We Sell Drugs: The Alchemy of US Empire Read online

  Examining the impact the war had on the circulation of one particular set of drug commodities—coca leaves and the various manufactured goods derived from them—offers a revealing account of the intersection of war, drugs, and US power. The war facilitated the consolidation of US control over all coca-derived commodities circulating on the international market, engulfing in particular German and Japanese competition. As one of two categories of narcotic drug targeted for international controls before the war, there is uniquely rich historical documentation recounting the international flow of coca commodities before, during, and after the war that provide insights into war-wrought change. Moreover, as one of two categories of narcotics located firmly in the Western Hemisphere, and with Latin American resources being newly valued as critical to US war mobilization, examining shifts in the coca market also provides perspective on the nature of US economic and political expansion at mid-century. Finally, while this account traces the circulation of coca commodities from the cultivation of coca plants through to the distribution and consumption of goods derived from them, it also offers insight into how any particular drug’s value was embedded in broader social, political, and economic visions that increasingly relied on laboratory-manufactured drugs to advance economic development and national power.

  In the 1930s coca leaves had been circulating on the international market for more than half a century and constituted the basic raw material for the manufacturing of three other commodities: crude cocaine, cocaine hydrochloride, and a soft drink flavoring extract manufactured for the Coca-Cola Company.26 Despite competition from Japanese and Dutch farming on colonial plantations in the Pacific, the largest national cultivators of the coca leaf remained within the geography of coca’s origins, in the semitropical slopes of the Andes Mountains of Peru and Bolivia. When the war began, the Netherlands East Indies, Bolivia, and Peru produced an estimated four-fifths of the total world trade in coca leaves.27 Bolivia cultivated coca leaves primarily destined for a regional market sustained by indigenous peasant communities and mine workers. Peru also supplied the Andean market with coca leaves. The circulation of coca leaves in the Andes reflected patterns of traditional use and consumption, interwoven with the impact of the market value of the leaves internationally. In the Andes, coca was typically consumed in its natural leaf state. Coca leaves were chewed, steeped as maté infusions, constituted components of ritual practice, and circulated at times as currency, both in the form of wages or as payment in exchange for goods. The vast majority of coca leaves being cultivated were consumed in this market.28 Unlike in Bolivia, however, substantial quantities of Peru’s coca leaves were cultivated for export. Peru was the largest exporter of coca leaves on the world market and those leaves were exported primarily to manufacturers in the United States.29

  Although most Peruvian coca leaf exports went to the United States, Peru was unable to export any crude or refined cocaine to the US market. US narcotics law, since the passage of the 1914 Harrison Narcotics Act, limited national imports to raw materials (coca leaves) and excluded refined drugs (cocaine hydrochloride) and semirefined drugs (crude cocaine)—the manufacture of any narcotic drug for the US market had to be done in the United States by registered importers and manufacturers monitored by the US government. Peruvians did have some limited participation in the manufacturing and export of crude cocaine to Europe, where pharmaceutical companies refined it. Thus, when the war began, the Andean coca leaf market was characterized by the production of raw materials for regional consumption, as in Bolivia, or, in Peru’s case, as also a primary supplier of raw material exports (coca leaves and crude cocaine) to US and European drug manufacturers.

  Outside the Andes, coca leaves grown on colonial plantations in the Pacific were the primary source of supply for all major drug manufacturing countries except the United States, namely Germany, Japan, France, and the United Kingdom. Japanese cultivation of coca leaves on colonial plantations in Formosa (Taiwan), Okinawa, and Iwo Jima supplied that nation’s pharmaceutical industry. Dutch-controlled Java, Borneo, and Sumatra furnished the bulk of coca leaves imported by European manufacturers (along with limited quantities to the United States). While the Andes was the ecological home of coca leaves, nineteenth-century Dutch colonists experimented with transplanting coca seedlings to the fertile soils of the East Indies (now Indonesia) and stumbled across a strain of particularly high-alkaloid-content coca leaf that they cultivated for export. These leaves were uniquely suited to manufacturing cocaine hydrochloride and rapidly came to dominate the international trade geared toward the manufacture of medicinal cocaine.30

