A12 REDMOND SPOKESMAN • TuESDAy, DEcEMbER 13, 2022
OFFBEAT OREGON
Clumsiest drug smugglers were the most audacious
E
ditor’s note: In the last
Offbeat Oregon column,
we explored the unlikely
origins and career of Yosuke
Matsuoka, the foreign minis-
ter of Imperial Japan who was
responsible for Japan’s military
alliance with Nazi Germany.
Matsuoka spent most of his
teenage years in Portland as a
sort of adopted son of a prom-
inent merchant and smuggler
named William Dunbar. In this
series, we go into detail on the
story of the smuggling ring that
William Dunbar operated with
his friend and business partner
Nat Blum.
Image: Filson Outerwear
The S.S. Portland in service in the Inside Passage, ferrying prospectors
back and forth to the Klondike a few years after 1900.
Sources
BY FINN J.D. JOHN
N
early 50 years ago the
Good Friday Earth-
quake changed Alaska
forever. It killed nine people
and slammed the West Coast
with tsunamis that killed 122
more, including four in Or-
egon.
It did something else, too,
though. It heaved up the sea-
floor of the Inside Passage near
the ghost town of Katalia by a
good 12 feet. In the process, it
brought something up to the
surface that was a very im-
portant piece of the history of
Alaska and, earlier, Oregon.
It was a small wooden-hulled
steamship with a screw propel-
ler. Most of the wood had been
eaten away by time and wildlife,
but the steam engine and other
hard parts were still there and
visible.
This wrecked ship turned
out to be the remains of the
S.S. Portland, the most famous
steamer in Alaska’s history, the
one that kicked off the Klondike
Gold Rush when it arrived in
Seattle in 1897 with the famous
“ton of gold” on board.
The Portland was almost
like the mascot of the Klondike
Gold Rush, so Alaskan history
buffs were excited about the
find. But Alaska wasn’t the only
state with cause for celebration.
The Portland had a prominent
role in Oregon’s history, too. It
had been as notorious in ear-
ly-1890s Portland as it became
famous in late-1890s Alaska.
Before the ship was bought
by a Seattle shipping company
and renamed the S.S. Portland,
its name was the S.S. Haytian
Republic. It was based out of
Portland, and it was probably
the most notorious smuggling
ship on the West Coast. It was
operated by a group of smug-
glers whose clumsiness and in-
eptitude was like something out
of a Keystone Cops comedy, so
its name was in the newspapers
a lot. Every reader in Portland
knew that ship, and knew the
names of its owners: Nat Blum
and William Dunbar of the
Merchants Steamship Company.
WILLIAM DUNBAR
William Dunbar was the se-
nior partner in the operation.
Dunbar, a native of Scotland,
had come to Oregon in the
1870s or 1880s and established
Turner Flouring Mills.
Looking for a market for his
flour and the wheat he had con-
tracts for, Dunbar discovered
that buyers in China really liked
the quality of his Oregon-grown
wheat and flour, with which
they’d make cakes and noodles
of various types. So he started
shipping his products to China.
Image: Alaska State Libraries
Passengers being rescued from the sinking S.S. Portland after it struck a hidden rock near the town of Kata-
lia on Nov. 12, 1910.
China today is a major buyer of
Oregon’s soft white wheat and
Dunbar was the merchant who
first opened that door.
It made him very wealthy.
Dunbar was soon making
enough money to purchase his
own steamship, and then an-
other. He used the two steam-
ers — the Haytian Republic and
the Wilmington — to expand
beyond the grain freight busi-
ness into the wholesale grocery
business. The steamships ran
out of the Dunbar Produce and
Grocery wharf, near the site of
the Burnside Bridge on the west
side of the river.
By the end of the 1800s,
Dunbar was one of the most
respected and influential mem-
bers of Portland’s business com-
munity and a member of the
Arlington Club.
But all was not well with him.
It’s not clear what happened
to push Dunbar over the edge
into industrial-scale criminal
enterprise. It may have been the
death of his wife. It may also
have been the influence of Nat
Blum, a flamboyant cigar-store
owner who was a junior part-
ner in Merchants Steamship Co.
Or maybe he was criminally in-
clined all along, believing on a
philosophical level that the U.S.
government had no right to tell
him what he could and could
not do with his steamships.
Or, maybe he just hated
waste. After all, nobody in Port-
land was buying shiploads of
Chinese goods; each time one
of his steamships left Portland,
loaded with grain bound for
buyers in China, it had to sail
back home in ballast. Not only
was the return trip wasted, but
Dunbar had to pay draymen
to load and unload the ballast
rocks that would keep the ship
stable and safe.
We can imagine him thinking
about this: What cargo could I
bring from China to Portland,
on the return voyages, after
bringing wheat from Portland
to China?
And we can imagine him re-
alizing that there were two car-
goes that would be extremely
lucrative for him: People and
opium.
Although both were equally
illegal, people would be the safer
of the two cargoes. The Chinese
Exclusion Act had been passed
in 1882, slamming the door on
Chinese laborers who wanted
to come to America to work.
