel Hswe Hla Min at Pulau Paya June 8, 1952. The vessel carried 5,789 pounds of opium, 353 pounds of grey drugs containing morphine, and 25 pounds of brown powder containing morphine. The opium was traced to Communist China and had passed through the Shan States of northern Burma. The group conducting the bartering, buying and selling of the narcotics with Communist China had its headquarters in Rangoon, and the operation was financed from Penang and Singapore. These smugglers had been operating for a considerable period of time and the seizure was the ninth or tenth of a regular series of shipments of opium and other narcotics. It is estimated this group had been responsible for at least 30 tons of opium being smuggled from Communist China in a year.


As already stated, large quantities of heroin have reached the United States from Communist China. Emissaries have been sent to the United States to arrange for the details of the smuggling transaction.




One of the principals in a case in which at least 200 ounces of heroin were smuggled in from Communist China is now serving a tenyear imprisonment sentence. In another case which is still under investigation and in which at least 260 ounces of heroin were smuggled in from Communist China, a defendant has been sentenced to fifteen years imprisonment. In still another case in which an estimated 40 ounces were involved the two defendants were sentenced to five years and to seven years imprisonment. The latest seizure of a comparatively large amount, 36 ounces, was made November 9, 1952 in San Francisco on the S.S. President Wilson. A Chinese had brought the heroin from Hong Kong. It was manufactured in Communist China.


Large quantities of heroin are manufactured in Communist China all the way from Tsingtao, and Tientsin down to Canton. This heroin is of approximately the same percentage of purity, unusually high, and has the same physical characteristics as the heroin from this region over a period of years. In one factory alone in Western China the capacity is 300 pounds per day and all of this is for export.

That the United States is a target of Communist China to be regularly supplied with dollar-earning, health and morale- devastating heroin is shown by the information contained in the following dispatch, the truth of which is borne out by facts previously related in this report:

"(Toa News Service, Hong Kong) In order to cover the expenses required for its fundamental construction for fiscal 1953, Communist China is recently using various means to develop the sources of its central and local revenues. According to reliable information gained from the continent, financial and economic organs of Red China's Central Regime met behind closed doors in Peiping in early December and decided to expand sales activities abroad this year, primarily in Japan, Southeast Asian countries and the United States.

"According to information reaching from Peiping, financial and economic leaders of the Foreign Trade, Commercial and Financial Divisions of the Chinese Communist Regime as well as of the Southwest, South China and North China Districts held a secret meeting in Peiping on December 5. The meeting it says was presided over by Po I Po, Chief of the Finance Division; and attended by Yeh Li Chuang, Chief of the Foreign Trade Division; Yao, I Lin, Vice-Chief of the Commercial Department; Chen Hsi Shih, Vice-Cbairman of the




Southwest Military Political Committee; Liu Hsiu Feng, Chairman of the North China Financial and Economic Committee; Hsiu Hsian, Vice-Chairman of the South China Financial and Economic Committee; and others.

"Information which leaked out of the conference indicates that the revenue obtained from its sales of narcotics abroad for fiscal 1952 reached approximately 70,000,000 American dollars, out of which 30,000,000 dollars were sent to the Chinese Communist Regime and the rest was spent for party activities as well as information collection; that the largest outlet was Southeast Asia countries, followed by Japan and the United States.

"The drugs when shipped directly from the continent are sent via Tientsin and Tangku in the north and Kwangchow Bay and Nampo Island southeast of Yangchiang, Kwangtung Province, in the south. The same report says that crude opium of over 1,000 tons was sent abroad through Kwangchow during the one-year period from June 1951 to June 1952.

"Heretofore the sales abroad of opium and other narcotics were handled directly by the Finance Division of the Chinese Communist Regime. However, it is reported, it was decided at the conference that the sales method would be changed, and that the business would be conducted exclusively by the Overseas Trade Division. Further, the following important decisions were made at the conference:

1. Qualities and grades of narcotics gathered from various districts will be standardized and definite marks will be established. Crude opium, for example, was divided into several grades in the past and this was a factor in the sales thereof. However, under the new system the various sorts of opium will be standardized.

2. Export promotion regulations are established, and private concerns are permitted to participate in the transportation and sale. Moreover discriminatory prices are established so that merchants may be encouraged to sell narcotics abroad more aggressively.

3. Powerful leaders are sent secretly to various places to encourage sales activities, especially in Tokyo, Singapore, Bombay, and other places. For this purpose, the Social Division and the South China Bureau of the Chinese Communist Regime have decided to select and send those most experienced in selling narcotics and to place them in charge of promoting sales.




4. Each local organ of the Communist China Regime is prohibited from wantonly sending large quantities of narcotics overseas for sale for fear it may affect the overseas market. However, each such local organ is permitted to derive 20% of its income from the sales of narcotics.

"According to the Peiping information, Communist China's activities to smuggle narcotics into the Japan area are conducted under the Tientsin Office of the Overseas Trade Division. There are at present approximately forty smugglers in the Tientsin area who sail from Tangku to the vicinity of Kyushu and return carrying cargoes of gasoline, steel ingots, automobile parts, medical instruments, and other material. It is clear that non-Chinese are also participating in the smuggling organization."

(The preceding was published in the Tokyo Shimbun, January 8, 1953.)

The smuggling of gold from Saigon and Bangkok, which is obtained from Europe on letters of credit which are paid in foreign exchange within one week after receipt of the gold, the exchange of the gold with Communist China for narcotics and other high-value exports which in turn are sold to obtain foreign exchange to pay for the original letters of credit, is the explanation which most nearly fits the actual conditions prevailing in the Far East. The foreign exchange is supplied from all countries to which the narcotics are destined.


Seizures during 1952 which may be attributed to Communist China are as follows:

Hong Kong

Raw opium

935 kgs.


Morphine hydrochloride

5 kgs.

via Bangkok


Raw opium

950 kgs.


Morphine hydro-chloride

4 kgs.

via Bangkok


Raw opium

3879 kgs.


Morphine alkaloids

180 kgs.