  Nevertheless, in the 1930s the United States remained the largest manufacturing global importer of coca leaves, and these came primarily from Peru. In terms of the North–South distribution of economic power, Europeans and North Americans controlled the manufacturing and international distribution of products derived from coca leaves grown in South America and Southeast Asia. But Americans could claim the most robust market for coca leaves since imports were destined not only for the manufacturing of pharmaceuticals, but also for the large-scale production of a flavoring extract for the Coca-Cola Company. In the United States, only two pharmaceutical companies were legally authorized to import coca leaves: Merck & Co., Inc. and Maywood Chemical Works. Merck imported coca leaves from both Peru and Java, which the company’s chemists used to manufacture pharmaceutical-grade cocaine. Maywood imported coca leaves exclusively from Peru, and after extracting and destroying the cocaine alkaloid (to comply with federal narcotics law), the pharmaceutical company transmuted the remainder into a “nonnarcotic” flavoring extract for Coca-Cola. A combined effort by lawyers for the pharmaceutical industry, the Coca-Cola Company, and Commissioner Anslinger of the Federal Bureau of Narcotics secured this concession for “special leaves” in the 1931 Geneva Convention, an exceptional regulatory moment when the legal uses of coca in the drug trade were defined internationally as encompassing both medical and scientific needs, as well as production of a coca-based flavoring extract for the iconic soft drink.31 By WWII, coca leaves imported into the United States for this purpose consisted of almost twice the volume of leaves imported for medical or scientific use. In both the United States and Europe coca-derived commodities were manufactured for domestic consumption and for reexport. And only at this last stage of the coca commodity circuit did Andean countries reenter as consumer markets for these finished goods, whether as medicinal cocaine, or in bottles of Coca-Cola.32

  World War II disrupted and transformed the trade circuits through which coca leaves, crude cocaine, pharmaceutical-grade cocaine, and Coca-Cola all flowed. The Japanese occupation of Java, combined with British and American naval blockades of the Atlantic, cut off the European market from supplies of coca leaves and crude cocaine. Germany, the largest European manufacturer and wartime target of naval blockades, was hit hardest. Allied intelligence reports speculated that even reserve stocks inside Germany were being depleted: “Since 1941, Germany has certainly not been in a position to procure coca leaves . . . stocks must have been drawn upon in order to meet requirements in the years 1941 and 1942.”33 From 1936 to 1939, the European continental countries imported an average of 71 tons of coca leaves each year from South America and Asia; however, by 1941 the only trade consisted of a scant few kilograms reexported from one European country to another. By 1943, the League of Nations reported “the countries of the continental group” were unable to procure coca leaves.34 Europe’s access to crude cocaine was similarly disrupted. Before 1939, Europeans were importing from Peru an average of 1168 kg of crude cocaine annually, and German manufacturers constituted the largest market. By 1942 only Spain was reporting any imports, a relatively small 136 kg per year, and by the end of the war, the US commercial attaché in Peru reported that the “great bulk of the exports” were going to Allied countries, primarily England, “with Spain in second place.”35

  With the Dutch East Indies under Japanese occupation, Peru remained the
only producer of coca leaves for the world market, and cut off from Europe, the state found itself increasingly dependent on US purchases and subject to the US legal proscription against importing manufactured narcotics. In turn, the United States emerged from the war as the world’s largest importer of coca leaves and the largest producer and distributor of cocaine. The United States used this new leverage to dictate the scale and scope of the trade and to exert political influence. In doing so, the United States implemented the structures of its vision for drug control as a constituent element of its wartime policy, and guaranteed its dominant position in the international drug trade in the war’s aftermath. Two central animating principles seem to dictate US wartime policy toward the Peruvian coca trade. First, the United States insisted on retaining its manufacturing monopoly and refused to import anything other than coca leaves from the Andes. Second, in the broader effort to undermine Axis economic power and capacity to wage war, the United States interpreted any signs of ongoing Axis trade with South America as evidence of criminal conspiracy and threatened coercive measures to punish those responsible.

