Chapter 111 Sanxin Company

In July 1932, the Ministry of Finance arranged a plan for the public sale of opium in the Jiangsu market, and the Jiangsu provincial government authorized the public sale of confiscated drugs on September 1 of that year.After negotiating with representatives of the provincial government, Du Yuesheng obtained an opium monopoly on the Shanghai market. Later, at a meeting in Hankou, Du Yuesheng agreed to hand over 3 million yuan directly to the Ministry of Finance in order to obtain government protection for cargo ships coming from Sichuan. The monopoly was extended to the whole country. Du Yuesheng then established a new wholesale company in Nanshi to supply drug retailers in Shanghai.The "Sanxin Company" is said to be paying 200,000 yuan a month to local authorities and other institutions in China.One of the purposes of this sprawling drug-selling scheme was to protect agents.This has two meanings.From a local perspective, the business of Du Yuesheng Sanxin Company is closely related to the corrupt interests of China's municipal political security forces.According to a police report in the British Concession:

Across the country, Du Yuesheng joined Dai Li's forces at the same time and established a "Dayun Company" in Shanghai.The company made a fortune distributing "airline lotteries" and replaced the Sanxin Company as the largest opium dealer.Dai Li's profits from the gambling industry and the drug trade were used to subsidize the activities of secret agents. Meanwhile, Song Ziwen continued to do his best to expand the Nanking government's nationwide monopoly on opium. In January 1933, Song Ziwen, who served as Minister of Finance again, placed the special tax bureau in Hankou under the direct jurisdiction of Chiang Kai-shek's general headquarters. In February, all powers over opium control were handed over to Chiang Kai-shek, Chairman of the Military Commission.In the same year, Chinese authorities seized a large amount of morphine, and the Hankou tax bureau paid more than 16 million yuan in taxes on opium ships.The Kuomintang has begun to regularly send the seized opium to Du Yuesheng to refine heroin.At this time, the special agency of the British Concession discovered that Chiang Kai-shek decided to refine and sell the newly seized morphine, which was said to be used for medical purposes.In fact, "the profits obtained are for the use of the Blue Shirts Club."

The stipulated time for Du Yuesheng to extract morphine and heroin was 6 months.During this time, his processing plant in Nanshi was promised to be fully protected by government authorities.Du Yuesheng saw an opportunity to make a profit -- which could help him raise the huge sums he had promised to pay Chiang to maintain the monopoly.Thinking that he could now deal in drugs without any scruples, he secretly reached an agreement with Zhang Xueming's younger brother, Zhang Xueming, the Tianjin police chief, to transport a large part of the morphine stored by Zhang Xueming in Tianjin to the factory in Nanshi for refining. To replace that part of the supply confiscated by Chiang Kai-shek's men.According to the Shanghai municipal police report, Mayor Wu Tiecheng was paid 10,000 yuan a month "for acquiescing to the scam."

When the six-month period expired, Mayor Wu applied to Chiang Kai-shek for an extension, because the drug market was depressed and the extraction had to be delayed in order to increase their profits.Jiang approved the application, but by Mid-Autumn Festival, he learned of Du's collaborating scam with Zhang Xueming (perhaps from Dai Li). Chiang Kai-shek was already annoyed by criminal circles talking openly about government and underground society collusion in the drug trade.He immediately dispatched a gendarmerie from Nanjing to attack and occupy Du Yuesheng's largest morphine factory in Nanshi, where they seized drugs worth 1.5 million yuan.As soon as word of the raid reached Du Yuesheng, Du put pressure on Wen Jiangang, deputy head of the garrison command, to order the withdrawal of troops.The withdrawal order was stamped with the stamp of Shanghai Mayor General Wu Tiecheng.However, not only did the gendarmerie not withdraw their troops knowingly, but instead stayed there, they also transferred Wu Tiecheng's order to Chiang Kai-shek, who was furious and asked Wu what was going on.The report of the Shanghai municipal police on this incident explained: "The mayor excused himself by saying that he did not know that there was a morphine factory, and that his stamp was usually kept by the adjutant for public use only, and he did not know that someone had used it. As a result, Wen Jiangang He was escorted to Nanjing and finally shot. I don’t know how Mr. Du himself got rid of his responsibility in this turmoil.”

By 1934, the Chinese government's annual revenue from opium exceeded 100 million yuan.The greedy Song Ziwen decided to take advantage of Du Yuesheng's setback and compete with gangsters for control of the Shanghai market.He served as the director of Shanghai's opium control department, and recruited a special team of several hundred elite policemen to realize his bet.He failed, perhaps because Du Yuesheng was willing to take his bet, because it was Chiang Kai-shek's gamble.Soon after, Song Ziwen's opium police force was disbanded, and Chiang Kai-shek's secretary-general, Yang Yongtai, negotiated a new agreement with Du Yuesheng to reopen the morphine factory in Nanshi.Since then, all the refining of drug raw materials from Chongqing and Yichang has been monopolized in the hands of Du's pharmacists.

In the same year, Du Yuesheng continued to rise to the sky. His titles include: Counselor of the General Command of the Sea, Land and Air, Chairman of the Shanghai Local Association, Chairman of Zhonghui Bank, Chairman of the Shanghai Municipal Council, Chairman of the French Concession Taxpaying Chinese Association, Shanghai China Commercial Silk Cotton Trading Co., Ltd. Director of the association, member of the Shanghai Stock Exchange, executive supervisor of the Shanghai Chamber of Commerce, member of the Standing Committee of China Steam Commercial Navigation Company, and chairman of the board of directors of Shenbao, Current Affairs News, Business Daily and News.