Crime in Shanghai 1927-1937
Posted to Web Site: 10 May 2002
“My current interests are related to my studies at present, including two history courses - Modern China: Economic and Social change during the Qing dynasty and the history of Chinese in Southeast Asia. I am also doing a Chinese pre-honours course covering a number of disciplines.
“Thus I will pursue these areas for each subject respectively: The relationship between Merchants and Scholar-officials during the Qing period, with a case study on Hankou.
“For my Southeast Asia course I am likely to research something on the Chinese role in the development of secret societies and the spread of vices, otherwise something on the port-city structure; and in Chinese studies: “The implementation of post-1978 agricultural reforms: Top down or bottom-up?”
“I hope to study in China after
completing my degree at UNSW.”
The availability of sources is
therefore limited by both language and location to those of a few authors,
notably Brian G. Martin and Frederic Wakeman, Jr. Therefore the bulk of this essay relies heavily on information
from only a few authors. But these authors and their texts, in my judgement,
have been widely researched and are worthwhile sources in their own right.”
In reality, however, it was a city of opium, vice, and widespread organised crime. Because these criminal elements were not limited by the concessional boundaries (and therefore effective policing), their power was greater than either the foreign concession or the Chinese authorities.
Meanwhile, the Guomindang during this period was progressing towards the establishment of a Nationalist government. Due to its weak political standing, it needed an ally to cement its power in Shanghai. Thus crime became a part of politics in Nationalist-run Shanghai.
This essay aims to demonstrate the criminalisation of the Guomindang political structure by discussing certain aspects of its rule between 1927 in 1937.
Firstly, it looks at the regulation of vice (gambling and prostitution) by the Nanjing regime and it approaches to law and order.
Secondly, it focuses on how crime has functioned with politics, specifically the 1927 Communist purge, the role of opium and attempts to regulate it.
Lastly it examines how crime has
functioned in politics, especially following the events of 1932.
The maintenance of Law and Order was an important issue for the Nationalist government; especially considering Shanghai was not the centre of law and order in China, in fact, quite the opposite.
In 1927 the Nationalists established a Chinese municipality to encompass all settled areas not part of the foreign concessions, under the mayoralty of General Huang Fu. It promised to return law and order to the city, otherwise it would remove the concessions’ extraterritoriality rights, thus placing pressure on those councils and police to enforce the law.
Furthermore, the government saw Shanghai’s problems as a direct result of the foreign presence.
The government also aimed to make city residents feel more pride in their metropolis, especially following the introduction of the “New Life” movement in 1934, by introducing wider police powers giving officers the ability to interfere more in people’s lives – a measure that proved quite unpopular. By trying to control Shanghai, the Guomindang only became more unpopular among the city’s population.
Gambling, a pastime for many in Shanghai was one area that the nationalists found difficult to police and regulate. It varied in scale and scope and continued as such a highly liquid enterprise that its regulation was almost impossible.
For instance, in 1935 the Shanghai Municipal Police (SMP) force stated that around one million dollars was raised from slot machines in the international concession alone and that racing and casinos had a turnover above $1 million a week.
Horse racing began as entertainment for foreigners but proved to be very popular with the Chinese, who by 1929 made up for 95 per cent of the Shanghai Race Club’s revenue. Greyhounds were even more popular since the races were held more often.1
The Chinese Public Security Bureau (PSB) had difficulty regulating gambling across settlement boundaries, even though the SMP initiated several gambling crackdowns. Even so, the PSB appealed to the Nationalist government to pressure the concessional authorities to further control the gambling problem.
A formal protest was made to the British in 1929 about the greyhound tracks. As these protests were mostly ignored, the government decreed, on 8th July 1930, that all greyhound racing was to be banned, thus forcing its operators out of business.
The International Concession took heed, closing the tracks within its boundaries, but the French authorities completely refused to comply, holding firm to their treaty rights. The continuous trickle of bribes from the gangster-run gambling operations also provided incentive to the French to refuse to adhere to the ban.