  Despite mounting stocks of both coca leaves and crude cocaine in Peru, the United States denied repeated requests from Peruvian exporters to sell leaves that had already been converted into cocaine. The war placed the United States in a powerful position to hold onto its drug manufacturing monopoly and further entrench a relationship whereby Andean raw materials remained the region’s primary export. The US drug industry depended on an array of Latin American basic supplies: “Important items from Latin America include cinchona bark for quinine; ipecac, valuable for its alkaloid emetine; stramonium, an important substitute for belladonna and also a valuable source of scopolamine; coca leaves for cocaine; fish livers for vitamins, glandulars (thyroid, pancreas, and so on); and cocoa beans, of which the shells and residue are important for the production of caffeine.”36 This was a phenomena exacerbated by the war, but had historical roots in the impact of the 1931 Geneva Convention, which the Peruvian minister of finance and commerce complained had cut Peru’s share of the international cocaine market from 40–50 percent to as low as 3–4 percent.37 In 1940 the Peruvian commercial attaché appealed to the Federal Bureau of Narcotics, which had “the power to determine from which states US firms could buy raw material and to which countries American manufacturers could export,” to authorize more US companies to import Peruvian coca leaves.38 The FBN rejected the request and refused to grant any new import licenses on the grounds that it would make drug control more difficult, in effect a justification for maintaining a US manufacturing monopoly. It also dangled a thinly veiled threat by suggesting the United States had already done Peru a favor by ending a Department of Agriculture project to grow coca in Puerto Rico so as to “prevent upsetting the economic status between the United States and Peru.” This project, the FBN official noted, could be easily resumed.39

  MAP 1. Coca leaf cultivation and derivative manufacturing, 1946.

  The war only strengthened the international drug manufacturing hierarchy the United States sought to entrench. Thus, when Peruvian Minister of Finance David Dasso argued in 1942 that Peru should manufacture its own cocaine for the US market and proposed that the United States “should buy cocaine instead of the cocoa [sic] leaf from Peru since processing the leaf for cocaine was a relatively simple matter,” he was resoundingly rejected.40 In response to Peruvian efforts to expand access to the US market, the State Department declared, “It would seem the answer to Mr. Dasso should be that it is up to Peru to make the concessions, not the United States.” This claim was backed by the US accusation that any increase in Peruvian drug manufacturing “would merely go into the illegal trade,” which at the time was defined as a willingness to “sell illegally to Germany and Italy, which are in desperate need of cocaine.” Characterizing Peruvian export practice—meeting an acknowledged medical need (and hence Axis country strategic import)—as “illegal,” the State Department reframed an economic and political struggle into a language and practice of delineating (and ultimately prosecuting) criminality. The United States even threatened to cut “Peru off from all sources of narcotic drugs” and “stop its purchases of coca leaves” to force Peruvian compliance.41 Thus the United States was able to use its economic and political leverage to entrench a particular economic order that incorporated a definition of criminality premised on political loyalties.

  But the US government also made some concessions. The US-Peru Trade Agreement, signed in May 7, 1942, lowered the import duty on coca, increasing profits for Peruvian exporters. When the FBN complained about this loss of tax revenue (a key component of its budget), the Treasury Department explained, “there were overpowering considerations from the point of view of policy which guided the Committee in approving the concession.”42 As this episode shows, profit was not measured exclusively in economic terms; the United States also sought to maintain control over the drug trade to secure the political stability of its trading partners and establish the long-term alignment of Latin American countries like Peru with the United States.