1 kg.



Raw opium

2 kgs.



11.8 kgs.




Seizures (continued)


Prepared opium

.224 kgs.

via Hong Kong

United States


1.7 kgs.

In magazines from Hong Kong



.096 kgs.

At Wilmington from crew member of S.S. President Jefferson, from Hong Kong



7.843 kgs.


Raw opium

1.827 kgs.


(NOTE: In addition to the above a considerable amount of heroin has been seized by Hong Kong authorities in 25-ounce lots. These seizures would total at least three kilograms)




While Communist China has denied the allegation that she is supplying a large part of the narcotics in the international illicit traffic, and has stated that in fact a strict control has been placed on narcotics, the above portion of this report and the following extracts and dispatches from newspapers and documents show: that traffic in narcotics has been encouraged for monetary reasons and sabotage; that cultivation of the poppy plant has not been prohibited; and that efforts to control addiction within Communist China have been feeble and ineffectual since the authorities, realizing the terrible and lasting scars on any civilization which widespread addiction guarantees, have relied on fanning the fanaticism of communism to encourage abstention from narcotics, have taken at face value declarations from addicts that they were "cured" even while unofficially these addicts were still receiving narcotics, and have from all indications created a staggering incidence of addiction within Communist China. There can be little doubt of the true purposes of Communist China in the organized sale of narcotics. These purposes include monetary gain, financing political activities in various countries, and sabotage. The Communists have planned well and know a well-trained soldier becomes a liability and a security risk from the moment be first takes a shot of heroin.




The following throw considerable light on the true situation in Communist China:

An editorial in the South China Morning Post, Hong Kong, July 7, 1952, remarks as follows:

"Peking declared these stories were fabrications and insisted that it has 'consistently and determinedly adopted as well as enforced the policy of strict prohibition.' The pro-Nationalist newspapers here recently asserted that poppies were planted in many parts of Kwangtung and that the new authorities like the old were content to tax it heavily rather than enforce the ban. On the other hand the pro-Communist papers say the Regime has made 'definite progress in suppression' since the Suppression Commission was formed in Canton in 1950. It added however that though the peasants had agreed not to plant the poppy, it was necessary that 'the suppression movement must be continued and made into a mass movement for thorough realization.' This indicates that the ban is not effective. But it is significant that when the authorities seized off Penang a single consignment of 6,000 pounds of opium--- half the total world seizures last year--- it was described as 'Burmese opium.' "

Another dispatch from the Hua Chio Jih Pao, Hong Kong, October 22, 1952, is as follows:

"The Chinese Communist authorities appear to be pushing with great vigor the campaign for the suppression of opium in the various hsien on Hainan Island and in southern Kwangtung. Actually the addicts are required to be cured in stages and meantime opium is sold by the authorities to smokers who have been duly registered."

All available reports from the mainland press clearly indicate continued use of and traffic in narcotic drugs within Communist China. The Communists have carefully avoided mention of traffic out of Communist China, but the Nan Fang Jih Pao, Canton, editorial of June 3, 1952, stressed the fact that Canton's proximity to Hong Kong, Macao, and Indo-China facilitated drug smuggling, and added that Canton continued to be the principal center of narcotic traffic in Asia.

On May 19, 1952, the Hankow Ch'ang Chiang Jih Pao carried an article covering a meeting of the Opium and Narcotics Suppression Committee on May 13-16. The chairman of the Committee, Chang Nan Hsien, stressed the need of a mass movement for the suppression of opium and narcotics. The vice chairman followed by analyzing the causes leading to the situation being still serious. He pointed out the failure of the full mobilization of the masses and reliance on them for wiping out the evil. He said the mass movement to be launched beginning




with the prohibition of transportation, the prohibition of preparation, and the prohibition of marketing, after which the prohibition of poppy cultivation and smoking and use of narcotics would be easy of accomplishment. Cheng Shao Wen was the official who made this statement.

On June 4, 1952 the same newspaper carried a report by this same vice chairman of the Committee, Cheng Shao Wen. After stating that the prohibition of poppy cultivation had been "basically accomplished in the Central-South region," he gave a resumé which indicates the extent of narcotic traffic within Communist China. In the districts of Honan, Changsha, Liuchow, Nanning, Kwelin, Wuchow, Ichang, Shasih and Yuanling, Cheng Shao Wen stated that more than 18,000 cases of opium trafficking had been disposed of, 2 million taels of opium had been seized and several thousand taels of heroin had also been seized.

In Canton, Cheng continued, from the time the Communists took over until March, 1952, there were 271 cases of opium traffic and manufacture disposed of, 3,943 opium dens were discovered, 7,267 addicts were arrested, and 2,000 taels of opium, 200 taels of morphine, and 300 taels of heroin were seized. He added that of the 5,723 addicts registered in Canton 90 percent had been cured and in a part of Hunan province where 90 percent of the households were opium smoking and 80-90 percent were addicts, in two years the number of addicts was reduced to 3.5 percent and the number of opium smoking households to about 11 percent.

In suggesting that the opium evil is still rampant and suppression must be resolutely carried out Cheng stated "opium and narcotics have been chiefly imported from abroad to the Central-South region." He made this further statement: "When nobody engages himself in opium traffic, poppy growers will not be able to sell their products and will cease to grow poppies. When no opium can be bought, the addicts will certainly cease to smoke opium."

In the Nan Fang Jih Pao, Canton, June 3, 1952, Ku Kuan Hsien, vice chairman, Canton Municipal Committee for Suppression of Opium and Narcotics, stated: "The suppression of opium and narcotic trafficking and manufacturing was carried out together with the suppression of poppy cultivation and the smoking of opium, but this had not been carried out on an organized basis and achievements have not been marked."

Here we have the words of Chinese Communist newspapers in




contrast to their Foreign Minister's statement that our report is fabrication.

