When the British began to trade with China, they found that the Chinese had little desire for British products. So Queen Victoria's Britain began to import opium into China. When the Chinese Emperor tried to stop the drug trade, the British declared war and ended up not only imposing the sale of opium on the Chinese but took Hong Kong as "compensation" for the war itself.
When Chinese migration began to come in massive numbers to Hawai'i beginning in the 1850s, British and American merchants began to sale opium. Those selling opium included members of missionary families and many of the members of the "Honolulu Rifles" who in 1887 would impose the Bayonet Constitution. In the Queen's autobiography, Hawai'i's Story by Hawai'i's Queen, she names three prominent opium dealers: William Fessenden Allen (cousin of Charles Reed Bishop), Henry Waterhouse, and George Parks (p241). In fact, some of the "Big Five" may have used opium money to start their businesses. Charles Reed Bishop through his partnership with William Aldrich, a known opium and "assorted dry goods" merchant, engaged in opium trade as well. However, by the 1860s, it was not merely Chinese who were buying opium, but it was also Native Hawaiians including some prominent ali'i.
The National Legislature of 1873 (which has the distinction of being a legislature that was opened by one king--King Lunalilo--and prorogued by another--King Kalākaua) made the sale of opium illegal except for medicinal purposes (Kuykendall, the Hawaiian Kingdom, Vol.3 p192). The reason for the latter exception on opium for medicinal purposes was that opium, specifically opium mixed with citrus in a pill form, was commonly used for the treatment of insomnia, sexual problems, and for relieving pain during and after surgery. However, it was highly addicting and despite the ban, opium was still sold in pharmacies and smuggled in. Kaho'olawe was a notorious opium smuggling hub for opium and alcohol in the 19th century and certain Christian missions (particularly on the islands of Hawai'i and Maui) accepted donations from known opium smugglers and dealers.
During the short ministry of Cesar Moreno, the opium issue was resurrected. According to Kuykendall's Hawaiian Kingdom Volume 3:
Another subject in which Moreno was much interested, because of his Chinese connections, wasopium, the liberalization of Hawaii's strict laws on that subject, and a plan to make Honolulu the opium processing and distribution center for the whole Pacific area. Early in the session a bill was introduced to authorize the importation and sale of opium to Chinese only; two licenses were to be sold at an upset price of $60,000 each. On July 9 this bill was passed on its third reading. In the last week of July, Moreno's lobbying activities came to a climax. On the twenty-fourth, a bill was introduced to authorize the importation, manufacture, exportation, and sale of opium; there was to be one license, for two years, to Chinese only, at an upset price of $120,000. On the twenty-seventh, a motion was made to insert in the appropriation bill an item of $24,000 for a subsidy to the Chinese steamship company; it was defeated by a vote of 18 to 17. The next day a motion for reconsideration was adopted, and after a brief debate, the subsidy item was approved by a vote of 25 to 14.25 On this item, Minister of Finance Kaai deserted his ministerial colleagues. He had agreed to vote against it, but instead not only voted but spoke for the subsidy. Asked for an explanation, Kaai said he voted as he did at the direct command of the king, and he showed a letter from the king to justify his statement.26 Commenting on the legislature's reversal of its earlier decision, the Pacific Commercial Advertiser charged that the result was procured "by open and wholesale bribery," and said, "The indignation of the public at the part played by a certain impecunious adventurer in the case is great. . . . His boasted power to oust the Ministry, and his assumption of prescience in regard to Regal acts may satisfy his egotism, but will never enhance the brilliance of his fame, or add one tittle to his influence. He has been measured by a discriminating community, and their estimate of him is small . . . the public will be heartily glad at the opportunity to bid him an everlasting farewell."27 On July 30 the opium bill, which had been introduced six days before, came up for third reading and was passed.28 In regard to this action and the passage of the subsidy for the Chinese steamship company, the American minister wrote, "It was at once charged and not disputed that Mr. Moreno had secured these results by the use of money in the lobby," the money having been provided by certain Chinese merchants of Honolulu.29 To the credit of the king, he vetoed both of the opium bills here mentioned; but he signed a third bill which amended the existing law restricting the importation and sale of opium.30 (p210-211)What Kuykendall does not discuss is that one of the major reasons why some had actually voted for the opium bill was because by legalizing the trade, it would take away income from certain prominent American and British businessmen similar to how Prohibition in the US made alcohol distributors ("bootleggers") quite wealthy.
In 1886, the National Legislature passed the "Opium Act of 1886" to legalize the sale, importation, and production of opium providing that it were to be licensed (therefore taxed) and Native Hawaiians and Japanese were forbidden from buying any of it. The King and the Cabinet would be responsible for the public auctioning of two licenses per year starting at a minimal bid of $40,000. A Chinese sugar planter and merchant, T. Aki, offered a "gift" of $75,000 to King Kalākaua in exchange for a successful bidding on one of the licenses. Kalākaua accepted $71,000 with the additional $4,000 to be paid after the license was given. When Kalākaua awarded the bid to someone else, Aki sued Kalākaua and won. When the public found out about this scandal, there was a huge uproar. Even the heir-apparent, Princess Lili'uokalani was shocked with her brother. The bribery case of Kalākaua along with the missteps in Samoa and the other spending projects of the King were the basic excuses that the "Hawaiian League" (which had no Native Hawaiians in it) would use in forming the "Honolulu Rifles" to impose the Bayonet Constitution. In the aftermath, a new "reform" Legislature was elected and the Opium Act of 1886 was scrapped.
However, the topic of opium did not die there. In 1892, Opposition Representatives Kaunamano, Ashford, and White all submitted bills to legalize opium and during the Committee hearings, it came out that members of the police, the Hawaiian League, and others were secretly involved in and profiting from the opium trade (Kuykendall, Volume 3, p545-546). With that revelation, a consolidated opium bill was passed before the closing of the Legislature of 1892 (which ended in 1893). American and British businessmen would accuse the Queen of having lax morals and the passage of the new Opium Act of 1892 would be one of the excuses the Committee of 13 (formerly the Hawaiian League) would use to depose her.
According to the Queen, however, whatever her personal feelings were towards opium, she had no choice in signing the law because she no longer had the veto power due to the Bayonet Constitution. In Hawai'i's Story by Hawai'i's Queen, she explains:
I proposed to issue licenses for the importation and sale of opium. I did think it would be wise to adopt measures for restricting and controlling a trade which it is impossible to suppress. With a Chinese population of over twenty thousand persons, it is absolutely impossible to prevent smuggling, unlawful trade, bribery, corruption, and every abuse. There were more scandals connected with the opium traffic than I have the time to notice here. Some of the most prominent citizens have been connected with these affairs, and frauds have been unearthed even in the custom-house itself. The names of Mr. Parks, of Mr. W. F. Allen, and more recently of Mr. Henry Waterhouse, have been associated with some very questionable dealings in this drug; and it may be doubted whether the practice of hushing up such matters is favorable to good morals in any community. The Provisional Government seems to have had no scruples in the matter; for the sons of the missionaries exported a large quantity of confiscated opium, and sold it for fifty thousand dollars in British Columbia.The Queen also forgot to mention that her brother-in-law, Archibald Cleghorn, the custom house chief and governor of O'ahu was also implicated in the opium trade but that is another story.
The British government has long since adopted license instead of prohibition, and the statute proposed among the final acts of my government was drawn from one in use in the British colonies; yet I have still to learn that there has been any proposition on the part of the pious people of London to dethrone Her Majesty Queen Victoria for issuing such licenses.(241)