Incompetent Portland opium-smuggling gang had friends in high places

By Finn J.D. John

As the new day dawned on the first day of 1893, Customs Collector Jim Lotan would have told you, had you asked, that life was good.

The previous year had been good to him. After years of working his way up through the ranks in the Republican Party, he’d found himself its state party leader after Senator Joe Simon went to Washington, D.C., to join the Republican National Committee. He’d reached that position just in time to blackmail the City of Portland, which had come cap in hand asking the Legislature’s permission to borrow $200, 000 for the Bull Run water project. Lotan wasn’t a Legislator himself, but he was in a position to set party priorities, and he told the city he’d be glad to put their request on the priority list … if they’d agree to buy the ramshackle, dilapidated, obsolete Stark Street Ferry from him for $50, 000. It was probably worth about $1,500 at the time.

True, the city hadn’t leaped right on that generous offer, but Lotan knew it would eventually. It had no choice, unless it wanted to continue drinking from the increasingly nasty Willamette River.

The previous year had also been the year in which Lotan had landed, through his political maneuverings, a lucrative federal appointment. He’d been named customs collector for the City of Portland. That meant his office was in charge of inspecting incoming steamer traffic, making sure nobody was smuggling drugs or Chinese laborers into the city. Not only did the job pay a fine salary, but it had other benefits for the intrepid Mr. Lotan. It opened up, shall we say, certain extracurricular money-making opportunities. After all, who was better positioned to smuggle opium into the port, than the man whose job it was to prevent opium from being smuggled into port?

Yes, 1893 was shaping up to be an excellent year for Jim Lotan. One imagines him sitting back with a fat cigar by the fire at the exclusive plutocrats-only Arlington Club, of which he was a member, and relishing the prospect of the new year.

With friends like these …

It was not to be. The problem was, to really exploit the possibilities offered by his new position, he needed to find partners who were discreet, trustworthy and competent — partners who could keep their mouths shut. However, instead Lotan had ended up working with the Merchants’ Steamship Company, owned by disreputable local wholesale grocer Nat Blum.

As smugglers, Blum and his boys were stunningly in-competent. Many of their oper-ations were so bumbling and panicky that they would have made good comedy sketches. Almost as soon as they began their operations, the names of the MSC’s ships, the Wilmington and the Haytian Republic, started appearing regularly in the news columns of the Portland papers.

Early in the year, the Portland Evening Telegram revealed that Merchants’ Steamship had been transferring Chinese immi-grants at sea from one ship to another, a dangerous maneuver undertaken to avoid the expense of disinfecting the immigrants’ things on arrival — and, as it later turned out, to avoid also the customs inspection that would determine that the newcomers were illegal immigrants. Each man was paying the Blum gang $120 for this special service.

How not to smuggle dope

Word then started leaking out about the gang’s opium operations, something they undertook with a breathtaking level of ineptitude. Their scheme was this: The Wilmington or Haytian Republic would put into port in Portland. By now they were well known there, so they would be examined closely; Lotan might be a friend, but he could not be seen to be favoring people that everyone knew were smugglers. But that would be OK, because by the time they got inspected, the dope would be long gone: It would have been chucked it overboard in barrels a couple miles downriver, for other members of the gang to retrieve.

Now, this might sound like a fairly workable plan. But here’s the catch. Apparently Blum didn’t think it important to have a smuggler stationed in the river to receive the “freight.” The same guy would load half a ton of opium in three or four hogshead barrels aboard the Haytian Republic in Victoria or Vancouver, then take the train to Portland, hoping to get there in time to retrieve the things from the drink. On several occasions this did not work out, and Blum’s runner had to bribe suspicious farmers and curious riverboat pilots to retrieve it.

That summer, Blum tried to smuggle some dope into San Francisco in two big steamer trunks, but lost the claim check to one of the trunks. He was followed by two accomplices, one of whom got busted with a full 250 pounds. By the time the thumbfingered drug-runners finally straggled back home to Portland, they discovered someone had stolen 800 more pounds of opium from a gang member’s house. Apparently the word was out on the street.

A little later, 1400 pounds of dope were chucked off the Wilmington and successfully retrieved and hauled to a gang member’s house, as they often did, in the middle of the night. This evening was special, though, because the gang member’s wife had gotten into a feud with one of the neighbors, who had been just waiting for them to bring in another big load so she could call the cops on them.

Luckily, when she did, she got hold of a friend of Blum’s at the police station. So Blum ran down and introduced himself as a detective, took her information, thanked her and told her authorities were on the job. While he kept her busy telling him all about what his gang members had been up to, the gang members themselves were busy loading up a ton and a half of dope and hauling it off to someone else’s house.

Busted

This sort of thing, of course, couldn’t go on forever. In December 1893, a grand jury handed down indictments again-st everyone … including Jim Lotan. The charges involved smuggling more than two tons of opium, and running a human-trafficking operation smuggling undocumented Chinese laborers into Portland. Also indicted was Seid Back, the most prominent and successful Chinese merchant in the Northwest. Hoping to catch a break, Blum turned state’s evidence, was placed on the stand, and started singing.

The trial held the city spellbound. But Lotan and Back hadn’t much need to worry. The roster of court officers at this trial reads like an excerpt from the Arlington Club directory. Lotan was represented by future Senator Charles W. Fulton. Former and future state Senate President Joseph Simon represented another defendant. Perhaps most outrageously, federal prosecutor John Gearin — who had just been appointed by President Grover Cleveland as special prosecutor for opium frauds — was, in the case of this particular opium fraud, on the side of the defense. The judge was one of Simon’s  former law partners, and the jury foreman was fellow Arlington Club member Charles Ladd.

The smugglers go free

So the trial ended with a hung jury. The word on the street was that the vote was 11 to 1; jury foreman Ladd had refused to vote to convict his friend. A new trial would have to be scheduled.

But one never was. Before a new trial could be scheduled, Mr. Blum … disappeared. Odd coincidence, yes?

As for Lotan, the resulting bad publicity does seem to have hurt him … but not much. The following year, the city relented and bought the aging, decrepit, increasingly unseaworthy Stark Street Ferry from him for $40,000 — which was still an overpayment on the order of 2,000 percent.

(Sources: MacColl, E. Kimbark. Merchants, Money and Power: The Portland Establishment 1843-1913. Portland: Georgian Press, 1988; Portland Daily Telegraph, 11/27-12/24/1893; Portland Oregonian, 11/29/1893)

Finn J.D. John, an instructor at Oregon State University, writes about unusual and little-known aspects of Oregon history. His book, “Wicked Portland: The Wild and Lusty Underworld of a Frontier Seaport Town,” is scheduled for release this summer from The History Press. To contact him or suggest a topic: [email protected], @OffbeatOregon (on Twitter), or 541-357-2222.

Image: Oregon Historical Society

The Stark Street Ferry in roughly 1889. With the opening of the first Morrison Street Bridge a few years before, the writing was on the wall for the ferry at this time, but it was still a busy operation. By 1894 when the city finally agreed to buy it, though, the right-of-way had become worthless and the equipment had deteriorated nearly to scrap value.