The campaign of gambling regulation continued, however, until 1932, when it was whole-heatedly abandoned.2
Prostitution, another of Shanghai’s famous vices, was the leading occupation for women in Shanghai during the 1920s and 1930s. It is estimated that in 1920 one in three women in the French concession was a street-worker.
The International Settlement’s by-law 34 gave the Shanghai Municipal Council (SMC) the right to license and regulate brothels.3 Similar laws, however, were lacking in the Chinese-controlled areas, where licensing was practised semi-officially. In 1928 Chiang Kai-shek banned all prostitution in the provinces of Anhui, Jiangsu and Zhejiang, increasing the number of prostitutes in Shanghai.
Although opposed to prostitution, the police, council and government did not stop licensing brothels since it implied that the majority of sex-workers remained off the streets. It also provided a source of revenue for the government.4 The Nanjing regime was considerably anti-prostitution in its attitude, but it lacked the will and the authority to do much about it, never affecting it in any considerable way.
An important theme emerges from the above discussion of Nationalist attempts to regulate Shanghai’s vice industries. One of the primary problems the Chinese PSB and municipal authorities faced was regulation and the control of crime across the boundaries of the foreign concessions.
These boundaries were effectively international borders. Therefore systematic regulatory objectives were impossible to fulfil considering that gambling operators could shift their operations over the boundaries.
Likewise, to a certain extent, brothel could do the same over a duration of months. Cooperation between the different police forces was greatly lacking, mostly non-existent. Often it came down to a particular officer dealing with a counterpart over the border, but wholesale collaboration never occurred, except for one occasion in 1932.
The arrival of the Japanese forces in Zhabei in January of that year caused widespread anger and hatred to the streets. On 18th September, 1932, one year after the Manchurian Incident, the Citywide police forces worked together for the first (and last) time to maintain order in the face of possible political and terrorist actions.5
But petty crime was not the
major issue facing the Nationalist government – large-scale, citywide
organised crime and the trade of narcotics proved to be the government’s
This relationship, often unstable and inconsistent, provided the opportunity for the GMD to strengthen its position while tolerating the gangster drug trade, and for the Green Gang to increase its business operations in return for help against the communists.
The Green Gang originated in the early 17th century in the Yangtze basin as a secret society, as the “Anqing Daoyou”. In the 1920s, two of the sect’s most important figures, Zhang Renkui and Gan Shikui, transferred their own sections to Shanghai.
The gang began making profits from salt-smuggling operations, which required the cooperation of corrupt officials, an experience that later provided the means for opium smuggling. The Green Gang was loosely controlled and organised but well structured. Competing for space between other gangs and triads as well as amongst itself, by 1926, the Green Gang based in the French Concession had emerged as the strongest and most powerful crime syndicate in Shanghai. Under the leadership of Huang Jinrong, Zhang Xiaolin and the fledgling Du Yuesheng, the FC Green Gang was a force to be reckoned with.6
Political relations between the Green Gang and the GMD had begun early. By 1927, Chiang Kai-Shek had already made contact with Du Yuesheng. The Green Gang had operations in labour groups and organisations, competing against, and working with, the communists prior to the April 1927 coup.7
Chiang, already leading the Northern Expedition, needed the financial support of the Shanghai business community but found that the heavy presence of communists and trade unionists challenged the ascendancy of the GMD. It took four months for the Guomindang to acquire the assistance and agreement of the Green Gang in its backlash against the communists.
In July 1926 Niu Yongjian, a GMD operative and Shanghai native, was sent by Chiang back to Shanghai to subvert warlord military units and the CCP, as well as form financial and political contacts with sympathisers. Meanwhile, a growing desire for Autonomy for Shanghai from the destructive civil war led to the formation of the Shanghai Citizens’ Federation, with members from both the GMD and the Green Gang.
With Niu’s assistance, this mutual contact brought about a meeting between Chiang and Huang Jinrong in Jiujang, during November 1926, where Chiang solicited the Green Gang’s support in return for an opium monopoly.8
On 11th April 1927, the GMD and Green Gang moved against the communists. Du was himself involved in the assassination of Wang Shouhua, a CCP leader and trade union organiser.