Further statements made by Cheng Shao Wen as published in the June 4, 1952, issue of the Hankow Ch'ang Chiang Pao, are:

"The opium evil is still rampant, especially opium trafficking. A number of unscrupulous merchants such as Ho Hung Fu have smuggled opium to poison the people and destroy the fatherland with a view to profiteering. Since the liberation, narcotic smugglers have smuggled narcotics through the various railways of the Hengyang Railway Administration amounting to 804,879 taels of opium, 109,414 taels of morphine, and 35,297 taels of heroin which have been distributed to 297 merchants in the cities along the railway lines of the Chengchow Railway Administration. In the past three years a total of 38,028 taels of opium and 13,475 taels of heroin have been smuggled and transported through railway lines.

"During the 5-anti movement in Hankow, according to data and materials from denunciation and frank exposures by the merchants, there were 451 traffickers and smugglers who had smuggled and transported 559,421 taels of opium, 278,731 taels of morphia, and 302,540 taels of heroin. During the 5-anti movement in Nanning, according to data and materials from denunciations and frank exposures, of the 32 categories of trade, 459 firms smuggled and transported a total of more than 800,000 taels of narcotics. As the quantity of narcotics smuggled was so great there must be a large number of addicts. According to estimates of the Department of Public Security of the Central-South MAC there are 81,300 addicts in Honan Province, constituting approximately 27 percent of the population.

In the Canton Nan Fang Jih Pao, June 3, 1952, it was stated:

"The organizations and machineries for the suppression of opium and narcotics have not been established, or are not developed in a wholesale manner. Too great leniency has been adopted in the disposal of drug cases." The following statement is also made: "The traffickers used Canton as the center to distribute the drugs to leading cities in the Southwest, Central-South, East China and North-West regions. Many of the unscrupulous merchants have colluded with corrupt elements in shipping, railway and highway organs to carry out the evil traffic. They have even bribed some of the retained personnel in the organs of public security, tax revenue and maritime customs to harbor them. The data and materials exposed through the 3-anti and 5-anti movements have evidently shown that this situation is prevalent in large cities, as well as in medium and small cities. The amount of




narcotics smuggled each time has been estimated at more than 1,000 taels, and even as much as from 40,000-100,000 taels. The narcotic 'king' even dared to sneak into Canton to make arrangements for his narcotic traffic. The use of opium and narcotics is still being constantly discovered in cities."

These lesser officials must indeed be naive to make such statements when the Communist Government of China is doing everything possible to cultivate and encourage traffic in narcotics, at least outside China, with China.

Against all the evidence contained herein the statements of the Ministry of Foreign Affairs of the Chinese Communist Regime, as published in United Nations Document E/2233, May 27, 1952, that "the sale of opium and other narcotics is thus completely illegal in Communist China" and "the Chinese Communist Regime, together with the whole Chinese people, protests in the strongest terms against the lying report directed against Communist China by the representative of the United States Government" have little weight indeed.

The evidence for 1952 is in and prior years, is irrefutable.


YORK, APRIL 14 AND 15, 1953

MR. ZONOV (Union of Soviet Socialist Republics) said that his statement at the previous meeting had evidently been misunderstood by the French representative. He wished to make it clear that, in referring to accusations brought against the People's Republic of China, be had had in mind political accusations against a specific country and government and not individual violations of narcotics regulations.

He failed to understand the assertion which the United States representative had made at the same meeting that the USSR had not submitted a report for the year 1952. The USSR invariably submitted an Annual Report, which always included information relating to chapter V. [Here and elsewhere reference to the chapter is to the Annual Report of the individual country wherein the same subject matter is treated in the same chapter as a uniform pattern for all Reports.]

At the invitation of the Chairman, Mr. Devakul (Observer for Thailand) took a seat at the Commission table.




The CHAIRMAN welcomed the observer for Thailand and recalled the invitation the Commission had extended to the Government of Thailand at the beginning of the session to be represented at the conference table during the discussion of item 8 of its agenda--- abolition of opium smoking in the Far East.

In reply to MR. VAILLE (France) and MR. OR (Turkey), MR. DEVAKUL, (Thailand) said that opium was not cultivated in Thailand except in the north of the country where, as in neighboring countries, control was difficult.

MR. ANSLINGER (United States of America) pointed out that Thailand was the only country which still permitted opium smoking and enquired how supplies of opium were obtained for smoking dens, if neither the cultivation nor the importation of opium was authorized.

MR. DEVAKUL (Observer for Thailand) replied that, while raw opium was occasionally imported into Thailand, the supplies for smoking dens were mainly derived from seizures.

Since many factors which were not purely technical were involved in the situation in Thailand, he felt that a public statement on the matter would be somewhat embarrassing and that it would be more appropriate for the information requested by the United States representative to be obtained through diplomatic channels. As the United States representative was aware, the Government of Thailand was attempting gradually to suppress the traffic in opium. Legislation would not be effective for the purpose and might in fact make the situation worse. The traffic in opium did not originate in Thailand and had increased substantially since the war, a state of affairs to which political conditions in northern Burma and Indochina had contributed.

MR. ANSLINGER (United States of America) proposed that further discussion of the matter should be postponed until the Commission was dealing with item 8 of its agenda relating to the abolition of opium smoking.

It was so decided.

Mr. Devakul (Thailand) withdrew.

The CHAIRMAN commented on the small number of countries which had responded to Economic and Social Council resolution 436 (XIV) C and said that any further replies received by the Secretariat would be submitted to the Commission at its next session.

MR. KRUYSSE (Netherlands) suggested that, in circulating replies from governments, it would be useful if the Secretariat in future reproduced the resolution to which the replies related.




MR. CELINSKI (Secretry of the Commission) said that the Neterhlamds representative's suggestion would be noted.

MR. NIKOLIC (Yugoslavia) enquired why there was no reference to Yugoslavia in chapter II of the document, since to his certain knowledge Yugoslavia had submitted an annual report for 1952.

MR. HUANG (Secretariat) replied that the report for Yugoslavia had been received by the Secretariat on 3 March 1953. It had not been included in chapter II of the document because it had provided no information on chapter V.

MR. ANSLINGER (United States of America) pointed out with reference to chapter III of the document that by far the largest seizure of prepared opium had been reported by Iran. He wondered what the reason for that was.