  Drug control then had multifaceted value: at once economic, medical, and diplomatic. At the most basic level it promised to supply or obstruct the flow of medicinally valuable pharmaceuticals in the context of a widespread spike in demand generated by war. Cocaine, for example, was valued in part as an unparalleled local anesthetic. When Peruvian exporter Andrés Soberón’s crude cocaine stocks began to accumulate with the loss of access to the Italian and German markets, he invoked the drug’s wartime medical value in his failed bid to the US State Department and the FBN to sell his semirefined drug to the United States for further refining: “Cocaine is indispensable for attending to those injured in the War and we are sure, based on letters we’ve received from Europe, that in Russia and all European countries there is a great demand for this product.”

  Soberón appealed on behalf of the war-injured, even while making an economic entreaty by suggesting this Peruvian-US trade would enhance the capacity of the United States to meet European and Russian “demand.” The United States was adamant in its refusal to import Peruvian crude cocaine, although it did flex its diplomatic muscle and offer to put Soberón in touch with interested buyers in the “Government of the Soviet Socialist republics.”43 A year later, Soberón expanded his appeal through an invocation of the trade’s importance for maintaining hemispheric solidarity: “[W]ishing to contribute to the defense of America, I offer 600 kilos of crude cocaine.” Again his request was rejected.44

  The war augmented US power in the international drug trade, and officials did not need to circumvent or renegotiate the national drug regulatory framework’s long-term orientation toward protecting the interests of US manufacturers. This was especially true in relation to the coca leaf and cocaine market. The United States continued to import coca leaves from Peru, despite shunning Peruvian crude cocaine. Peru remained the “principal source” of US imports of coca leaves and the war boosted the volume of this trade.45 In March 1942, one week after the Japanese conquest of Java, the commissioner of the FBN gave an update on the state of the coca market: “As you know, coca leaves, an important defense material, are used in the production of cocaine, a narcotic drug which is indispensable in the treatment of diseases and injuries to the eyes. No substitute for cocaine has yet been discovered.”

  Anslinger wrote that despite the war-caused disruptions to Merck’s supply of coca leaves, “We now obtain from Peru a quantity of coca leaves sufficient to replace the amount formerly imported from Java.” As with the government-directed accumulation of other raw materials deemed valuable to war mobilization, and even though it anticipated “no shortage for the duration of the war,” the FBN authorized the expansion of coca leaf stockpiling. Anslinger reported, “The Bureau of Narcotics has instructed Maywood Chemical Works to recover all of the raw cocaine obtained from coca leaves.” In other words, even though existing stocks of raw materials could easily meet normal annual demand f
or medicinal cocaine, the FBN authorized Maywood to stop destroying cocaine alkaloid extracted in the process of making a flavoring extract for Coca-Cola. In this striking move, the United States invoked wartime necessity to stockpile quantities that exceeded the annual quotas it was entitled to hold under the 1931 Geneva Convention, and tapped large supplies of coca leaves that were easily accessible because of the “special” status Maywood’s leaves had been granted under the international treaty. The raw cocaine that could be obtained from these leaves imported for the express purpose of manufacturing a soft-drink flavoring extract, Anslinger reported, amounted to “approximately four times the normal medical needs of the country.”46

  TABLE 1 US COCA LEAF IMPORTS AND USES, 1936–1943 (in kilograms)

  As raw material stockpiles began to accumulate, this reserve supply of drugs put the United States in a powerful economic and political position as the major world-supplier of cocaine. US manufacturers replaced European producers in the world market, and US cocaine exports increased dramatically. By 1941 US exports had increased by more than 600 percent over quantities exported just five years earlier. Before officially declaring war, the United States had been “manufacturing a large quantity of cocaine for Russia on the Lend-Lease program.”47 By 1944, as Anslinger testified before Congress, the United States was supplying “Russia with all her cocaine needs, both for military and civilian use, because Russia has been separated from her market. We have supplied Russia and India and a number of parts of the British Empire, and in the case of India, we have received in turn an equivalent amount of opium. We insisted upon that to keep from dipping into our reserves too deeply. We have been able to give this help. Now we are confronted with supplying some of the liberated territories.”48