But plenty of Chinese people
Image: Portland Evening Telegram)
Blum-Dunbar gang member Joseph “Bunco” Kelly, as drawn by the
Portland Evening Telegram’s staff artist during his trial on a murder
charge in 1894.
still wanted to come to America.
And in those years before driver
licenses, once they arrived no
one would be able to tell they
were in the country illegally. All
they needed was a well-con-
nected, sympathetic smuggler
to bring them across the sea
and either provide forged entry
papers or sneak them ashore in
the middle of the night. Some-
one like William Dunbar.
As for the opium, in the
1890s that was still perfectly le-
gal. But it was subject to a very
heavy tax of $12 per pound —
about $375 in modern money.
That, on a product that today
sells on the international market
for less than $50 a pound.
But there was a reason for
that high tax. The vast majority
of Americans viewed smoking
opium as the ne plus ultra of de-
bauchery and dissipation. Much
of the population wouldn’t care
about smuggling Chinese work-
ers into the country, but most
Americans would — if they
learned you were smuggling in
opium — rat you out to the po-
lice in a heartbeat. The risks, in
opium smuggling, were much
higher.
But Dunbar and Blum appar-
ently were willing to take those
risks, because obviously if you
were buying a product for $50
a pound that was selling on the
street for 10 times that, well, you
could make some pretty good
money. Until, of course, you got
caught.
And yes, Blum and Dun-
bar were definitely going to get
caught, sooner or not much
later. One of the more striking
aspects of their story is the con-
trast between the size and scale
of their organization’s capital in-
vestments and the clumsiness of
their operations. Usually, smug-
glers this dumb don’t grow this
big. But, of course, usually suc-
cessful businessmen don’t jeop-
ardize their success by taking up
high-risk criminal enterprises as
a side hustle either.
THE JIG IS UP
According to Blum’s later tes-
timony in court, the criminal
enterprise got started circa 1890
after one of Dunbar’s friends
and fellow members of the Port-
land business elite, James Lotan,
was given a cushy, sinecure job
as chief customs collector for
the Port of Portland. Lotan,
owner of the Stark Street Ferry,
was also the head of the Oregon
Republican Party.
This easy, lucrative federal job
was basically a political patron-
age plum. The chief customs
collector, of course, was the top
federal official in charge of mak-
ing sure no one was smuggling
anything into the port.
As would quickly become ob-
vious, this was like putting a fox
in charge of the chicken house.
Dunbar and Blum were
probably already doing some
low-key smuggling before this,
because immediately upon re-
ceiving his new appointment,
Lotan (again, according to
Blum) approached Blum to see
about putting his newfound au-
thority to use.
The scheme they came up
with was pretty slick. Lotan
was to generate official paper-
work for each Chinese passen-
ger. Each passenger would pay
$120 (about $3,750 in modern
money) to be smuggled into
the country. ($50 of that went
straight to Lotan, for his help
in the process.) The paperwork
would identify the Chinese men
as employees of U.S. companies,
already legal residents, who had
been sent to Canada on busi-
ness and now simply needed
to get back home to the United
States.
The passengers would board
the Haytian Republic or the
Wilmington in China, after all
the wheat had been offloaded,
and the ship would carry them
to Canada, landing in Victo-
ria or Vancouver. There they
would finalize the papers with
photographs and anything else
needed, before getting back on
“Agony of choice: Matsuoka
yosuke and the Rise and
Fall of the Japanese Empire,”
1880-1946, a book by David
J. Lu published in 2002 by
Lexington books; “yosuke
Matsuoka: The Far-Western
Roots of a World-Political Vi-
sion,” an article by Masaharu
Ano published in the Sum-
mer 1997 issue of Oregon
Historical Quarterly; “Wicked
Portland,” a book by Finn J.D.
John published in 2012 by
The History Press.
the ship and heading south to
Portland. Upon arriving, they
would be ushered in to see
Lotan, who would ask them
a series of questions designed
to appear to confirm that the
workers were entitled to “re-
turn” to America.
These interview questions
were carefully scripted, and on
the way down Chinese-speak-
ing associates of Blum and
Dunbar would instruct each
worker carefully on how to an-
swer them.
“They were told of the wit-
nesses to their identity, what firm
they belonged to, the amount of
money they had as a share, where
they did business, how long they
had been away from the United
States, which direction the streets
run, and everything they would
be asked upon their arrival here,”
Blum said.
So this was how they had
started out operations. It was a
slick system. Ff they’d stuck to
it, rather than diversifying into
drug smuggling, they probably
would have been able to keep it
up for a good long time.
But, of course, they did not.
We’ll talk about how things
went for the gang after they di-
versified into opium smuggling
in the next edition.
█
Finn J.D. John teaches at Oregon
State University and writes about odd
tidbits of Oregon history. His book,
Heroes and Rascals of Old Oregon, was
recently published by Ouragan House
Publishers. To contact him or suggest a
topic: finn@offbeatoregon.com or 541-
357-2222.
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