MR. KIRISHNAMOORTHY (India) and MR. ANSLINGER (United States of America) noted that in three of the cases of the smuggling of raw opium and morphine by air mentioned in chapter V of the document, the aircraft had come from Bangkok. In view of the fact that Thailand neither cultivated nor imported opium, some explanation seemed indicated.

MR. EZZAT (Egypt) drew attention to the statement in paragraph 42 (1) in chapter V that raw opium had, as usual, been smuggled into Egypt from the East. The phrase "as usual" was particularly appropriate, since 95 per cent of the narcotic drugs entering Egypt did so across its eastern borders.

MR. ANSLINGER (United States of America) said with reference to chapter VII clandestine manufacture was extremely important. He congratulated the French Government on its reports on clandestine laboratories which contained all the needed information and hoped that Other governments would emulate the French example..

MR. SHARMAN (Canada) endorsed the United States representative's remarks, adding that under the International Conventions governments had agreed to report on important cases Of illicit traffic. He thought that any case involving a discovery of a clandestine laboratory should be deemed important and reported automatically.

MR. NIKOLIC (Yugoslavia) pointed out that at the previous session the Economic and Social Council, at the recommendation of the Commission had adopted largely at the insistence of the United States representative, a resolution on illicit trafficking by the crews of merchant ships and civil aircraft (436 (XIV)). He wondered, therefore, how to interpret the fact that, according to chapter VIII of document E/CN.7/252, over half of the ships reportedly implicated




in seizures during 1952 were of United States registry. Even more disquieting was the fact that certain ships of United States registry had been mentioned over and over again in the reports. He thought the intention in adopting the resolution (436 (XIV)) had been to ensure that such persons lost their seamen's licenses.

The CHAIRMAN pointed out that under the resolution governments were required to report only on crewmen convicted on or after I January 1953.

MR. ANSLINGER (United States of America) said that the United States had enacted legislation providing penalties of $50 per ounce for the master of any ship involved in the smuggling of narcotic drugs. He pointed out that seizures were often made in ports outside the United States. It would greatly help the fight against the illicit traffic if other countries would adopt penalties as heavy as those imposed in the United States. Before the Second World War certain captains had been fined as much as $750,000 and the shipping companies had cooperated very effectively in eliminating smuggling. Legislation which provided penalties only for drugs found aboard without imposing a fine on the master of the ship was inadequate.

There was no doubt that smuggling by seamen constituted the largest source of drugs for the illicit traffic and in compliance with the Council resolution the United States would submit by 1 July 1953 a lengthy list of seamen convicted on charges of smuggling whose licenses had been revoked. He hoped that other governments would act promptly under the resolution and submit similar lists to the Secretariat as soon as possible for immediate circulation to governments. That was essential to prevent persons convicted in one country from seeking berths on ships of other nationalities.

MR. SHARMAN (Canada) pointed out that the nationality of a ship was not always indicative. For example, the ship of Canadian registry mentioned in chapter VIII was beyond the control of the Canadian Government. It was not manned by Canadians and had not approached Canadian waters for many years but operated in the vicinity of Macao far beyond the limits of Canadian jurisdiction. He assured the Commission that the Canadian Government would very much like to get control of the ship.

MR. NIKOLIC (Yugoslavia) observed that under maritime law a ship was subject to the laws of its country of registry.

The CHAIRMAN said that the Secretary-General had communicated Economic and Social Council resolution (436 (XIV)) to governments and was awaiting their replies.




MR. ANSLINGER (United States of America) suggested that the memorandum on the illicit traffic prepared by the Secretary-General for the Commission's next session should contain a special chapter on smuggling by seamen.

It was so agreed.

The CHAIRMAN proposed that the foregoing discussion should be considered as disposing of item 7 (d) of the agenda.

It was so agreed.

MR. KRUYSSE (Netherlands) said with reference to chapter IX that he had noted with interest that prices for illicit drugs had been quoted per unit of weight which made it possible to make certain comparisons. Of course, as prices were affected by rates of exchange, the figures would have to be interpreted with that in mind. The chapter showed a distinct improvement over the former method of presentation.

MR. EZZAT (Egypt) drew attention to the great difference in the prices of opium and Indian hemp in Israel and in Egypt. In Israel, opium was quoted at approximately $200 to $250 per kilogram and Indian hemp ranged between $330 and $400 whereas in Egypt the price of opium per kilogram ranged from $13,000 to $15,000 while Indian hemp fetched from $900 to $12,000. That reflected the excellent work being accomplished by the Egyptian anti-narcotics administration and the Narcotics Bureau of the Arab League.

MR. SHARMAN (Canada) referring to chapter X said that the Canadian report had mentioned the effectiveness of whippings in deterring certain criminals who had been inducing young people to take drugs and he asked that the paragraph on Canada should be amended to refer to the penalty.

MR. HUANG (Secretariat) said the necessary corrigendum would be issued.

MR. NIKOLIC (Yugoslavia) said it would seem from the report on Hong Kong either that narcotics offenders were subject only to fines or that there had been no offenses in 1952 serious enough to be punished by imprisonment.

MR. HUANG (Secretariat) said that chapter X did not refer to legislation in general but was merely a compilation of the penalties mentioned specifically in the seizure report.

MR. ANSLINGER (United States of America) said he was not satisfied with the penalties imposed in the United States on narcotic drug ,traffickers although they were usually heavier than those imposed




elsewhere. He suggested that the Commission might consider that question when it took up the problem of laws and regulations. It was encouraging to note the United Kingdom report that a sentence of three years had been imposed for the unlawful possession of Indian hemp.

MR. WALKER (United Kingdom) said that that was the highest sentence yet recorded in the United Kingdom for that offense. The court had taken into account the fact that the person concerned was of bad character and had been previously convicted for the same offense. It had also been aware of the social menace of Indian hemp.