That night, and in the following days, GMD troops and gang members, totalling 15 000 men, led a campaign of terror and violence against the CCP and the trade unions. This concerted action resulted in over 5000 deaths, mostly executions.
The FC Green Gang was also able to use its wider network to remove all communist presence from Shanghai, much to the satisfaction of Chiang Kai-shek and the Guomindang.9
With the Guomindang in power in Nanjing, the Green Gang could pursue wider opportunities in the opium trade. However, periods of cooperation and acceptance on the Guomindang’s behalf alternated with periods of conflict and tension.
The GMD viewed opium as a prospect for much needed revenue raising through its regulation. Under the banner of suppression, the Nationalist government could control the narcotics trade. In 1927, following the coup, the National Opium Suppression Board (NOSB) was established under Song Ziwen’s Ministry of Finance, as a means for a monopoly.
The Xin Yuan Company ran this monopoly under NOSB direction. Initial support from the Green Gang bosses was later withdrawn as the Xin Yuan monopoly undermined their own “Three Prosperities” company.
The resulting retail price war between the two companies brought prices down and flooded the market with opium. The Nationalists lost this small battle against the experienced drug barons, and were forced to dissolve the NOSB and awarded the opium contract to the Three Prosperities Company.
In a last ditch effort to regain control of the opium trade the Nationalists in August 1928 established the National Opium Suppression Committee, which banned the use and trade of opium altogether – it lasted two weeks, and the Green Gang retained its monopoly, in different forms, until 1937.10
The role of opium and the events leading up to, during and following the April 1927 purge demonstrates the level of involvement the Green Gang had with the Guomindang party and state. I do not say in, for that comes later.
During this early period of Guomindang rule, when its authority was still weak, it turned to other sources of power. The GMD war-machine, with its intentions to govern all of China, was not strong enough to do so in its own right.
They needed the communists to generate support and when they had outstayed their welcome, they turned to criminals. The Green Gang, on the other hand, regarded the GMD as a useful ally that could increase its opium trafficking abilities.
Furthermore, the Guomindang
united with the Green Gang precisely because it considered it not a threat to
its political power. Thus the element
of mutual benefit, however unlikely the partnership, emerged as the major
factor in the GMD-Green Gang relationship prior to 1932.
In late January Japanese troops occupied Zhabei, causing widespread panic among the city’s citizens. The authorities under directions from Paris ejected the Green Gang, having gained much power in the French Concession, where it was based.
At the same time, the Guomindang underwent a leadership challenge, forcing Chiang to temporarily resign, and leading to an overhaul of the Guomindang structure and the introduction of the corporatist system. It was during these turbulent times that Du Yuesheng not only survived with his gang intact but also managed to consolidate his power and influence in his new base in the Chinese City.
His move, however, required the support of the Nanjing regime. Of course, it was negotiated in dollars. Du received official permission to sell opium in the Shanghai area but at the cost of Ch$3 million a month to MOF.11
Thus began the process of legitimisation for the Green Gang’s opium operations. While this amount was not unaffordable, it certainly affected Du’s profitability. He therefore had to find another means to regain his control – he found it in politics as part of the elite:
(Du Yuesheng’s) purpose was to become part of the (Nationalist government’s political) system. One of the most remarkable developments in the politics of Shanghai in this period was a relative rapidity with which Du’s network of personal power underwent a process of institutionalisation. By mid-1937 Du had become, in effect, an integral part of the GMD’s corporatist system in Shanghai.12
Following 1932, Du participated more widely in Shanghai’s Civic and administrative organisations and the GMD’s labour control policies. His tentacles of influence spread to almost all areas of Shanghai, in terms of both geography and demography, from the elite to the workers. He even formed the “Endurance Club” – an association for Shanghai’s Chinese elite, where they acknowledge Du as leader, very much like his gangs.
Du became influential without being a legitimate businessman or becoming a politician, financing the Nationalist government in so far as to retain his control over the opium trade. In this respect, he was no longer working closely with Zhang Xiaolin or his one-time benefactor, Huang Jinrong.