MR. EZZAT (Egypt) said that the penalties reported in the paragraph on Egypt had been imposed under the old, comparatively lenient legislation. Decree Law No. 351 promulgated on 25 December 1952 imposed much higher penalties including a maximum sentence of life imprisonment and fines ranging from ŁE 3,000 to 10,000.

MR. SHARMAN (Canada) thought the reports on Hong Kong should be reviewed as it was his impression that prison terms had also been imposed in 1952.

MR. WALKER (United Kingdom) pointed out in connection with Hong Kong that the summary of annual reports of governments for 1951 referred on page 49 to penalties including fines up to $HK 10,000 ($1,750) or imprisonment for terms up to two years, or both and in many cases banishment had been imposed.

MR. HUANG (Secretariat) said that prison terms had been mentioned in the Annual Report for 1951 in conjunction with penalties imposed in Hong Kong.

The CHAIRMAN suggested that the Commission should note the various documents it had considered on the illicit traffic with appreciation, subject to the comments made by the various members during the debate. The question of the illicit traffic in Italy and the Far East was still pending.

MR. ZONOV (Union of Soviet Socialist Republics) pointed out that the Commission had not yet finished with chapters V of Annual Reports for the year 1952 or with the summary of Annual Reports of governments for 1951. He had said at the very outset of the debate that he had a few comments to make on the summary and he wondered when he would be given an opportunity to speak.

MR. WALKER (United Kingdom) suggested that the Commission should postpone taking note of the summary of Annual Reports of governments for 1951 until it had finished its consideration of the item on illicit traffic.




The CHAIRMAN pointed out that at the previous meeting he had specifically called for comments on the summary of Annual Reports Of governments but as no one had asked for the floor he had assumed that the debate was concluded. The Commission could, however, postpone its final action on the various documents until the debate on the illicit traffic had been concluded.

MR. ZONOV (Union Of Soviet Socialist Republics) suggested that the Commission should follow its customary procedure of putting the question to the vote after the debate had been concluded.

MR. ANSLINGER (United States of America) suggested that the most convenient procedure in the circumstances might be to take up the item concerning illicit traffic in Italy at the present meeting, reserving the item on illicit traffic in the Far East for the following one, at which there would be Opportunity for the USSR representative to bring up the points he had in mind.

MR. VAILLE (France) supported the United States proposal.

The United States proposal was adopted unanimously.

* * * * * * *

MR. VAILLE (France) said that the French newspaper France-Soir of 18 March 1953 contained reports concerning attempts to cover up illicit traffic in heroin in Italy, the drug being put on the market, at a low price, as codeine. He doubted the veracity of the reports, which he had compared with those submitted by the Italian Government to the Secretariat, but hoped that the Observer for Italy would have an opportunity of clarifying the situation.

MR. CANAPERIA (Observer for Italy) was glad of the opportunity accorded him to make a statement to the Commission on behalf of the Italian Government. His presence indicated his Government's respect for the Commission and its desire to cooperate in the suppression of illicit traffic.

His Government's main work in that connection was recorded in the various reports which the Commission had recently examined. He thanked the United States representative for his words of appreciation regarding that work. During the last twelve months twenty-nine police operations concerned with illicit traffic had been carried out, leading to the seizure of 22 kilograms of heroin, 1 kg. 650 gr. of opium, 627 grams of cocaine, and some smaller quantities of other drugs. All those responsible were prosecuted in the courts. He felt that those activities were proof of his Government's increased




efforts and a successful contribution to the campaign against the international drug traffic.

Concerning the Schiapparelli case, he stated that the Schiapparelli firm, an old-established Turin firm of pharmaceutical and chemical products, had been granted the authorization to extract and transform alkaloids from opium in 1942. Like all such firms, it was under strict periodical inspection and nothing irregular had been found during the inspections carried out in 1952 and in previous years. Investigations carried out towards the end of 1952 following the discovery of a case of illicit traffic by a wholesaler had disclosed a connection between the proprietor of the firm concerned and Professor Migliardi, technical director and general manager of the Schiapparelli company. A further inspection of the Schiapparelli company at the beginning of 1953 had revealed that a quantity of heroin, estimated by the Financial Police at 350-400 kg., had been manufactured and illegally disposed of by Professor Migliardi since 1948, who, taking advantage of his position, had been able to divert from normal production a quantity of morphine to be transformed illicitly into heroin. Although the initial inquiries had indicated that Professor Migliardi was solely responsible, the operations of the firm had been suspended by the competent authorities; further inquiries had confirmed the exclusive responsibility of Professor Migliardi, who had been prosecuted for the clandestine production of and illegal trafficking in narcotics, and the suspension had therefore been of limited duration. The exact quantity of heroin illegally manufactured was being determined by a commission of technical experts at the request of the judicial authorities. Since the Financial Police's estimate, which had been based on indirect calculations, might have been exaggerated, it was probable that the episode, which had been exploited internationally by rival national firms, would be reduced to more modest proportions. In any event, the Italian Government would take any further action required.

Concerning the Commission's recommendation that the Italian Government should completely prohibit the manufacture of heroin in Italy, he recalled that production had been suspended since July 1951. Stocks at that time had been 78 kilograms, representing approximately a one and a half year's supply for normal consumption, but of that total, 28 kilograms still remained at the present date. Seventeen kilograms of that were held by the military medical authorities and the remaining 11 kilograms were divided in small




quantities among narcotics manufacturers, pharmaceutical firms (for use in the production of medicines), and registered wholesalers. The heroin held by narcotics manufacturers was used exclusively by the National Public Health Department for the direct replenishment of the stocks of hospitals and sanatoria on the basis of periodical and appropriately certified requests. The question of complete prohibition was still under consideration by the Italian Government. As objections had been raised by the medical authorities on the grounds that it was not possible to replace heroin for therapeutical purposes by synthetic products, the question had been placed before the National Council of Health which had then requested further information on the subject. He was confident that at the next WHO Assembly, in May, the Italian Government would be able to give a favorable answer on the subject, but at present it was awaiting the advice of the National Council of Health, which would hold its session on 21 April.

MR. ANSLINGER (United States of America) thanked the Observer for Italy for his information. In view of the large diversion of heroin into the illicit traffic he would like to know what the position of the Schiapparelli firm would be in the future. He understood that another firm had been involved in a drug contravention two years ago but that the court had not yet reached a decision in the case. He was particularly interested in those matters because much of the heroin which entered the illicit market in Italy was later smuggled into the United States. He hoped the Italian Government would give favorable consideration to the complete prohibition of the manufacture of heroin.

MR. CANAPERIA (Observer for Italy) explained that after the second police investigation in the Schiapparelli case, as a result of which Professor Migliardi was found to be the only member of the firm involved, it was not possible, under the law, to maintain the suspension of the firm's activities. He was fully aware of that deficiency in the Italian legislation and said that new legislation was being prepared which would provide for such cases. Concerning the second query, the facts were that court proceedings had been taken against Mr. Calascibetta, a director of the S.A.C.E. firm of wholesalers, for illicit traffic in narcotics and the license of the firm had been revoked.

MR. KRISHNAMOORTHY (India), answering a question raised by the Canadian representative at a previous meeting concerning the seizure of a quantity of opium at Simla, said that the latest information from his Government was that the case was still under trial. If he received




further information before leaving New York he would report it to the Commission.

* * * * * * *

MR. ANSLINGER (United States of America) referred to a case of substantial diversions of narcotic drugs imported into Ecuador on certificates issued by the United States, the United Kingdom, and Switzerland and asked the Secretariat to request the Ecuadorean Government for a seizure report concerning them.

MR. WALKER (United Kingdom) supported the United States representative's request.

The CHAIRMAN said that the Secretariat would take note of the request.

* * * * * * *

MR. VAILLE (France), continuing the previous day's discussion [situation in Italy], asked the Italian Observer for additional information on the Schiapparelli case. He wished to know what quantities of heroin had been diverted, whether Professor Migliardi had been arrested, and whether he had been convicted, and if so, what penalties had been imposed. Furthermore, he was surprised that the firm in question, which had failed to exercise effective control over its staff and the outgo of narcotic drugs, had not been prosecuted. If it was not possible under Italian law to revoke the firm's license, he wondered what methods were followed in Italy with regard to licenses and whether the number of manufacturers in that country would not increase unduly, contrary to the spirit of the conventions.

MR. CANAPERIA (Italy) stated that it was difficult to estimate exactly the quantities of heroin diverted, for they could be established only on the basis of the quantities of reagent used. That was a complicated procedure and the Italian authorities had had to appoint a committee of experts to look into the matter. The first investigation had been made by the fiscal squad of the police who specialized in the field. The members of that squad had some knowledge of the methods of production and extraction but they were not technicians. Consequently, the quantities of heroin diverted could not be definitely established until the results of the inquiry of the committee of experts were available.

In reply to the French representative's second question, he said that Professor Migliardi had not been arrested. He was at present under police surveillance and his passport had been withdrawn.




Under Italian law, a person could not be arrested unless he had been caught in the act. Professor Migliardi would be brought to trial shortly, as soon as the judges were in possession of all the complex facts of the case.

With regard to the granting of licenses, five firms had been authorized to manufacture opium alkaloids, the number having been determined with due regard to the volume of production and consumption of those products in Italy. Licenses were granted in accordance with the provisions of the 1925 Act. The Italian Government had been concerned with the lacunae in that Act and had prepared a new bill which, taking into account the recommendations of the Commission on Narcotic Drugs, provided for more severe penalties and would give the High Commissioner for Hygiene and Public Health the power to withdraw a manufacturing permit if any irregularities were suspected.

MR. ANSLINGER (United States of America) observed that, according to the investigation that had been carried out, Calascibetta had received from Migliardi the large quantity of 875 kg. of heroin, which be had then resold to various traffickers, many of whom had been convicted. It was now two years since Calascibetta had been denounced and the Italian Government had been in possession of evidence against him. He wondered why the trial had bee delayed. He also wished to know whether the firm of Schiapparelli still held a license for the manufacture of heroin.

MR. CANAPERIA (Italy) explained that the first investigation had established that only 350-400 kg. of heroin had been clandestinely manufactured. The figure cited by the United States representative was that appearing in the report on the Calascibetta case, which included quantities of heroin that the accused had procured from other sources. The case had been handed over to the court the previous year. His trial would not take place until the results of the investigation of Migliardi were available, for the authorities intended to have both tried at the same time, as the two cases were connected.

Scbiapparelli's authorization to manufacture heroin had been suspended. There had been no authorized manufacture of heroin in Italy since July 1951. He assured the Commission that the Italian Government exercised strict control over the production of the five firms in question. Two specialist inspectors had been detailed to supervise all operations with regard to drugs, from the stage of manufacture to that of distribution. It had not yet been possible to forbid the consumption of heroin because of the opposition of the medical




profession but the remaining stocks were distributed only in hospitals and sanatoria and it was almost unobtainable in pharmacies.

MR. ANSLINGER (United States of America) said that the heroin estimates submitted by the Italian Government to the Supervisory Body and to the Permanent Central Opium Board from 1946 to 1950 had been 200 kg. per year. That production had probably been divided among different firms. He wondered how Migliardi had been able to divert such large quantities.

Furthermore, the figure of 200 kg. per year was very high compared with the corresponding figures for Switzerland and France. He had the impression that the diversion had been possible because the estimates had been too high.

MR. SHARMAN (Canada) shared the United States representative's view of the Italian estimates. As a member of the Supervisory Body, be was in a position to say that both the Supervisory Body and the Permanent Central Opium Board had been disturbed by that figure, which appeared to be excessive. Annual world consumption being about 400 kg., Italy's estimated consumption had for several years been about half that of the whole world.

Generally speaking, he was concerned about the situation in Italy, where there seemed to be very peculiar ideas with regard to the granting of licenses. The firm of Schiapparelli had not been closed. Its managing director and its technical director seemed to have some share of responsibility for the diversion; in any case, there were certainly others guilty beside Migliardi, since it was unlikely if not impossible that he could operate all by himself. Yet the two directors of the firm had not been indicted.