He was instrumental in the creation of a covert, semi-official opium monopoly that was subject to the occasional scandal. What might have been illegal for others was legal for Du Yuesheng – because he had influence over the laws.13
Du was also director of the Shanghai Opium Suppression Board: “Shanghai’s biggest narcotics dealer was at the same time the city’s major civilian drug enforcement agent… an act of stupendous government criminalization”.14
The regime was, from 1933, legally selling opium to ‘licensed’ addicts as a source of revenue, while other regional suppression boards sought to cut off illicit sources of narcotics. Chiang’s suppression boards even presented confiscated opium to Du Yuesheng to refine into Morphine and Heroin, as the Chinese council, under Wu Tiecheng, pretended nothing was happening.15
However, in 1934 a real attempt at reducing opium consumption was commenced by the government as part of the New Life Movement. The “Six Year Plan” involved the systematic reduction of opium addiction by 1940.
In the same year opium revenues had netted the government $100 million, so a real reduction would be detrimental to the government coffers. The plan was so evidently threatening to Du that he arranged to have the plan’s architect, the Minister of Finance, Song Ziwen, assassinated at the North Station.16
Song survived – but, feeling the heat, the plan was scrapped, demonstrating the immense power Du held with the threat of violence.
Thus crime came to be part of
the political process. As politics
became interwoven crime, and vice versa, Nationalist ruled Shanghai moved
further and further away from the law and order that was originally stated in
its policies. Before the Japanese
arrived in 1937, Shanghai was not far from (or maybe it was already) having
criminals as politicians and politicians as criminals.
The period demonstrates that crime is so perilous it can corrupt a government until it becomes an element in crime or crime becomes part of the government. This critical examination of this theme has considered the role of vices, such as gambling and prostitution, organised crime and the overwhelming importance of narcotics trafficking in the Guomindang political framework.
The active participation of the government in criminal affairs only spawned further and more deeply rooted problems. When politics functions and co-exists alongside crime, it is inevitable that it will eventually get into crime, and develop inside the criminal element.
A few in government benefit, as
do the criminal fraternity, but the social costs are huge. It took the communists many years to clean
up the mess that was Shanghai. Even
now in China crime, corruption and drugs have again started to rear its ugly
head – it is a problem that cannot be eradicated, only controlled.
Barbara Baker (ed), Shanghai: Electric and Lurid City, Oxford University Press, New York, 1998.
Nicholas R. Clifford, Spoilt Children of Empire: Westerners in Shanghai and the Chinese Revolution of the 1920s, University Press of New England, London, 1991.
Stella Dong, Shanghai: The Rise and Fall of a Decadent City, Perennial, New York, 2000.
Gail Hershatter, Dangerous Pleasures: Prostitution and Modernity in Twentieth-Century Shanghai, University of California Press, Berkeley, 1995.
Brian G. Martin, The Shanghai Green Gang: Politics and Organized Crime, 1919-1937, University of California Press, Berkeley, 1996.
Brian G. Martin, "The Pact with the Devil: The relationship between the Green Gang and the French Concession Authorities 1925-35”, Papers on Far Eastern History, No. 39, pp 93-125, March 1989.
Frederic Wakeman, Jr., Policing Shanghai 1927-1937, University of California Press, Berkeley, 1995.
Frederic Wakeman, Jr., “Licensing Leisure: The Chinese Nationalists' Attempt to Regulate Shanghai, 1927-49”, Journal of Asian Studies, Vol. 54, No.1, pp 19-42, February 1995.
Frederic Wakeman, Jr. and Richard Louis Edmonds (eds), Reappraising Republican China, Oxford University Press, New York, 2000.
Bernard Wasserstein, “Secrets of Old Shanghai”, The Times Literary Supplement, London, 1-7 April, 1988.
15. Iibid, p 264. See these pages for an amusing story on how Du Yuesheng, along with Wu Tiecheng, tried to swindle the Nationalists by processing higher quality heroin from elsewhere that he wasn’t required to pay costs on.