MR. VAILLE (France) stated that the annual consumption of heroin in France and the French Union was 13 kg. and was tending to decrease. France felt, however, that it was premature to prohibit the use of heroin for medical purposes.

He was surprised at the laxity of Italian courts, which permitted a man like Migliardi, who had put millions of ampoules of heroin into circulation and who was obviously more guilty than a petty trafficker or an addict, to remain at large. The reports submitted by Italy for 1952 showed that there was apparently no question of convictions.

He wished to know whether the firm of Schiapparelli, which no longer manufactured heroin, was manufacturing other drugs, such as codeine or dionine, since in that case further diversions were to be feared.




MR. MAY (Permanent Central Opium Board) shared the views of the preceding speakers. The Italian Government should respect public opinion, which could ill conceive that a man who was responsible for the misfortune of thousands of persons should remain at large and should not yet have been tried.

MR. CANAPERIA (Italy), in reply to the United States representative, stated that although Italy had indeed consumed 200 kg. of heroin in 1946, the annual consumption had since then been reduced to 50 kg. The allocation of raw materials was effected by dividing the quantities of raw opium imported among the five firms, each of which was authorized to manufacture a certain quantity of the various narcotic drugs for therapeutic purposes. The quantities were fixed by the High Commission for Hygiene and Public Health.

Some representatives felt that Italy's production was too high in relation to its population. In that connection, he drew the Commission's attention to document E/OB/8 (page 9), which gave figures showing the consumption of diacetylmorphine per million inhabitants. Italy appeared among the countries with a high consumption, although lower in recent years than that of Finland, Sweden, Australia, and the United Kingdom. The important thing, however, was that since 1951 Italy had reduced its consumption of diacetylmorphine to 50 kg.

In reply to the French representative's remarks, he repeated that under Italian law only those persons could be arrested who had been caught in the act, i.e., who had been found to be in possession of narcotic drugs or against whom there was conclusive proof that they engaged in illicit traffic. That was not the case with Migliardi; in that case there was only circumstantial evidence, based on the difference of the reagents used; but many points remained to be cleared up. That was why the Italian Government had transmitted only a preliminary report to the Secretariat, hoping to be in a position later to transmit a final report.

In his opinion, the aim of the Commission and of the other international organs engaged in combatting illicit traffic was to ensure effective international cooperation in preventing and hindering illicit traffic, since prevention was preferable to suppression. If that were so, it mattered little whether a firm continued to manufacture while the inquiry was in progress. The main thing was to make sure that no quantity of the narcotic drugs produced could be diverted from its proper destination. On behalf of his Government, he formally assured the Commission that the firms were subject to such strict




control that it was no longer possible for a single milligram of narcotic drugs to be diverted. In addition, he emphasized that his country would always be ready to cooperate with the Commission in its work and to follow any suggestions the Commission might wish to make.

MR. ANSLINGER (United States of America) was not satisfied with the explanations of the Italian observer and regretted that Italy's conception of the control of manufacture of narcotic drugs was different from that of other countries.

MR. VAILLE (France) shared the United States representative's view. There could be no permanent control over a firm if the honesty of its directors could not be relied on. A firm holding a license must be above suspicion, for, even when it was, offenses were sometimes committed. In a large enterprise it might well happen that a worker stole a few grams or even kilograms of narcotic drugs, but the diversion of the entire production of a firm by its managers could not be treated lightly. He cited, in that connection, a case which had occurred in France. It had been found that a firm had not furnished accurate accounts of its stocks and, although an investigation had shown that there had been no diversion, the firm's license had been revoked and its directors had been indicted and convicted. He drew attention to the danger of countries not complying strictly with the conventions and not imposing the necessary penalties, for that would encourage the manufacturers and traffickers to move to those countries where they could be assured of impunity.

MR. CANAPERIA (Italy) said that he would certainly transmit the views expressed by the Commission to his Government. The investigation of the case in question was not yet completed and he assured the Commission that his Government would make it its business to send a final report which would undoubtedly satisfy the Commission.

The CHAIRMAN pointed out that the Commission had not finished the consideration of the above chapter [on illicit traffic of document E/NR.1951/Summary]. At the 203rd meeting the USSR representative had submitted a proposal on which the Commission had yet to take a decision. The USSR representative had asked for the deletion of various passages which he felt contained a number of false and slanderous allegations against the People's Republic of China.

At the CHAIRMAN's request, MR.CELINSKI (Secretary of the Commission)




read out the relevant passage of the provisional summary record of the two hundred and third meeting, which ran:

It (the USSR delegation) therefore proposed that all such references should be deleted from E/NR.1951/Summary now before the Commission and that document E/CN.1951/101 should be removed from the records. The same should apply to the references to the smuggling into Japan of heroin alleged to have come from China (page 46 of E/NR.1951/Summary) and to other false statements contained in the sections of the document which summarized the reports on the United States and Hong Kong.

MR. LIANG (China) opposed the USSR representative's proposal for the following five reasons.

The data given in the Chinese Government's Annual Report for 1951 were for the most part based on confidential information collected on the mainland by secret agents of the Chinese Government; the remaining information came from Hong Kong. While be could say no more about how the information was obtained, its authenticity was beyond doubt.

Furthermore, the information furnished by the Chinese Government for 1951 tallied with that provided the preceding year.

Thirdly, it was corroborated by certain facts cited in the reports of other Governments for 1951. In that connection he quoted the sixth paragraph of the summary concerning the United States, which reported the seizure of 627 grams of diacetylmorphine; the bags in which the drug had been concealed had borne the stamp of the Red Lion Company, which showed that the drug had been manufactured on the Chinese mainland. Likewise, in the summary of the Japanese Government's report it was stated that almost all the diacetylmorphine confiscated in Japanese territory had been of Chinese origin. Lastly, he cited a passage concerning Hong Kong, which referred to smuggling from China.

In the fourth place he noted that no one, not even the USSR representative, had been able to prove that the Chinese Government's statements were inaccurate on a single point.

Lastly, he recalled that, as the Canadian representative had acknowledged on several occasions, his Government had been fighting against the illicit traffic in narcotic drugs and the clandestine cultivation of the opium poppy for twenty-five years. To withdraw its report from the files and to give no credence to the information it supplied would be a totally undeserved act of censure.




With regard to that part of the Chinese territory which was under his Government's control, namely Formosa, neither the opium poppy nor Indian hemp were cultivated there. The use of heroin had been prohibited for a long time and traffickers were severely punished.

MR. VAILLE (France) said that he would vote against the USSR proposal because it would imply that the Commission had the right to change at will the texts of reports submitted by governments to the Secretariat. His vote had no political implications whatever.

MR. WALKER (United Kingdom) associated himself with those observations. The Commission was not competent of its own will to change official reports from governments. Anyone who felt that a report contained false allegations was free to prepare another document refuting those accusations and to ask that it should be circulated as an addendum to the report which had been questioned. Needless to say, governments must in turn be careful not to make charges, even by implication, against other countries or territories unless they could substantiate them by solid proof.

He regretted that the USSR representative had described certain information contained in the summary of the report for Hong, Kong as false and slanderous without trying to prove those affirmations. The report spoke of the illicit traffic in opium along the Hong Kong land frontier. The Government of the Colony had simply described an actual situation, which was in no way surprising. It was a known fact that opium smuggling was rife along many frontiers in the Far East. The Government of the Colony had not made the slightest accusation against the Central People's Government of the People's Republic of China. The report did not even say, as it might have said, that more cooperation from the Central People's Government would greatly assist in suppressing illicit traffic in that region.

In conclusion, he said that his Government rejected certain allegations regarding Hong Kong and Singapore contained in the Chinese Nationalist Government's report for 1951. He himself had had inquiry made into some of the facts mentioned in the report and had found numerous inaccuracies. It would take too long to refute point by point the Formosa Government's assertions and to save time he would deal with a few of them only. On pages 4 and 5 of the report much emphasis was placed on labels which supposedly proved that the, opium was of Chinese origin. While those labels bore the well-known marking 1-3-8, that was no guarantee of the contents of the packages. Other opiums were in fact sold under the same label.

The prices referred to in the same part of the report did not correspond




to the usual Hong Kong prices, which were $HK55 per tael (37.8 grams) of opium and $HK8,000 per tael of morphine. The prices quoted in the report were much lower.

Other inaccuracies were to be found in paragraph 4 of page 6 of the report. The remarks about illicit traffic in the Shum-Chun area were not correct. The Ta-ch'ang Company had been dissolved in November 1951 and there had never been any evidence that it had engaged in traffic in narcotic drugs. Most of the persons mentioned in that passage were unknown to the Hong Kong authorities. One of them was known to reside at Macao and not at Hong Kong.

The information given in the Chinese Government's report concerning Singapore also called for the most formal reservations.

By virtue of its situation, Hong Kong was inevitably one of the centers of illicit traffic not only from China but also from Thailand. The authorities of the Colony were among the first to deplore that state of affairs. In cooperation with Japan and the United States, they had made tremendous efforts to suppress the traffic. In any case, the Chinese Nationalist Government had no right to make inaccurate and irresponsible statements which implied criticism of the authorities of certain British territories.

MR. ANSLINGER (United States of America) regretted that the USSR representative was again trying to expurgate reports transmitted by other governments in order to delete any passages which displeased him.

MRS. KOWALCZYK (Poland) recalled that at the 203rd meeting she had given the reasons for her support of the USSR proposal. Nothing had occurred since then to make her change her view; the Kuomintang representative had added nothing new to the discussion. It was clear, therefore, that before it could approve the reports in question the Commission must decide to suppress the slanderous passages.

MR. ZONOV (Union of Soviet Socialist Republics) noted the United Kingdom representative's statement to the effect that the Hong Kong authorities had not intended in their report for 1951 to make any accusations against the Central People's Government of the People's Republic of China. He had also rightly stressed the need for governments to exercise great caution in drafting their reports. Each year the Kuomintang representatives repeated the same slanderous accusations, which, they claimed, were based on secret information. The Commission could not regard reports which rested on such a shaky foundation as reliable. The United Kingdom representative had just




shown how little credence could be placed in document E/NR.1951/ 101. After that statement, there was nothing left of the report.

No one would dream of denying that there was illicit traffic in the Far East. It was scandalous, however, that the Kuomintang clique, which had no right to speak on behalf of the Chinese people, should, in cooperation with the United States and Japan, make accusations against the Government of the People's Republic of China, which was not represented on the Commission and was therefore unable to defend itself.

MR. ANSLINGER (United States of America) pointed out that it had originally been the USSR representative who had introduced a political aspect into the debate. The Commission had heard from the USSR representative propaganda concerning the illicit traffic rather than statements of fact.

With regard to the question of hearing a representative of the Communist Government of China, if all that representative could contribute to the debate was the statement issued by the Ministry of Foreign Affairs (E/2233) which contained little but abuse and vilification, he thought the hearing would not lead to any constructive action. He wondered in fact why that regime had not submitted a factual report to the Commission on the subject if it sincerely wished to contribute to the elimination of the illicit traffic.

The USSR delegation had raised the political issue many years earlier. In fact at the previous session he had been attacked by Communists because of the statement he had then made concerning the illicit traffic in the Far East. All kinds of denunciations and insolent distortions had been made indirectly. They were obviously traceable to the fact that be personally had submitted a factual statement on the subject. He suggested that if the Chinese Communist regime wished to reply to his report, it might take up his statements paragraph by paragraph. That was the usual method of procedure. Charges of slander were not sufficient answer to the facts he had cited.

The CHAIRMAN put to the vote the USSR proposal that the Annual Report of the Chinese Government for 1951 should be removed from, the records and that certain passages concerning China in the summary of Annual Reports should be deleted.

The proposal was rejected by 10 votes to 2, with 2 abstentions.